The Ramsey Show - App - Don't Have Too Much Money Tied Up in Things With Wheels (Hour 1)

Episode Date: September 4, 2019

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Starting this hour off is Autumn in Colorado. Hi, Autumn. Welcome to the Dave Ramsey Show. Hi, Dave. How are you? Better than I deserve. What's up? So I currently do Uber, and so I don't have anywhere that I could put my money

that I know of, um, save it for like social security or like a 401 account. Um, I have about $68,000 of debt. It's more student loan, uh, car payment and a debt consolidation loan. Um, so I'm just, I don't know where to start. Like I I've been saving up some money so that I could pay off my car payment. I give them an extra $500 a month. And my student loan, it's in forbearance right now, so I need to take it out so I can start making payments. But I don't know how to save for my future besides just putting it in the bank. Okay.

I wouldn't save for your future right now. I would put it all on the debts. Let's list your debts, smallest to largest. Pay minimum payments on everything but the smallest debt. And every dollar you can squeeze out of your budget, any money that you have, free, we're going to throw at that smallest debt. So you have student loan and car and what else? Debt consolidation. How much is a student loan?

$23,000. $23,000. How much do you owe on your car? $27,000. Okay. And what's your debt consolidation loan? $17,000. Okay, cool.

And what's your household income? Well, I don't know. So I bring in about $3,800 a month tax-free. Okay, that would be like $48,000 roughly before taxes are taken out. Yes. Okay. So why in the world are you driving a $27,000 car? I don't know. I don't know.

I don't know. That's a good question. It's an awfully expensive car for no more money than you make. It is. And so it's dragging you down. Well, at the time, I was working a better job at the time, but I got laid off. Oh, okay. What were you doing?

I worked for Kaiser Permanente. I was a claim processor. And how much did you make doing that? Close to 60 a year. Okay, so the Uber is a stopgap till you land a more permanent gig? Yes. It's not like your long-term career goal? No, absolutely not. Okay. And so how's the job hunt coming? Well, I'm in the process of moving from one state to another, so I haven't really even looked for another job because I don't know how long I'm going to be in Colorado. Oh, okay.

So when are you moving? Probably not for another six months. Why? It's just more, it's cheaper to live somewhere else. No, why are you waiting six months? You don't have a job. You're waiting, you've got your life on hold until you move. Why not just go ahead and move? My lease is up.

My lease is up in six months. Oh, you've got to finish the lease out. Okay. Yes. Why don't you talk to the landlord about under what circumstances you might be able to let you out? Yes. Ask. I'd pay three times the rent.

I'm sorry? I would pay three times the rent to break the lease. That's what the landlord said or the lease says? Yes, the apartment. Okay. what the landlord said or the lease says? Yes, the apartment. Okay. Is the apartment full by chance? I don't know. Why don't you stop by the manager's office and ask them?

I know my lease says it's three times the rent. I can stay the whole six months, but I'd like to be let out. Is there anything I can do to just be let out? Because they might be able to rent the apartment for more than you're paying if they're full, and they might just let you go. If you do that, get it in writing, of course. If not, you're going to stay six months, and then we're going to work on your income because your car does not fit your current income.

You've got to get your income up or this car needs to go. But you can hang on for six months. It's just you've got an awful lot tied up in vehicles that go down in value and you're putting miles on it running uber on it yes so um stop and go miles tough miles they're not road miles so um you know that that's what we're looking at okay so we're going to list our debts smallest to largest i would leave the student loans in forbearance for now and i would just attack the 17 000 consolidation loan because you may or may not be keeping this car i don't know but let's just attack it as hard as you can go at it and let's see how fast we could get it

paid off if you put two thousand dollars a month on it that'd be a lot but you'd be done in like eight months yeah if you put a thousand dollars you'd be done in like eight months. Yeah. If you put $1,000, you'd be done in 17 months. That's not enough. We need to do more than that. So you need to set some goals doing that, and right now, I don't want you investing until you get your debts cleared off, because when you don't have any payments but your rent and your food and that kind of stuff, you'll be able to save and invest a whole lot more efficiently.

Hey, thanks for calling in. All right, Andrew is with us in California. Hi, Andrew. Welcome to the Dave Ramsey Show. Hey, Dave. How are you doing? Better than I deserve. What's up?

So I need a little reassurance. I got a motorcycle that I'm about 99% sure I need to sell, but I got a pretty big attachment with it and trying to work through that. Oh, you just love the motorcycle. Oh, yeah. What is it? 2006 Street Glide.

Oh, okay. And so what's this worth? I've got a bunch of work done. Yeah. What's it worth? Well, with the extra work, probably closer to 10, but the market's only really calling for 7. Okay.

And what do you owe on it? I don't owe anything on it, but I have a credit card, personal loan, and one other, I guess, credit card, you can say. Okay. How much does all that total up? About $35,000. $1,000? Yes. Okay.

And what do you make a year? Currently, I'm on track to make about $60,000 this year before taxes. Okay. All right. And what's your car worth? The vehicle, my actual daily driver, that was a gift. What's it worth? Right now, probably about $32,000.

Someone gave you a $32,000 car? Yes. That's nice. Oh, yeah. Can't complain about that. Gee, when did you get this gift? So, long story short, I got it back in 2015 and lost a job, and my dad was very nice and helped me out and paid off the rest of it for me.

Oh, you bought the car, and then he paid it off? Originally, yeah. So I put about two years into it, and then he decided he was just going to. Well, if you're making $60,000 a year, a $32,000 car and a $10,000 motorcycle do not make sense. You have too much tied up in things with wheels because they both go down in value. If I were in your shoes, I'd probably keep the motorcycle and sell the car and write a check and pay off my debt. I'd just about knock out your debt. And then, you know, go get you a $5,000 car and keep the motorcycle.

That's what I would do. I mean, you're a single guy. What's the big deal? And the car is not a car that fits your life. You don't make enough money to be driving a $32,000 car. This is the Dave Ramsey Show. Business leaders, if you're not using LinkedIn jobs, you're missing out. Our Ramsey Solutions Company page on LinkedIn has over 100,000 followers.

That's 100,000 potential like-minded people our team communicates our current openings to. We also post our jobs on LinkedIn because we know the best candidates already have jobs. And LinkedIn makes it easy by doing the legwork for you. It's no wonder a hire is made every eight seconds on LinkedIn. And over 600 million members visit LinkedIn to make connections, learn, and grow as professionals and discover new job opportunities. Get started today with LinkedIn Jobs and get $50 off your first job post. Visit linkedin.com slash Ramsey. Terms and conditions apply. I am an old redneck hillbilly guy.

I love cars. I love cars with big engines and loud mufflers and trucks with big tires. I love vehicles. I've got all kinds of cars and vehicles in my life, wonderful ski boats and sea dues and all kinds of other stuff with motors in it. I like motors. I like stuff like that. I get it. You do too. We spend too much on this stuff and sometimes it gets us into real trouble. Our last two callers both had a car problem. They had both overpurchased on their car. $27,000 car with a $48,000 income, a $32,000 car and a $10,000 motorcycle. That's $52,000 tied up in vehicles with a $60,000 income.

You will not prosper when the total of stuff you have with motors and wheels is over, the value is over half your annual income. Because everything with a stinking motor in it, as much as I love it, goes down in value. They go down in value. They're not an investment. I invested in a car. Then you are a stupid butt investor. Because your investment is going to go down in value.

Why would you invest in something that goes down in value? You consume a car. And that's fine. I don't mind you having a nice car. I just don't want your nice car to have you. So the average vehicle loses 70% of its value in the first four years you own it. So when you buy a new car and you drive it off the lot, when you hear that sound and you go into the street, go across the curb and it goes, blump, blump, that was a $10,000

sound you just heard. Blump, blump. You just lost 10 grand. And you better be able to absorb the blow. The average car sale in America right now is about 30 grand, and they be able to absorb the blow the average car sale in america right now is about 30 grand and they're going to lose 20 000 of that 30 in four years you're going to turn 30 000 into 10 000 and scratch your head and wonder why your kid's college funded and funded you're going to turn 30 000 into 10 000 and scratch your head and wonder why you stay in debt your whole life

you're going to turn 30 000 into 10 head and wonder why you stay in debt your whole life. You're going to turn $30,000 into $10,000 and wonder why you're freaking broke. Well, that's why. Because you bought stuff with wheels and motors and it all goes down in value. I am not against you having a nice car. I don't drive junk cars now. But I used to drive garbage. I used to drive stuff that make a hoopty look good because I drove like no one else so I could get some money.

And once I got some money, then I can drive like no one else. So here's a plan. Drive something that only you care about because it gets you from here to there and quit trying to be sexy based on your car oh my god how dumb are you you know that that is not going to make you sexy a vehicle doesn't do it for you baby i'm sorry so you're not cool based on your car you're just stupid me too i've done it too i've bought all of it i know what it looks like so drive like no one so you're not cool based on your car. You're just stupid. Me too. I've done it too.

I've bought all of it. I know what it looks like, so drive like no one else so that later you can drive like no one else, and a good rule of thumb is to not have a total of vehicles that equal more than half your annual income because you're going to struggle. You're going to stump your toe. You're going to stumble. It's going to be hard because you're going to struggle you're going to stump your toe you're going to stumble

it's going to be hard because you're you're losing more money than you're making is what it amounts to and it just mathematically causes you to walk with a limp it mathematically does not allow you to sprint to be all that you can be right it doesn It doesn't do that. So, you know, you make $40,000 a year, you don't need $20,000 worth of cars. Maximum of about $10,000 worth. Get you a couple $5,000 cars, get your income up, get yourself out of debt, get your net worth up, and when you're an everyday millionaire, then go buy you a new car. But you don't need to be buying a new car, brand new car,

until you're a millionaire because you can't afford to take the a new car until brand new car until you're a millionaire because you can't afford to take the hit you're just gonna lose your butt on these things now i buy new cars but i'm a multi-millionaire so i can afford to take the loss and so i'm i'm i'm driving stuff that i used to dream about driving some man someday you You know those dreams you have? Well, I'm driving that now. But it's like 30 years into this deal. So shut up. You know? When we went broke, a guy loaned me a 1978 Cadillac with 400,000 actual miles on it.

The predominant color on this thing was Bondo. It was a Bondo buggy. It wasn't even a certified hoopty.. It was a Bondo buggy. It wasn't even a certified hoopty. It was just a Bondo buggy. Had a vinyl roof on the top of it, and when you drove it, it filled up with air. It looked like a parachute on top. This was white trash vehicle right here. And I'm driving this white trash hillbilly vehicle.

I'd been driving a Jaguar before that. That I sold two days before it got repoed because i was going bankrupt this is how stupid i was so you hadn't done anything stupid that i hadn't done but i'm driving hooptieville i drove that car for 10 years one three month period felt like 10 years during that three months but i'll tell you what i years during that three months. But I'll tell you what I did during that three months. I saved up $1,000 and bought a car, gave my buddy his nice loaner back, and, man, a $1,000 car was a sizable upgrade from that 78 Cadillac. Because it just, I mean, it had to be one of the ugliest vehicles. I drove it over in the nice end of town, and the cops started following me, profiling me. It's like, that car is not supposed to be in this end of town, and the cops started following me, profiling me.

It's like, that car is not supposed to be in this end of town. You know? That's how bad this car was. So don't talk to me about, you have to have an airbag. Yeah, well, you know, just put your mother-in-law over there. That'll work. I mean, come on. Seriously.

Golly. I mean, it's not safe. Oh, brother. Give me a break. I mean, you're talking to a guy that grew up. We slept in the back window of the car when I was growing up. They would slam on the brakes, and we'd land on the floorboard. My generation, my parents' generation thought seatbelts trapped you in the car and would kill you in the wreck.

No one wore a seatbelt in those days. Now, I'm not saying that's smart. I'm not trying to get a bunch of you killed. But we have become a bunch of wusses in this country, and we overreact and overdramatize everything in order to rationalize a purchase that we can't afford the car if you can't, A, pay cash for it, and B, if the total of all your vehicles equals more than half your annual income, and that includes your $9,000 lawnmower by John Deere, which also goes down in value like a rock. You just bought the Bentley of lawnmowers, and so you're asking for it. Now, I don't mind you getting a John Deere.

I don't mind you getting a Bentley, but you pay cash for it, less than half your annual income, and it's not brand new unless you have a net worth of a million dollars. This is not something that matters to me. I'm not going to be driving your car. I don't care what you do i'm teaching you the math that works for you to become wealthy and it doesn't include conspicuous consumption with four wheels conspicuous consumption is i buy stuff so that other people think good of me. I want you to see me.

That's why I bought that first Jaguar. I thought it made me look cool. It didn't. It didn't. I was no more cool in that Jaguar than I was in that $400 Hooptyville. Bondo buggy. I was still just Dave. And you're still going to be just you, no matter what you put the key in and turn.

It doesn't make you a good mommy. It doesn't make you a good husband. It doesn't make you a good whatever. It doesn't make you an eligible bachelor. If you're so stupid that you would date a boy or a girl based on the car they drive, you're not marriage material who wants to have someone has a relationship that's that shallow i'm not going out with a guy that doesn't have a nice car well you're a princess i need to stay

away from i'm just saying so seriously this is the stuff that goes on the culture every day out there and it's the messages that play in our brains that have caused this country to be the wealthiest country that the world has ever known, and yet most people, while making a pile of money, have absolutely none. Buying crap you can't afford with money you don't have to impress people you don't even really like. You've got to stop it. This is the Dave Ramsey Show. Let's talk about low interest rates, baby. I know right now that Churchill Mortgage can get qualified buyers into a 15-year conventional loan for well under 4% with no discount points or no hidden fees. Listen, if you're even thinking about buying a home or refinancing, do it right now.

These rates are incredibly low. Here's what I'd like you to do. Take 10 minutes and call Churchill Mortgage and see what you can qualify for. So even if you have to get creative and buy something further out of the city to get something you can afford, now's the time to make the move. That's why I'm sending you to Churchill Mortgage. I trust them to look out for you and your budget. Don't miss this opportunity. You can secure these low rates now for up to 90 days through Churchill Mortgage. Call 888-LOAN-200. This is a paid advertisement. NMLS ID 1591. NMLSconsumeraccess.org. Equal housing lender. 761 Old Hickory Boulevard, Brentwood, Tennessee 37027. David is in Texas.

Welcome to the Dave Ramsey Show, David. Hi, Dave. Thank you. I'm doing great. Thank you for taking my call. Sure. I'm 20 years old right now. I don't have any debt right now. I'm currently working a full-time job, making about $24,000 a year.

I need some advice whether I should go back to school. I don't really have any career in plan right now, if I should go back to school or should I try to find something else, like another job that I guess like at my income, I guess. Okay. Well, it's just what I would do is spend some time just thinking about, gosh, when I'm 30 years old, what would I be doing that made me smile that I could make good money at? You know, and don't just do it for the money. Do it for the smile and take the money.

So, you know, you do need to think about what it is, you know, and so if you're 50 years old, you need a fresh set of eyes on your life. If you're 20 years old, you need a fresh set of eyes on your life. If you're 20 years old, you need a fresh set of eyes on your life. And that means you ask yourself, you know, those questions like, what do I want to be when I grow up? You know, and you can ask yourself that at 60. You can ask yourself that at 20. What do I want to be in this next phase of my life? So in the next decade, what are you systematically going to become that causes you to smile allows you to make money

and then once you know what that is then that tells you oh i probably need to get a degree to do that thing or i don't need to get a degree to do that thing i don't know what you want to do yet and just wandering off to school because i don't have a plan is not a good plan. Okay. Now, since that's the thing, like, I enjoy to do everything. Like, I love to learn, but I don't really have a specific passion like that to something that I really like to do. So I guess, like, I mean, your advice is, like, to just keep working until, like, I something that i really like to do so i guess like i mean your advice is like to just keep working until like i figured it out or yeah yeah and not spend some more time figuring it out i mean like are you a people person are you a detail person are you good with

your hands uh are you artistic are you a math guy you know you've got some natural tendencies some natural strengths and talents that would lead you in the directions of certain kinds of careers for instance if you hate details you should not go into accounting right okay you see what i'm saying you should not be an engineer we don't want to drive across a bridge that a guy that hates details designed and so you know you need to you need those are very detailed type people that love to do that kind of work every day. And, you know, if you get, are you an introvert or an extrovert? And all that means is do you get energy from being around people or does it drain you?

I get energy from being around people. I'm more energized from having been around people so by definition i'm an extrovert my wife however loves people but she needs her her sharing time to recharge so she is a natural introvert doesn't mean she doesn't have people skills it doesn't mean she don't like people sometimes people think introvert means shy it doesn't mean that at all it's just where you get your power from where you get your energy from and you start assessing some things along those lines and it can lead you to some decisions but no i wouldn't tell you to just blindly work for five years let's have a plan to develop and figure out who who it is you want to

be and what naturally fits with your natural giftings, your background, where you are. I'll send you a copy of Ken Coleman's book. It's called The Proximity Principle. And it's a great book about it's the proven strategy that will lead you to the career you love. And one of the things he talks about there in the book is to find what he calls your sweet spot. And your sweet spot is the intersection of your talents and your passions and uh and you do have passions and you do have talents you maybe hadn't thought about

them you maybe hadn't worked it through in your brain but they're there holly is with us and holly is in uh canada hey holly how are you yes Oh, my gosh. I'm so excited to speak to you. Well, you too. Yeah, I've been watching you for a decade. I'm actually from Montreal, Canada. Cool. So I have a question. So I've been on, I'm on baby step number two, and I'm so passionate about it.

You know, my boyfriend thinks I'm crazy. People often give me the weird eye. And one of the things that I keep saying or telling people is that what you say, the shortest pathway to wealth is having no debt, having no payments. Yep. And, you know, what the Bible says, that the borrower is a slave to the lender. Yes, ma'am. And then I always get stumped by this one question.

It's been asked to me a few times over the past weeks and months is, then why do the wealthy people borrow money then? They don't. Because they have multi-billionaire. They don't. Multi-billion dollar. They don't. No, they don't.

That's mythology. The research project that we did for the Everyday Millionaire book that Chris Hogan did, it was the number one bestseller. When we interviewed millionaires, not people with with theories who is what you're talking to you're talking to broke people with theories okay i don't give a crap what a fat person says about losing weight all right i don't care what broke people say about having money about their view of the rich is just ridiculous because they don't even know what it means so So when we talk to 10,000 millionaires, the number of them that became wealthy by using borrowed money was almost zero. And the number of them that borrowed money to do all kinds of other things,

like buy cars or go to college or go on vacation, was zero. Out of 10,000 of them, they all, up in the 90 percentile, like 93 percent said, we don't use consumer debt for anything. The only time we've ever borrowed money is to buy a house, and we paid that off as quick as we could. And so this idea that, you know, the rich use other people's money to get rich, the rich get richer, the poor get poorer. Yeah, they do.

The rich do get richer and the poor do get poorer. And there's several reasons for that. One of the main reasons is you keep doing the same stuff that brought you there and you get to stay there, whether you're rich or whether you're poor. You know, if you keep eating a set of food that makes you skinny, you will you keep doing if you keep eating a set of food that makes you skinny you will be skinny if you keep eating a set of food that makes you obese you will be obese and if you keep doing the stuff that made you rich you will be rich if you keep doing the stuff that made you poor and make you poor and it wasn't borrowing money that's there's

no data points out there to back up that urban legend that mythology that broke people all seem to believe that rich people have an edge, rich people have privilege, rich people had this excess. Nope. 79% of them inherited zero, and another 10% inherited not enough to become a millionaire. In other words, they got $5,000 from their grandmother after they were already a millionaire. So they didn't technically get get an inheritance but 93 percent of america's millionaires started from nothing they look just like you just like me they were yankees they were southern hillbillies they were black they were white they were men they were women that they overcame whatever their life obstacle was and they saved money and stayed out of debt.

And so, but Holly, you really can't debate stupid people. So just quit trying. I mean, people that want to go, yeah, well, the rich all borrow money. I don't have, I don't even have discussions with these people. They're too dumb to talk to. You know, I don't hang out with people. I'm not going to spend time. I'm not going to spend my life's energy trying to convert someone that's just dumb. And believes a bunch of urban legends about stuff.

If you want to pose, if you want to position yourself as a victim, you don't get to be Holly's friend anymore. If you want to put position yourself as a victor, you'll holly's friend and my friend and we'll help you be a victor so decide are you going to be a victor are you going to be a victim and you know when you start saying that stuff like well rich people all borrow money that's all because you wanted to buy crap that you didn't have the money for that's all that was and you're just trying to figure out a way to make it look smart when you're doing something dumb. And, Holly, that's who you're dealing with is people that are doing that kind of thing. So you keep doing what you know to be smart, and you're not going to convert stupid people.

I've been doing it for 30 years. I can't convert stupid people. I can't do it. Now, smart people who want to learn something, I can show them how, and I'll help you do whatever. I'll be on your team. I'll be your biggest cheerleader. This is the Dave Ramsey Show. Corey is in Virginia. Hey, Corey, welcome to The Dave Ramsey Show.

Hey, thank you so much for taking my call. Sure, what's up? Okay, I just started listening about a month ago, so forgive me here, but I bought a new truck last year. I was debt-free before the purchase. I owe about $40,000 still, and I have about $25,000 in pre-tax 401K. That's my vested balance, and I'm currently contributing maximum amounts to a Roth. I switched over. I'm wondering if I should use next year to roll that traditional 401k over to a Roth

and not contribute any out of my paychecks and pay the truck off as fast as possible. What's your household income? I make about $110,000. Oh, good for you. Okay. Thank you. No, I would not do it in that order. I see what you're doing, and your thinking is on the right track.

I just would do it in a different order. My first order of business is just get the truck paid off. Stop all investing immediately. All investing? Yes, all of it. Okay. Even if there's a match, everything. Get on a budget and quit spending money and put it all on the stupid truck and pay off the stupid truck like in a year.

Yeah, that's kind of what I'm planning to do here. Like incredible focused intensity for a year. Are you single? Understood. Yes, sir. sir ah that makes it even easier because all you got to do is just look in the mirror and go no you don't have to convince anybody else you just got a guy the guy in the mirror he's your only problem and i agree and he's your solution which is the good news you make good money you just made a stupid move with the truck and it puts you out of the investing business for one year while you get the truck paid off.

Have you got any money saved that is not in your retirement accounts? Just my Step 1. Okay, so you already got Baby Steps going, which is Baby Step 1 is $1,000. Okay, so now we're on the every dollar budget. We're going to make every dollar behave. We're going to stop all investing temporarily, hammer truck be done in one year then let's reopen the equation finish the emergency fund start baby step four which is 15 of your income going into retirement i would not convert your traditional to a roth until your house is paid off

okay because i want to use all your money in the meantime 15 going into retirement you'll get there and it just let it sit there and grow it's not going anywhere um and it's going to create a little bit more taxes because that growth is all going to be taxable but it's not going to be the end of the world you'll get there pretty quick because you're making really good money and you now have a newfound uh plan true yeah my thinking was i could convert it and still hit my maximum contribution next year yeah but i wouldn't fool with it i would just i would say 15 of your income going into retirement when you get to your baby step four you don't have kids college so we're on to the house do you own a home uh no not currently okay if you're gonna save up and buy a house

we're gonna do it you know and baby steps three post baby step three somewhere in there if you're going to delay buying a home for three or four more years and you want to go after you are putting 15 of your income into retirement if at that point you want to go ahead and flip it you can because that basically makes you at baby step seven until you buy a house. Right. So, because maybe steps four, five, six. I'm sorry. Sorry. That's okay. Converting that, that will count towards my yearly contribution, right?

No, it does not. It doesn't affect your contribution at all. But it does create taxes. Sure. And you don't need a tax bill right now. You got a $40,000 truck bill. Right. Okay.

And that's what I'm saying. I want to get the truck knocked out, get the emergency fund in place, start saving for retirement before I create an extra tax bill that I don't have to create. All right. But it is advantageous to make that swap when you can get to it, but do it in that right order. Good question, man. Thanks for calling in.

All right. Nick is with us nick is in ohio hi nick welcome to the dave ramsey show hey thanks for taking my call sure man what's up hey question for my wife and i are 34 and 35 and we are based up seven awesome recently received a forty thousand dollar inheritance from my grandparents passed away wow they did a lot they did a lot of traveling and we want to use it as a travel investment for us so we would be able to utilize whatever the game was on the year. We would use that for traveling.

Cool. Is there an investment product we can use to invest in it, or does it make sense to do that, or just kind of take that $40,000 and just work it down, or we want to try to keep that nest egg if at all possible. Yeah, that's pretty cool. I like idea and congratulations man you're killing it what's your house worth uh about 250 000 wow and you're 35 years old and you're already on completely debt free and investing yes sir about six hundred thousand dollars and um and as a as a um network so you're almost you're almost everyday millionaires already.

It is thanks to you. Wow. I didn't give you any money. You did it, man. Way to go. No, you gave us the way. I'm proud of you. All right.

Yeah, I like your idea. I would just use an S&P 500 fund that's no commission, no load. And the reason is it's low turnover ratio means that there won't be any taxes on it except when you pull money out of it. And if you leave it in there at least a year before you pull money out of it, then you would have only capital gains tax on whatever you pull out. Okay? Now, you won't have any tax on the $40,000, the $40,000.

But let's say that thing goes up $5,000 one year and you don't have any tax on the 40 000 the 40 000 but but let's say that thing goes up 5 000 bucks one year and you don't pull the money out when you do get around to pulling it out if you've left it in there at least a year the gains then you will have you will not pay ordinary income on it you'll only pay 15 tax okay and so and it should grow you know 10 12 a year that's what the you know the stock market has done. Some years it'll do better. Some years it'll do worse. But if you can make $4,000 or $5,000 on that thing, that's a trip a year, right?

Yeah, exactly. And if it only makes $2,000, we'll use a $2,000 trip for it. $5,000, we'll use a $5,000 trip to try to maintain that. Or if it goes down that year, you stay home. Exactly right. Or you pay for your trip out of your other fund, but you don't mess with this thing. Yes, exactly right. I love this plan.

Yeah. That's cool. That's a perpetual trip fund. I like it. Yeah, a good way to honor their legacy. They're smiling when you do it because they like to travel. I like it. Very cool.

Yeah, just an S&P 500. Somebody like Fidelity or Vanguard. Vanguard's got one that's excellent. But they all should be very, very similar. Have very low turnover ratio. Have very low fees. And no commissions. There are no loads.

And so they're perfect for something like this because, again, it sets it up to where if you leave the gain alone for a year, then it is going to be taxed at only 15%, which is sweet. I like it. Yeah, you're running around acting like rich people. Look at you. I love it. You are. That's awesome. I'm proud of you.

So those of you people say, rich people are evil so that 35 year old guy who paid off his house and has saved six hundred thousand dollars in his 401k and is improperly investing a forty thousand dollar inheritance in order to go travel off of the income only that the inheritance makes he's evil what's wrong with you? You think that guy's evil? Rich people are all evil. They all rip somebody off. He didn't rip anybody off.

He just planted corn and corn grew. He just did what he's supposed to do. And some of you have the audacity to walk around in your socialist victim mentalities and say that guy's evil, all rich people are evil. You ought to be ashamed of yourself. You ought to be ashamed of yourself. Dave, you're shaming me. Yes, I am. You ought to be ashamed of yourself.

It's a ridiculous sentiment. Eleven million millionaires in North America. Ten million of them are first-generation rich. They're that guy. When you call rich people evil, what you're really saying is, I'm jealous. What you're really saying is, I'm a small-minded bozo. That's what you're really saying. Because you feel trapped, and you feel the inability to control your own self,

and so you have to drag other people down. Because you're out of control oh there's a different way of looking at things who is this crazy hillbilly well it's called the dave ramsey show and 17 million of you tune in every day and we appreciate you every single one of you well most of you this is is the Dave Ramsey Show. Hey guys, it's Blake Thompson, Senior Executive Producer for the Dave Ramsey Show. This hour's over, but you can find more great content on our

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