The Ramsey Show - App - Did I Mess Up? (Hour 2)

Episode Date: July 30, 2024

Live from the headquarters of Ramsey Solutions, it's The Ramsey Show, where we help people build wealth, do work that they love, and create actual amazing relationships. George Campbell, Ramsey personality, is my co-host today. His book, number one bestseller, is Breaking Free from Broke. You jump in, we'll talk about your life and your money. It's 888-825-5225. Nyree is with us in Atlanta. Hi, Nyree, how are you? Hi, I'm doing good. How are you?

Better than I deserve. What's up? Yes, sir. So I am 36 years old. I'm a single mom of four. I make about $55,000 annually, and I have about $28,000 in debt, credit card debt, personal loans, a title loan, and I'm kind of in the rear on my mortgage. I recently filed bankruptcy in May, but I realized after watching your show and I have your book, the total money makeover, I decided to dismiss the bankruptcy case because after I added up my debt and then I looked at the fees that the lawyer was going to

charge me over five years, I was like, no, like, so I'm extremely excited, but I'm nervous at the same time. And I just wanted you guys to tell me, am I making the right decision? Okay. Did you actually file bankruptcy? So May 2nd, the attorney filed the bankruptcy, and then, like, recently, I'd say about two weeks ago, I told him to file a motion to dismiss. Okay. So you did. You filed bankruptcy.

You filed a Chapter 13. A Chapter 13. And then voluntarily dismissed your 13. Okay. So you're still behind on your mortgage. Yes, I'm still behind. Okay. And um all right okay um well here's our rules uh no one gets paid anything out of your income until you have food from the grocery store purchased for your family.

Your lights and your water are paid. The gas for your car to get to work is paid. And we catch up your mortgage. Don't pay any credit card bills. You got a title pawn on your car? Yes, sir. Oh, jeez. And that's about $8,000. Yeah, and you have a

monthly on it, right? Yes, and that's about $304. Yeah, you better pay that one, because they'll pick that car up in about 30 seconds. Yeah, they're not going to screw around. And you got a personal loan as well? I have personal loans. Yeah, no, they're not going to screw around. And you got a personal loan as well? I have personal loans. Yeah, no, they don't get a dime, and credit cards don't get a dime.

But you pay your car payment, you pay your lights, water, and we get your mortgage current before we do anything. Okay, so the credit cards are in collection. Good, just let them sit there. Okay. And we need to get on a written budget. And how old are your babies? Okay.

So I have a 5-year-old, 8-year-old, 12-year-old, and 15-year-old. Okay. All right. You got family in the area? Barely. I have one good sister friend that helps me out when she can, but that's about it. Okay. So I'm searching for a way with a house full of kiddos for you to get some extra income, because the more income we have, the faster we turn this mess around. Agreed?

Agree. What are you doing full-time for work? So I get compensation from the military. That's my main income income i just got hired at chick-fil-a um so i will be starting working with chick-fil-a in three weeks and um i do door dash sometimes so that's like you know some things that i'm so you've not been working a job? So I have not been, like, working, working in the past year. It's just been military compensation? Yes. All right.

Okay. Thank you for your service. Thank you for your support. I think the kiddos are going to have a single mom that now has a full-time job. Yep. And unless you're managing a Chick-fil-A or in a management program, if you're just going over there to fry chicken, no thank you. You need a real job.

You need a real career on top of your military disability, enough to be able to afford daycare or day or you know after school care or whatever it is so that you can go make another 55 i want your i want your income i want you to get a full-time job and get back to work you know you don't have a choice you're a single mom that's broken and behind on her house so sitting at home collecting the military is not cutting it for you it's not working for you so we have to change the the recipe if we want a different kind of cake here right and so yeah you need a full-time job to go with your military disability and it needs to be a substantial good career for you that you look back 20 years later and you've made a lot of money

and you've helped a lot of money and you've helped a lot of people and you've done a lot of good work and i want you plugged into something like that i'm not mad at chick-fil-a i we we've been friends with those folks for a very long time uh at the company level on a personal level and i eat their chicken sandwiches all the time so not not mad at all about chick-fil-a but but I think you need more than that. Yeah, we need an actual sustainable career that she can sink her teeth into and get out of this debt fast, because if she can even create 30 grand extra in income, well, we can knock this debt out in under a year. Yeah. Now, I'm going to send you a book by Ken Coleman called Find the Work You're Wired

to Do, and it has the Get Clear assessment in it.'ll give you a code and you'll jump online i'm going to give it to you free and i want you to jump online and take that and pretend like that you were 18 years old or 19 or 20 years old and you didn't have any kids and you said okay what am i going to do with my life what's my career going to be what's my future look like? Because you've been reacting to life rather than happening to life. And it's gotten you into a mess. And so I want you to get on the other side of this and start dreaming again about what a prosperous, wealthy Nairi would look like and how she would get there. And that involves a, you know, it may be some steps to get to a different career

a big time maybe you've always wanted to be a an x whatever x is and you maybe need to go take a class or two or get a certification to be one of those i don't know what that thing is but um but i i want you to have some direction for you you've've lived your life for others so far, and it's not even serving them well. So I want you to create some vision for what you want your life to be like. Some big-time goals of where I'm going to be in 20 years. So hang on. Christian will pick up, and we'll get you that. And good stuff.

Good question. Open phones at 888-825-5225. Just to clarify for everybody listening, a Chapter 13 bankruptcy is a payment plan that takes 60 months to go through. You pay 100% of your student loans, 100% of any secured debt, like a car loan or title loan as an example, your mortgage, everything gets paid 100% except unsecured debt, which can be paid a percentage of. So the credit cards, personal loans could be 70% of what's owed, 40% of what's owed,

depending on how the formula worked out, over five years. Usually, folks can do a better plan themselves and get out of debt a lot faster by increasing their income. George Campbell Ramsey Personality is my co-host. Kyle is in Boston. Hey, Kyle, how are you? Hi, Dave. I'm good. How are you? Better than I deserve. What's up? So I just paid off a little under $50,000 in consumer debt.

Good for you. Since March. Way to go. Consumer debt and an auto loan. How'd you do that since March? Using the EveryDollar app. Do you have a pile of money in your bank or something when you started? No, I'm in my second year of owning an event rental business, and it's been pretty good.

Okay, so you're just making a lot of money and you just dumped it all on debt. Good for you. Way to go. Yeah. So I have $68,000 in student loans and then $179,000 in mortgage. So I'm kind of looking for your advice on the next steps in paying this off. I do okay financially. What's your income?

Teaching is about $65,000, and then the event rental business is a little bit over $100,000. Wow. So $165,000. Are you doing the event rental stuff part-time? It goes from March to November, and then the school year. I mean, it overlaps with the school year a little bit, but... Okay. Amazing. So you're making $165,000 if this keeps up?

Yes. Okay. Yeah. So the student loans would be next and your debt snowball. Are those broken down into several different student loans? Yes, they are. However, I kind of had a question on the order of paying these debts off because, so I mean, I have no kids now, but I could see myself settling down and having kids in the next few years. I'm really trying to like hammer away at all of this before I have kids and get married.

And when I think about like what's more important to me as far as priority and having peace of mind when I have kids, I keep going back to the mortgage before my student loans, which I know is opposite of what you typically teach. And then being a teacher, I'm also in a master's program right now and will be for the next year and a half or so. So I'm able to defer them for a bit. So I just didn't know your take on that. I still don't think kicking the can down the road is going to be a blessing to you. And is there a person in your life right now? Are you dating somebody?

Or is this just future thinking one day I want to... Okay. I wouldn't worry too much about all of that and what the mortgage is going to be one day. I would focus on knocking out all of your consumer debt right now. And the mortgage will get paid when it gets paid. And it's also going to appreciate as long as you have that home. It's going to go up in value. And the student loans, I would not kick down the road.

Do you have the money to pay down these debts in the next year you make 165 you paid off 50 since march you'll be done by what october so you're throwing 10 grand a month everything i made was was being dumped into it yeah i know but i mean you just keep doing that you'll be done by october with your student loan well it does slow down a bit because my business slows down a bit in nove business slows down a bit. In November? I'm living. Yeah, in November.

That's what you said. I said you're going to be done by October. You paid $50,000 since March. Pay another $50,000 and be done with this thing. And you'll free up all the payments from those student loans. And then pay off your mortgage. And, you know, next year, next two years, you pay off your mortgage. Dude, you're killing it.

You're a stud. Do you have money in savings, Kyle? About 15 grand. Okay. Is that partially for the event rental business, or is this just sort of your personal savings? That's for the event rental business. Okay. Well, I think you can knock out these student loans, free up the payments, get a fully funded emergency fund,

and start investing and then begin paying off the mortgage. Here's the thing. At the end of the story, three and a half years from now, you have zero debt either way. If you pay off the mortgage first and then pay off the student loan, you pay off the student loan first, which is the correct thing to do, and then pay off the mortgage. Three and a half years from now, you're done. I guess I'm just kind of planning for worst case scenario like let's say just everything you know what why did you pay off the other debts then um well the monthly payments were just so ridiculous i didn't

somebody somebody convinced you that you needed to get out of debt and then you called them and asked them should i really get out of debt yeah do it man knock out the student loan as fast as you possibly can don't wait until everything's screwed around with your math theories and knock this stuff out knock it in the head it's what it's it's worked for you don't quit doing what is working. It's working. Finish. And it's very successfully working. It's very fast.

And let me tell you this, Kyle. Do not wait until your mortgage paid off to start a relationship or get married or have kids. I'm from Boston. Half my family's like this. They're working on their third master's degree, and they're going, well, one day when I'm settled, I'll – no, one day it's not going to happen. Just if you want to be in a relationship, start a relationship. If you want to get married, get married.

The debt will solve itself as you begin your life. You're doing great. Just finish. Just finish the plan. You see, you're doing it. Don't stop. Knock the student loan out. Do it in the next – do it by October.

Sit down. When you get off the phone, sit down and lay it out. Lay it out on your little spreadsheet because you're a spreadsheet guy I can tell and 56,000 you've already done 50 since March I can do it in my head you're done in October okay you just do it again you know all you did was you were gazelle intense don't let your foot up off the gas list those student loans out smallest to largest work your debt snowball attack attack attack attack attack attack drop a freaking atom bomb on that thing and be done with it quit screwing around with well i don't know if i'm gonna pay no get rid of it this is what you got to do done done i hope that was

clear nick is in minneapolis hey nick how are you? Hi, guys. How's it going? Better than we deserve. What's up? So, in March, I started a landscaping company. Since then, I have netted $250,000 and some change. Wow. And I have not paid myself whatsoever out of it, and I'm just kind of curious, how should I go about that, if I should put myself on payroll or if I should do like an owner distribution? You have $250,000 sitting in a checking account for a lawn mowing business. So I'm not doing lawn mowing. It's building patios.

Okay, in your patio business, you have a checking account and it has $250 250 000 sitting in it uh it's got just about 375 000 because that's what i grossed but you got bills to pay out of that not out of that no all my equipment i own all right all your cost of materials and everything for those jobs has been paid correct okay now okay and you have a separate account for your business correct correct good good for you wow that's under my llc you're freaking amazing is it just you or do you have a big team listen just write this down send it to dave's bahamas fund there we go i'm just kidding po box wow oh my gosh um very cool man i'm so proud of you all right stud here's what we do we when you move money out of your

business that's an llc and you take the money home you need to withhold 25% on yourself because that's going to be your taxes. So if you take $100,000 out and move it home, move $25,000 into another little savings account over here to the side that you never touch because you need to be filing quarterly estimates on a small business or you're going to get penalized. And you're supposed to be filing quarterly estimates on your profits. And if you don't do it in the first year, you don't get penalized and you have to you're supposed to be filing quarterly estimates on your profits and in the if you don't do it in the first year you don't get penalized but in year two three and so on after that you'll get penalized so go ahead and get with an accounting person get with a tax person and get your quarterly estimates set up they're not hard it's a one-page form it's you

know what i took in minus my expenses is my profits times my tax rate, and you've withheld on yourself, and you got that $25,000 out of that $100,000 sitting over here in the account, and you'll have the money to pay your quarterly estimates. Otherwise, you're going to get behind with the KGB, and you don't want those people calling. I mean the IRS. You don't want them calling on you. Okay? Okay. So then how much can you take home i mean you could take home anything

that doesn't leave the business and and threatened if you're paying all of your expenses whatever's left is profit you can take it all home and use it on your use it on your baby steps and i would way to go stud that's impressive man that's some patio building right there. Yeah. Meanwhile, over in wherever, I'm unemployed. With a four-year degree that I can't use. Yeah. With student loan debt. This guy makes $375,000, $250,000, whatever it is, and building patios.

Love it. He's got to be good at it. This is The Ramsey Show. George Camel Ramsey personality is my co-host. Thank you for joining us, America. Open phones at 888-825-5225. Today's question comes from Leslie in Nebraska. Here's what Leslie has to say. I recently found out that my husband wants a divorce. He says he's felt that way for about a year, but I suspect it's been much longer.

I've been a stay-at-home mom for 26 years, and I'm afraid he's going to leave me and our kids who still live at home with nothing. What do I need to do to put myself in the best possible position when he finally pulls the plug? How do I protect myself and our children? I haven't been able to trust him in our marriage, and I know I won't be able to in the divorce proceedings either. I'm willing to do the work, but I just need to be pointed in the right direction so I don't waste time and money getting myself together. Leslie, I'm so sorry. That is awful and especially scary for stay-at-home moms who are very vulnerable in these situations because they haven't had the income for this long so i you know step one is kind of get a lay of the

land and as much as you can about what's actually going on in the finances he's he's probably been like honey i got this don't worry about it and left her out of it on purpose. No, it's very possible. You're not vulnerable at all, Leslie. In Nebraska, you're due half of all the assets and a whole bunch of his income for alimony because you've been in a long-term marriage and a whole bunch of his income for child support. So he's the one that's vulnerable. He's just so dumb he doesn't know it yet.

So, yeah, what you need to do is go get an attorney today. You need to talk to a divorce attorney today, and they will tell you what the laws in Nebraska will demand that he does. He doesn't have the choice of leaving you with nothing. The law doesn't allow it. And so you need an attorney to tell you how life works and how the law works, because apparently neither one of you, you or him know that. And, um, that'll give you some peace because you'll know, Hey, I got, you know, we're going

to sell the house and there's, you know, $500,000 worth of equity, and I'm going to get 250,000 out of that. And, Oh, he's got 150,000 is in his 401K. I get $75,000 of that. Oh, he's got this. We've got that. I get half of that. So you're okay on the short term. Now, long term, it sounds like you need a new career. And so what are we going to be when we grow up?

What's the next chapter of our life? What's the new version of Leslie goes to Nebraska look like? Yeah, I mean, all the kids sound like they're grown and gone if she's been a stay-at-home mom for 26 years. Leave me and our kids who still live at home. All of them? I don't know. There's a question.

I don't know. They should be approaching age to leave, or maybe they're 22 and need to leave. I don't know. But, yeah, you need to leave i don't know um but yeah you you need to go get a job and you need to start having a career and what are you going to do with your life and what does retirement look like you know if you've been if you were 20 when you got married you're 46 if you were 25 you're 51 and so you've got a lot of life left ahead of you there's an

encore here there's a chapter two, a second act, whatever we want to call it. And you're going to have a great life. And, um, you're, you're not gonna, you're going to realize when you're super happy and prosperous four years from

today, how miserable it was living with a sap. So, um, good riddance is what it sounds like. I'm sorry. You're going through this, but that's the way,

that's the way the story is going to end. If you will embrace two things, one is get some sounds like. I'm sorry you're going through this, but that's the way the story's going to end if you will embrace two things. One is get some legal counsel, and two is start developing you a career path as soon as you possibly can. And so, you know, what's the next thing for Leslie? This chapter is coming to a sad ending, but it is ending.

And what do we do from here? What's our next thing ouch no fun at all no doug is in san jose hey doug what's up how are you sir better than i deserve how are you about the same i guess uh probably better than i deserve but i'm working on it cool how can we help? I'm calling. I own a small construction company, married. My wife's a nurse. We own two homes in San Jose, and we're broke.

Why are you broke if you're a nurse and you've got a construction company? Because I don't know how to manage money. Oh, okay. How much debt do you got? So I have an SBA loan for the company, $130. I got a HELOC on one of the houses for $150. One of the houses I owe $700 on000 on, and one I owe $600,000 on. Okay.

What about the one you live in? The one that I live in, I owe $600,000 on. Okay. So you owe $700,000 plus $150,000. He likes $850,000. What's the other one worth? The one that I live in? No, the other one. The other one is worth about two million between one eight and two two okay and so if you sold it you could be

debt free yes so why are you hanging on to the investment property uh because for my kids i imagine uh i mean that's because i don't have a 401k and i kind of figured that was uh would be my my money that i could you know give to the kids okay um well and then you call me and you're broke so this is not working yeah so i'm looking for a plan basically you borrowed a heloc an sba loan and kept a home mortgage in order to buy an investment property that's that's that's and that's in essence what has happened or in order to keep an investment property to keep from selling it see if you had sold it you wouldn't have the heloc and you wouldn't have the sba loan and you wouldn't have the mortgage and so now you can still sell it and not have all of those things that's a good start

that's probably where I'm starting you got and is that the only debt you've got uh I believe I probably actually I have a I probably have 20,000 in in credit cards okay and then we need to sit down and start living on a plan a budget so that you and your wife sitting together with the every dollar app you go through financial peace university i'll give you both that's my gift if you'll do it okay go through the class sit down start writing out a plan so what do you what do you build with your construction business? What kind of buildings do you do? It's actually a waterproofing company, and we work on commercial buildings mostly and apartment buildings, decks and underground parking garages and podiums and planners.

Okay, so you have to, I presume you have to present a detailed plan and a bid to your customers, don't you? Absolutely. And then you have to execute that detailed plan and bid in order to make a profit and in order to deliver the service as promised. Is that right? Yes. Yes. Okay.

All we need to do is apply that exact same skill set to your monthly budget. We're going to lay out a plan for where our money's going to go in detail, and we're going to execute the plan. And the two of you, you and your wife need to agree to that plan before the month begins, just like you and the customer agree to the budget and the schedule of the job when you get the new job, when you're bidding a job. And so building a building, you know, doing construction work in detail. Now, some people do it out of their hip pocket, right? But you're doing it professionally. And if you'll apply that exact same mentality to your monthly budget, tell your money what to do before the

month begins and then go do it you and your wife then you don't accidentally end up with credit card debt or accidentally go oh god we got to clean up this mess with a heloc because the heloc was to cover a mess wasn't it actually was to build i pulled it to build on the house but yeah i yeah i should have not borrowed the money yeah yeah so if you're doing that then you're not doing any more damage and you've got peace and you've got this great income with no payments in the world to prosper by selling the rental i would sell the rental and get myself on a plan i can breathe just thinking about selling this thing and being completely debt-free with money left over for an emergency fund and then restarting with this fabulous income in California.

Now, if you do that and you don't change your habits, you're going to be right back in a mess again. So it's a two-part answer. You've got to change your habits, get on a plan, start executing like you were doing a job with your spouse in agreement. Hang on. Christian will pick up we'll get you signed up for everything for free and if y'all will go do it we'll help you do it and then

you'll be safe to sell the rental if you sell the rental and keep doing the stupid stuff you're gonna be right back in the hole with no rental to sell don't do that if you live like no one else later you can live and give like no one else you pay a price to win if you've done that and you've gone through baby step three meaning you're out of debt except your home and you have your emergency fund in place then you're in baby steps four five and six simultaneously saving for retirement kids college paying off the house and at that point is when we say okay go out to eat again buy the couch go on vacation again that kind of stuff but when you're in baby steps one through three you don't do that so that's why we named our cruise that we're doing in march the live like no one else cruise because

it's for baby step 4 and beyond, obviously. If you want to come and celebrate your debt freedom or celebrate your reaching the Baby Steps Millionaire's Pinnacle or whatever it is you're doing, we want to celebrate with you on the Live Like No One Else Cruise. 100% of this first-class, high-class Holland America ship will be Ramsey people. It's going to be Sharon and I and all the Ramsey personalities.

Manit Chauhan from the Food Channel is our friend, and she's just incredible. She's going to do some cooking demonstrations. Stephen Curtis Chapman, multi-Dove winner, multi-award. What am I trying to say? What's the other award awards grammy awards grammys i couldn't remember trying to give him an academy award there's too many the reason i got distracted is steven was at my house last night and guess what last week he was inducted into the he's the first christian artist to ever be inducted into the grand old opry no way that's incredible he played the grand old when he was 19 years old

when he was doing shows at Opryland. It's a great story. And messed the words up because he was so nervous on a George Strait song. Oh, wow. Or a George Jones song. And so he tells that story all the time because he's humble, he's funny.

And so Ricky Skaggs, friend of his, friend of mine, was there to do the induction and they surprised him he didn't know it was going to happen and he told the whole story last night it was fascinating so that's special add another grand old opry inductee steven carter chapman will be one of our guests on the cruise we love having him dina carter uh country artist obviously he'll be there very one yeah strawberry wine there we go we got magicians we got comedians songwriters a lot of people going to be with us um one of our favorite pastors is going with us we're going to have it's going to be all ramsey all week we're going to

have stuff i mean there's no shows on the thing it's all stuff it's all of us speaking and teaching and and doing different things and all these different other performers and things will be doing their thing it's it's going to be a blast. Can't wait. The Live Like No One Else Cruise. Oh, by the way, we're also going to Turks and Caicos, St. Thomas, Puerto Rico, the Bahamas. It's pretty incredible. So it's almost sold out.

It's March 22 through 29, but you can still get a cabin if you go ahead and get it right now. Don't screw around with this because you're about to miss it. Yeah, I'm looking at the site now. The suites are all sold out one of the state rooms is sold out there's two state rooms left you could even book two two types two types yeah not two not just two yeah but there's more than two rooms but not many i mean there's a handful so you need to get this done and uh put up you can put up a 600 deposit and before the cabins are gone and then if somebody drops out if you want to upgrade you could upgrade you can put up a $600 deposit before the cabins are gone. And then if somebody drops out, if you wanted to upgrade, you could upgrade. You can do all kinds of stuff.

But you've got to get your foot in the door here. And you've got to get this locked down before it gets away. Ramseysolutions.com slash cruise. Again, it's on one of the top Holland America ships. It's almost new. It's a fabulous, fabulous product. And we're excited. It's going to be the first time we've ever actually done one of these,

and it's going to be big. It's going to be ready. It's going to be amazing. All right, Tyler is in Cincinnati. Hey, Tyler. Hey, Dave and George. How are you all doing today? Better than we deserve.

What's up? Hey, long-time listener, second-time caller here. I'm going to ask my question first and then provide some family and financial contact. That's that. The question is, I've been maxing out my 401k since I began gainful employment about 10 years ago. I now have the opportunity to contribute to a 401k Roth. I'm just not sure what percentage to contribute to that. 100?

100%, even though the 401k has a significant balance to it. No, I'm not moving the significant balance. I'm talking about contributing. What you put in from this day forward should be Roth. 100%. And any guidance or recommendation on the risk of the funds? Aggressive, moderate? Well, you'd stay, if you were in the same, you know, we talk about four types of funds. If you're diversified across those four types,

you'll still invest in those same funds. You just get the Roth treatment, which means it's after-tax dollars that grow tax-free. So it doesn't change the way you're investing. I'm sorry. We recommend four types of funds, growth, growth and income, aggressive growth, and international, putting a fourth into each. Did you know that already? I did, yes. Okay. So it doesn't change whether it's Roth or whether it's traditional. You do the same exact mix of funds. So you just leave the traditional alone, it'll continue to grow, and you begin investing any new income into the Roth portion. How much is in the funds in the traditional today? $300.

And what's your household income? Household, $270. And are you out of debt, house and everything? The only debt is the mortgage. How much is it? My wife and I, the mortgage, $400. Okay. Yeah, when you get that knocked out,

I'm going to begin to move some of the traditional with out-of-pocket cash. So, like, let's say the house was paid off. You're still making 300 you're you know by then you probably are right you're still loading everything up as much as you can load it up i'm going to move 100 a year out of that 400 or and uh when you move 100 it's going to cost you about 25 out of pocket give or take or maybe 30 and uh so just take that 30 out of your pocket, move the whole 100 over into the Roth. And that is the equivalent of having invested another 30. Now, for my family situation, I'm wondering if this changes the strategy.

I'm married with three young kids. We have a fourth due in September. My wife and I both work. We're both 35. We've both been maxing out our Roth IRAs and 401ks since we started employment. We have 529 set up for the three kids. We'll have it set up for the fourth one in September. In retirement right now, we have about 1.3 in savings. And with that context, does it change anything with that plan? And if we reach a salary point where we cannot contribute to the Roth 401k, is there a way to begin that 401k back up and still contribute? The Roth has the exact same limitations as the traditional on a 401k.

The only reason you would reach a salary point you couldn't do a 401k would be if your company had a problem with highly compensated people. And it was out of balance, and they had to back down how much you could put in. There's an income limit for the Roth IRA, but not the Roth 401k. There is no income limit for the Roth 401k. Correct. Okay. And even with the IRA, you could do a backdoor Roth IRA. Yeah, I'm vaguely familiar with that.

I need to do some research on my end. You need to just sit down with your smart investor pro. Also, by the way, let me back up a little bit, because you've done such a great job saving money. Congratulations. You're a millionaire at 30. I mean, you're amazing. You've done a great job saving money congratulations you're a millionaire at 30 i mean you're amazing you've done a great job but if you're going to follow the baby steps which is what we suggest you would only be putting 15 away until you got

the mortgage paid off and i think you're putting more than 15 away that's about 40k total so if they're both maxing out their 401ks that's already over that amount yeah okay so you may want to back down slightly put more toward the mortgage, knock it out. It's a minor detail in your situation, but the wealthier you are, the more important it is for it to be Roth because Roth doesn't force you into when you're 72 into required minimum distributions that would throw you up a tax bracket because Roth is a hundred percent tax-free and does not have required minimum distribution. And throw you up a tax bracket because Roth is 100% tax free and does not have required minimum distribution. And the traditional does,

it gets you into a pinch. So like, dude, when you get out to my age and I've got, you know, a bazillion dollars in my stinking retirement and, uh, cause I've been doing it a long time and have maxed it for a long time.'s a lot of money in there so i would be i've moved it all to roth years ago and paid it out of my pocket the difference like i discussed with you if you uh haven't done that the um you know like i had a guy call in the other day was eight million dollars wow and he's the the amount he's required to take out throws him in the top tax bracket even 10 it's 800 grand yeah but the required distribution is 72 so he's required to take out throws him in the top tax bracket even 10 it's 800 grand yeah but the required distribution is 72 so he's screwed he got it he got back in the corner

with the traditional the roth allows you to escape that this is the ramsey show We'll see you next time.