The Ramsey Show - App - Don't Be Content With Living Like Everyone Else (Hour 3)

Episode Date: November 28, 2019

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Live from the headquarters of Ramsey Solutions, broadcasting from the Dollar Car Rental Studios, it's the Dave Ramsey Show, where debt is dumb, cash is king, and the paid-off home mortgage has taken the place of the BMW as the status symbol of choice. I'm Dave Ramsey, your host. You jump in, we'll talk about your life and your money. It's a free call at 888-825-5225. That's 888-825-5225. Starting off this hour is going to be Sean in Colorado Springs.

Hey, Sean, welcome to the Dave Ramsey Show. Thank you for taking my call. Sure, what's up? So I have a quick question, and then I'll take it off the air, because I'm actually at work, and I know you want to quiet in the background. What is the difference in your take on HSAs and flexible savings accounts? Okay. Well, they are completely different things.

The health savings account can only be used for medical and um and you save money in that pre-tax and you can use it anytime in the future a flexible savings account has to be used in that year and flexible savings accounts can be used to cover medical deductibles they They can be used for eyeglasses and dental. They can be used to pay daycare. They can be used for whatever your company HR team has put together that allows the FSA to be used for. But whatever you put into the FSA, like let's say you put money in there for daycare, it has to be spent on daycare in that calendar year or you lose the money. So you never overfund an FSA.

You always slightly underfunded. And so you put money in there. The HSA can just keep building and building and building and building, but can only be used for medical. Both are pre-tax. Both can come out of your check if you want them to. And so what I recommend the FSA for are very, very predictable things that you know you're going to buy. Okay, we've got a kid that has braces. We're going to pay for the braces through the FSA, and it's going to be this much this calendar year, period.

We're going to pay for daycare through the FSA. The beauty of it is every $1,000 that you run through the flexible savings accounts saves you $300, $400 in taxes. And so it's as if instead of you paying your daycare $1,000, you're paying them $700 and the government's paying them $300. It's about the way that works out. So the FSAs are great to do pre-tax spending on things that are predictable and that you know you're going to do.

The HSA is obviously attached to your health insurance plan and covers a large deductible lower premium health insurance plan. But again, only can be used for medical and can build up. So I would use them both if you have the money availableible unless you had a chronic illness and you knew you were going to break the deductible every year. Or you had a predictable thing this calendar year and you were going to break through the deductible. You could run that through an FSA. But I wouldn't use it to cover medical deductibles in a normal flow of life. Vince is with us in Phoenix.

Hi, Vince. Welcome to the Dave Ramsey Show. How are you doing, Dave? First-time caller, long-time listener. Well, thank you, sir. How can we help? I'm in so much. I'm in a depot, and I've been trying to get myself out of it.

Okay. I've got three loans, basically vehicle loans. Stupidity is what got me there. And then I'm trying to, basically trying to get myself out of debt. I went to, trying to, I got a 2016 Chevy Chevrolet. Took it down to a car dealership. They gave me a price. Not much what I was asking for, but, you know, try to do it that way.

So I went to a bank to see if I can get a difference in the loan to get it paid off to make payments to the bank instead. But the banks won't touch me because of my credit. Yeah, bad credit. I'm basically just trying to get out of debt. I'm basically trying to get rid of the brand new truck. All right, let's stop a second. So the car, the Chevy Silverado, let's start with that one.

What is it worth? Okay. They got it priced at $24,000. The dealer? The dealer. Okay, that's not what it's worth. That's wholesale then. Yeah, that's what they offered me.

So you need to look up on Kelley Blue Book what the car is worth because you probably need to sell it instead of selling it to a dealer. I'm going to guess and say it's worth $27 or $28 if the dealer offered you $24 because they're buying it at wholesale to resell it to make a profit. There's nothing evil about that, but they're buying the car cheap. It's what they do. So what do you owe on the Silverado? $32.

Okay. So let's pretend you could sell it for $27 and it's worth $32,000. Okay. So let's pretend you could sell it for $27,000, and it's worth $32,000. Then you'd need $5,000, and we've already figured out you can't borrow that because your credit's bad. What do you make a year? I make between $50,000 and $60,000 a year, roughly. All right. And you're single? No.

Does she work outside the home? That's my other problem. I'm trying to help pay her debts, too. Are you married? Yeah. Okay. So they're your debts. All right.

And so how much does she make? She makes probably about $32,000, $33,000 a year. Okay. All right. So we've got a $90,000 household income that you need to save up $5,000 in order to get the Silverado sold. Now, the next car, what is it? It's a 2018 Chevy Trax. Okay.

And what do you owe on it? $32,000. Okay, and what is it worth? I didn't even look it up, but I tried to refinance it. They told me it was about $9,000 over whatever they were asking for. Okay, that's loan value. Again, that's not what it's worth. And so the same situation there.

It sounds like that's going to be worth probably in the $25,000 or $24,000 range. When you look it up on Kelley Blue Book, you need to go to kbb.com and look these up on private sale. What's the next vehicle? It's a Harley Davidson. Okay, and what do you owe on it? $8,000. Okay, and what is it worth? Who said?

The Harley-Davidson dealer. One of the right-now places. Well, right now owns Harley-Davidson, no. Yeah, okay. But bottom line is, again, you're trying to sell these cars at wholesale. So that car, that Harley's probably, if're trying to sell these cars at wholesale. So that car, that Harley's probably, if you were to put it in the newspaper or put it on Craigslist, it's probably worth about what you owe on it.

Yeah, roughly. So let's look that up and figure out what it's worth and get it sold. And then let's figure out which of the other two cars we're going to sell first when we save up $5,000. And you need to get yourself on a tight budget. Beans and rice, rice and beans. You need to start selling everything in sight that you can get your hands on and clear yourself out of these cars. You are freaking car poor. This is a ridiculous situation with cars.

And you've got to get a share out of all three of these vehicles. I agree with you, your conclusion on that. But it's probably going to take you a year. This is the Dave Ramsey Show. Are high health care costs getting you down? Are you confused trying to navigate your options? Do you wish you could find an affordable, biblical solution to your health care costs getting you down? Are you confused trying to navigate your options? Do you wish you could find an affordable, biblical solution to your health care costs? Based on New Testament principles, Christian Health Care Ministries, or CHM,

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is a proud sponsor of Dave Ramsey Live Events. chministries.org. Julie is with us in Indiana. Hi, Julie. Welcome to the Dave Ramsey Show. Hello. Hi, how are you? I'm good. How are you? Better than I deserve.

What's up? Okay, so six months ago, my husband and I were feeling the pressure of not being able to make minimum payments on our debts, on our credit card debts. And we fell for the debt relief program. Then two months ago, we were introduced to you now we are so confused like we don't know if we need to get out of this how we get out of it how we even come to terms with being six months past due on all of these debts now and as well as paying for the debts that we've kept um okay so what is your household income? $108 last year. It'll be maybe around $110, $115 this year.

Gotcha. And how much debt do you have total, not counting your house? Including what we put into this consolidation loan? The debt. Well, without that. How much debt do you have outstanding, not counting your house? $93,800. Okay.

How much of that is credit cards? $23,700. Okay. And what's the other $70,000? Student loan, car loan, 401k loans, and cell phones. How much is a car loan? $16,800. Okay.

All right. So the $23,000 is what's in this debt consolidation thing where you've been paying them, and they stopped paying all your credit cards in order for them to go into default so they can negotiate with them and that's their debt relief plan right yes yeah yes so you destroy one has been negotiated yeah so they destroy your credit and they sit on their hands and don't do boo which is what these people do They're absolute losers. Okay. We currently have $1,500 sitting at this debt relief place waiting for them to do something.

Have them return it. We can do that. We didn't know if we could find a contract, if we can even get out of it. Yeah, we're ending the program. Return our money. Okay. Period. And if they argue with you, tell me you're going to turn them over the

federal trade commission if you don't get your money back in 48 hours okay because these things get hammered by the federal trade commission this is one of the largest complaints of any industry is the quote debt relief industry unquote which usually doesn't relieve much debt as you have discovered all they do is destroy and screw up your life. Now, what this means is that then you have to take over and start calling your credit card companies and start working deals. Okay. You make $108,000, you can do this, okay?

Okay. And so you're six months behind on all of them. How many of them are there? Eight of them. Okay. that's not too bad so you have eight pretty severe arguments that you're going to have to have repeatedly okay and then you're going to settle this in writing before you get any give them any money. And so you owe $3,000 to a card that's six months behind. You offer them $1,000, and you go back and forth until you get it to $1,200 or whatever, and then you get that in writing, and then you give them payment, and you do not give them payment out of your main checking account.

You can get a prepaid debit card if you want. You can have a separate checking account that doesn't have any money in it except what you're dealing with because these people lie, cheat, and steal in collections departments at credit card companies. You can tell they're lying if their mouth is moving. And so just because they say they gave you a deal verbally, you do not have a deal. If it's not in writing, it didn't happen, and don't let them have access to your account because they will freaking clean you out. They lie. We deal with them all the time.

They're scum. Okay? So you've got to go in there and fight this through now, but the difference is that now it's actually going to get done. Great. As you've discovered, these other people don't follow through, right? No, no. They were telling us, well, of course, when we signed up for it, they tell you what you want to hear,

and they said in three to six months, and now it's been six months, and they've had one settlement, and they were telling us four years. Yeah, yeah, nothing. And four years isn't going to happen either because they don't work. They're incompetent. They don't follow through. The whole industry is just scummy. So, yeah, you just have to take control of your own life and that's the only way you're going to get this done thanks for calling in open phones at 888-825-5225 you know we've actually

looked at trying to do something similar except actually doing it but the industry everything around it is just so scummy i just didn't want to put my foot in it. I didn't know if I'd ever get it off my shoe, you know. Sean is with us in Biloxi, Mississippi. Hey, Sean, how are you? Hey, Dave. Thanks for taking the call. Sure. What's up?

So I just recently started listening to you a couple weeks ago. You're going to speak directly into your phone. I can't understand you. I'm sorry. That's better. Thank you. I just started listening to you a couple weeks ago, and I'm trying to get organized here and get rolling on this debt snowball.

I've added everything up, and I got about $90,000 in both credit card debt, student loans, and auto loans. But my question is, before I purchased my house two years ago, my dad financed some debt I had so that I could get into the house. I really bought something that I couldn't afford. Now I'm kind of stuck on how to organize it into this snowball and pay it back because I haven't paid him. I haven't been making the monthly payments on it for about a year and a half, and he's been putting the bill for me. How old are you?

32. How much do you owe him? It's down to about $8,000, but like I said, I hadn't paid him in a year and a half, and it's about $380 a month is the note. That's what you owe him? Yes. Okay. All right.

And, well, it would be fairly early in your debt snowball, wouldn't it? It's one of your smaller debts. Yes, sir. Yeah, it's one of your smaller debts, so you're going to get them paid off pretty quick. Well, first thing I do is just start paying the monthly payments that you're supposed to pay. But you pay minimum payments on everything except the smallest debt, and you attack the smallest debt with a vengeance. That's the debt snowball plan.

And so let's get back to paying the $380,000. And what's your income? It's about $62,000 to $65,000 with part-time income. And how much do you owe on your car? Mine is about $13,000, and my wife's car is $33,000, and we're actually putting it up for sale. And that's part of the $90,000? Yes, sir.

Okay. Yeah, that car is gone. When I ask your income, I'm sorry, I meant to ask your household income. What is your household income? That is my household. My wife stays home with the three kids. Yeah, that $33,000 car does not fit in a $60,000 income with a $90,000 worth of debt. There's nothing in that equation that says you can keep his car.

It's gone. So I agree with you. Yeah, get it sold and then, you know, call Dad and go, hey, I'm getting on a plan here, and I'm going to start paying you monthly. And he's going to say, don't worry about it. And I'm worried about it. I want to get done. So we're going to list it smallest to largest.

And when you get down to the – that one is the current – you know, when you pay down the little ones above it and you get down to that one, then you just start paying as much as you can squeeze out of the budget at it until it's gone. And then you move on to the next one, just like it was a, you know, a loan over at the credit union, treated exactly the same way. Unless he's starving or something. Is he starving because you hadn't paid him? No, because, you know, he's drawing his military retirements and he works full time. Okay. He's got his money on, you know, on point. his military retirements, and he works full-time. Okay. He's got his money on, you know, going.

Okay. I don't. Okay, so it's not like you're killing him as a result. I mean, if he was, you know, 80 years old and couldn't eat because you hadn't paid him, I might put him at the top of the debt snowball. But otherwise, I'm going to put him right in line where he goes, and that's smallest to largest. We got rid of 33,000 just now on the one car. And, you know, get a beater to drive until you get this mess cleaned up.

And start to work your way through it. You got a pretty big hole here, dude, with a medium-sized shovel. You can do it. You're going to have scratch and claw. There's going to be some work here. And like you said, some extra work as well. So, hey, thanks for the call. And if you need some more help, you call me anytime.

It's what we're here for. This is the Dave Ramsey Show. It's common sense. Well, not always exactly, but mostly it is. It's all revolving around this idea that if you don't have any payments, you've got money. And you can become wealthy, and you can be more generous, and do all these kinds of things. But you give it all the bank and you've got to stop that. This is the Dave Ramsey Show. We'll be right back. In the lobby of Ramsey Solutions, John is with us. Hey, John, how are you?

Hey, Dave, I'm great. Thanks for having me here today. Absolutely. Where do you live, sir? Indianapolis, Indiana. Cool. Welcome to Nashville. And all the way here to do a debt-free scream.

Yes, sir. Very cool. And how much have you paid off? I paid off $46,000. Good. And how long? 31 months. Good for you.

And your range of income during that time? It was about $48,000 to $53,000. Cool. What do you do for a living? I do insurance claims. Good for you. What kind of debt was the 46? Most of it was student loans.

There was about eight left on a used car out of that 46. And how old are you? 27. 27. Okay. So you've been out of that 46. How old are you? 27. 27. Okay. So you've been out of school like five years. Yep. But two and a half years ago, something happened. Yes, sir.

What happened? So I was sitting there, and I had taken the class, and I had the head knowledge, but I didn't... You mean financial peace? That's correct. Okay. I had read the books, but I didn't change any of my behavior, which, spoiler, doesn't work that way. So I'm sitting there and I'm making a budget that's really just keeping track of my dumb decisions.

And I find out I've got about $40,000 left, just about, and it's almost going to tick over into $30,000. It's a big moment for me. And I realize, I find out that I have more debt that I didn't realize. We've got another student loan out there. It was more than I had paid off in the previous year. So that was a kick to the teeth. And I felt like I had just lost a year of progress and I'm sitting there and I'm looking more like Arthur than Ben. And so I pouted for a little bit, but I had to look at myself and say, you know, this is my mess. This is my debt.

Nobody else is going to do it. I have to clean it up. You know, I've got to take charge of this and change my life because I'm not doing it right now, and I don't want to live like this. I don't want to live like so many Americans are today, and I think I've got a better shot than that. Amen. So you just had a come-to-Jesus moment with yourself, huh? Pretty much.

It was just grabbing hold of my own behavior and my own decisions, really. Very cool. So what do you tell people the key to getting out of debt is? You did this in 31 months once you got serious. That's good. Yeah, yeah. The key is you have to believe it. It's a destination. It's good. Yeah. Yeah. The key is you have to believe it. You know, it's a destination.

It's not a unicorn. Like my brother, he saw what I was doing and he graduated college debt-free. I've got a friend, Chris, who graduated, he was debt-free now. I've got Travis, he's on his way. There's tons of people. And that's really, truly been, I'm excited for myself, but seeing all the people around me really get it and really see it and turn their ship and really move in a new path is so incredible. That's amazing to see. And there's people in the lobby here today who are so nice, and they're all either paid off their debt or they're on their way to it. So this is something that is achievable. And if you're listening today, you can do it.

Yeah. Amen. Very cool. Very cool.'re listening today, you can do it. Yeah. Amen. Very cool. Very cool. So really just believing is a big start. So once you started believing tactically, what things did you do to get out of that? What were the things that people need to do? Definitely.

The budget is the crux of it. The budget is your roadmap to the destination. If you're trying to go someplace you've never been before and you don't have a map, you're probably not going to get there. You shouldn't be surprised when you don't end up where you think you want to go. Follow that very religiously and

it's just every day. Pushing in that direction every day with every cell in my body. There was decisions that i made like um i had uh i had the driver's side of my car duct taped up for about two years because i wanted to be debt free more than i wanted a working car window it helps stay out of drive through uh food too so that helped as well and i moved to a cheaper apartment twice the second one we got out and my dad was kind of like are you sure about this one i was absolutely like those decisions

that you just make every day and um there was one month where we did a uh a super i did a super frugal may is what we called and um we i just wanted to see how deeply I could cut down on this budget, like how much was fluff. And I didn't go anywhere. I didn't do anything. Read books. Turns out the library's free. Went on walks.

I ate rice and beans literally for about 10 days. And Dave, rice and beans isn't good on the first day. It was not good on the 10th day. And so I got to the end of that month, and I was still alive. I realized I can do this. There's a lot of fluff here, and it's not what's important. Very, very cool. So what was the last debt you paid?

Yeah, the last debt was student loans. And when you pushed the button and it was gone, you were done. How did it feel? It was incredible. I went home. I knew when I was going to be able to pay it off. I went home. I think it was Memorial Day weekend.

I did it, and I was so excited. We celebrated that weekend. It just felt like 1,000 pounds had been lifted off my shoulders. At that point, when I first started, it wasn't a whole lot. It was like an extra 100, an extra 200 maybe per month. At the end of the month, at the end of my debt-free journey, I was putting like 50% or 60% of my monthly income towards the debt. So when you have no debt and I have 50, 60% of my income per month back,

you can do some really incredible things with that much extra direction money. One of the things I did, my baby step 3B essentially was proposing to my girlfriend. All right. So I got a fiance here and I flew down. Her family was in Florida at the time and I surprised her by flying down on like one Friday and proposed to her in the middle of Florida. And that's the stuff you can accomplish when you're debt free, when you have the ability to do these things. Cool. So when are you getting married?

September 7th. We're saving up for the wedding. It's going to be in cash, you bet. I bet. Very cool. Very cool. Well done. So, how much confidence, how much more confident do you, personal confidence do you have now than you did? It's night and day. I mean, you know, she was always sort of

nervous that I was going to be on this death march, essentially, for the rest of our lives, and I kept saying, no like there's an end goal like this is temporary pain and you know you're thinking about well what am i spending where's it going uh now it's i've got an emergency fund and everything's going to be okay i had i had a lot of car repairs that happened during this process and i always had the emergency fund there to turn it from a disaster to a minor inconvenience. And now when you've got the fully funded emergency fund, you've got no debt. It's, I can do whatever I want.

Yeah. Who was your biggest cheerleader? Probably my friends. My friends were really good. They thought it was really weird at first. Because like I said, I was kind of a hypocrite. I was doing it really poorly before this period, so I shut up about it, and I just did it for about six months. And then after that, they were kind of, you know, they started to get on, and they were really excited about it.

My family was always there for me. It was really good. I didn't really have a lot of detractors. The only thing that got close to a detractor was there was a lot of people who would say, well, that's going to be fun for a little bit until you have to go back into debt. Or it'll be nice to be out of debt for a while. They just really didn't understand that this isn't a temporary thing. This is a permanent lifestyle. This is a change in your legacy.

It's incredible. Great. Very cool. Proud of you, brother. Well done. Got a copy of Chris Hogan's book for you, Retire Inspired, number one bestselling book. Thank you. And that is the next chapter. We're going to close the debt chapter and open up the wealth chapter.

You'll be a millionaire before you know it. And I will be one of our everyday millionaires and, of course, outrageously generous as you go along. And congratulations on the engagement. Thank you. Very well done. John from Indianapolis, $46,000 paid off in 31 months, making $48,000 to $53,000. Beans and rice, baby. Count it down.

Let's hear a debt-free scream. Three, two, one. I'm debt-free scream. Three, two, one. I'm debt-free! Yeah! Yeah! Boom! I love it! Well done.

That's how you do it. Hey, you want to slip into a young lady's living room and talk to her dad about his blessing for you to marry her? You want to be that guy when you do that. This is the Dave Ramsey Show. Thank you. Our scripture today, 1 Peter 3.15, But in your hearts revere Christ as Lord. Always be prepared to give an answer to anyone who asks you for a reason for the hope that you have. But do this with gentleness and respect. Peyton Manning says the most valuable player is the one that makes the most players valuable.

Brian's with us in Sacramento. Hey, Brian, how are you? Hey, how's it going? Better than I deserve. What's up? So I've been watching your show for a couple of days, and I think you give really good advice. But I do disagree with your thoughts on credit cards and that, you know, they're just bad overall. Mm-hmm. Okay.

The biggest is, of course, we know the interest is bad on it. Mm-hmm. But you're on the premise that you'll spend more with a credit card than with cash. Now, that may be true. Mm-hmm. But that's a general statement, it's a general statistic, and it doesn't apply to everyone. So there may be someone out there who can get a credit card and pay about the same price as if they would do with cash. And then that would increase their credit score and such.

Yeah, my great-grandmother died when she was 90, and she drank bourbon and smoked cigarettes every day. And she used to say, yeah, these cigarettes are going to kill me one of these days. And cigarettes didn't kill her. They didn't kill her. She got away with it. Other stuff killed her when she was 90, And it wasn't the bourbon either. Okay?

Does that make it okay for me to sit here and say cigarettes are okay? Absolutely not. So your logic flow doesn't even make sense. How old are you? 21. 21. Okay. And, well, your logic flow is not, what you're saying is illogical.

It's like saying drunk drivers don't always kill someone, so it's okay to drive drunk. That's your logic flow. And so it just, it's not logical. It doesn't work. So here's the deal. There's been multiple pieces of research done. Not just my opinion, but multiple pieces of actual detailed in-depth research that shows that people spend more when there's a disconnect from the fact that they're spending money emotionally. For instance, when you spend cash, there's one study that was done at MIP that says when you spend cash, it activates the pain centers of the brain. You feel it. You have an ouch moment when you spend cash, it activates the pain centers of the brain. You feel it. You have an ouch moment when you spend cash.

When you spend with a debit card, it doesn't do it so much but does a little bit because you still connect that with the balance on your checking account emotionally. When you spend with a credit card, it doesn't activate it at all. And consequently, people spend more. Another example would be the basic friction on Amazon. You bought stuff on Amazon, I assume. Mm-hmm. Yeah.

Are you an Amazon Prime member? Yes. Okay. And you realize you spend more because it's easier to spend, right? Actually, I wouldn't say I even spend that much on Amazon. Okay. The only time I would spend on it is if it's cheaper there than on a store. Yeah, but you get the idea that the easier it is to buy something,

the more likely you are to spend over the course of your life. Now, an individual transaction, maybe, maybe not. Okay? I mean, I'm an Amazon Prime member. Actually, my wife is. I use her account. But so when I'm on there, I do shop around like you're talking about, and I'm a fairly responsible guy with money.

I'm a multimillionaire. The stuff I teach has worked for me. And so what the bottom line is is that behavior in the way you handle payments does affect your spending patterns over the course of your life, over the course of a year. Again, an individual transaction, maybe not. And to your point, some people are more disciplined than others. But the concept is simply this.

The credit card is the cigarette of the financial world. There's no upside to using it, only downsides. Is it going to kill everyone? No. But it kills to kill everyone? No. But it kills a bunch of people, financially speaking. So why handle snakes? Rattlesnakes don't always kill you when you pick them up, but most of them will, or there's a good chance, you know, there's a better chance you're going to get bit

if you fool with them than if you don't fool with them, that kind of thing. And so that's what it comes down to. And really what it comes down to is not studying your feelings or your opinions. It's, say, let's talk to wealthy people who have built wealth starting from nothing and ask them what they do with their payment structure. And we finished the largest study of millionaires ever done. And what we found in talking to the millionaires is they pay cash for everything. Some of them have a credit card and pay it off every month, like you're talking about. But none of them carry consumer debt of any kind ever.

They don't carry car debt. They don't carry credit card debt. They don't carry any debt of anything else. And so I appreciate your opinion, Brian, but you're just wrong. That's what it comes down to. You're just wrong. And, you know, there's no possible way that we would ever tell anyone to use a credit card because it doesn't cause them to win. It only has downside, not upside.

I'm not going to tell you to drive drunk. You might get away with it, but you might kill yourself or kill somebody else. I'm not going to tell you to smoke cigarettes. You might be my great-grandmother and die of 90 of something else, but it very likely will kill you. It's a proven thing. There's only downside. There's no upside.

And so that's it. I mean, you know, the downside is your breath stinks, and when you smoke, you smell like you licked the bottom of an ashtray. And everybody knows it. You know, your clothes smell like it and everything else. And credit card debt does the exact same thing to your financial world. It stinks it up. And you're not going to win

screwing around with these things. So, again, to your point, can an individual from time to time do that? Yes. A highly disciplined individual would be very unlikely to have major problems. But there's no upside, so why screw with the snakes?

They're cute. You want to pet them? I mean so why screw with the snakes? They're cute. You want to pet them? I mean, why screw with the snakes? There's only one possibility screwing around with rattlesnakes, get bit or not get bit. I guess there's two possibilities. Maybe you're really good with snakes. What does that prove? Nothing.

It doesn't prove anything at all. So we stay away from them, sir. And I appreciate your call. Open phones at 888-825-5225. Danielle is with us in Kansas City. Hi, Danielle. How are you? Good. Thanks for taking my call.

Sure. What's up? Well, I am currently a stay-at-home mom. And before I became a stay-at-home mom, I taught six years in the public school system here in Missouri. And so I have $45,600 sitting in my retirement system. But now that my husband and I have two kids, we are significantly interested in doing homeschooling versus me going back to public school teaching.

So with the public retirement system, either there's three options. Either I can wait until the rule of 80 of my age plus the years that I worked, which is six, for me to draw from that without a penalty. The other one is to completely take it out with a 30% interest taken out, which would leave me about $32,000. Or I can roll it over to an IRA for a 10% penalty. Ding, ding. That's the one.

Okay. Even though I plan on being a stay-at-home mom and not going back to school or even working outside the home. Right. You roll it to an IRA. And the reason you roll it to an IRA. And the reason you roll it to the IRA is when you die, you get to keep that money. Your estate does. And you can grow it faster than they will grow it.

You'll make up the 10% penalty within a year or two in the difference in what you'll make on the money versus them. And so you get with a SmartVestor Pro if you don't have a financial advisor to help you do your mutual fund investing. And we spread our investing across four types of mutual funds inside the IRA, growth, growth and income, aggressive growth, and international. And if the 10% penalty you're referring to is the early withdrawal penalty, that won't apply. Well, when I was looking on the retirement system, it said if I want to roll it over to an IRA that they accept, they would do a 10% penalty regardless of age.

That they accept? Yeah, it has to be a certain IRA that they accept for the money rolling over. And so I would have to call the retirement system and make sure that I can roll it over to a certain amount. I see. Talk to your SmartVestor Pro in your area. They will know what that is for your teaching system because they've probably done it 100 times. And, yeah, you need to roll it over into an IRA

and good growth stock mutual funds. That's what we're trying to get to. And that's where we want to take it to as quickly as we can. Hey, thanks for the call. 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 slash show.