The Ramsey Show - App - Don’t Let the Economic Bear Scare You

Episode Date: June 15, 2022

Dave Ramsey & Ken Coleman discuss: If moving up in house is a need or a want, The fear of changing jobs, Rebuilding the emergency fund, Feeling secure in your investments. Want a plan for your money? Find out where to start: https://bit.ly/3nInETX Listen to all The Ramsey Network podcasts: https://bit.ly/3GxiXm6

Live from the headquarters of Ramsey Solutions, it's the 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. We help people build wealth, do work that they love, and create amazing actual relationships. Ken Coleman, Ramsey Personality, host of The Ken Coleman Show, an expert on your career and your job. And boy, is that a subject out there today. We're here to talk to you about your life and your money. The phone number is 888-825-5225. The call is free, and some say the advice is worth exactly what you pay for it. 888-825-5225. The call is free, and some say the advice is worth exactly what you pay for it.

888-825-5225. We're going to start with Baltimore this hour. Robin is there. Hi, Robin. How are you? I'm doing well. How are you, Dave? Better than I deserve. What's up? Thank you for taking my call. My question today is my husband and I own a home and we're hoping to move soon, but we also have some debt. So we're just trying to figure out the best next steps for ourselves. Okay. Why are you moving?

We need more space. We have a two bedroom and we have an 18 month old son and we would like to try for another baby soon. So we would like to have a three-bedroom house. And I also work from home, so we do need like some type of office space or area. Okay. How much debt have you got, not counting your house? Not counting the house, I would say 70, 50 in student loans and, I'm sorry, 55 in student loans and 15 in credit cards. Okay.

And what's your household income? $95,000. Good for you. Okay. What do you guys do for a living? I am a financial analyst, and my husband works in auto manufacturing. Okay. All right.

Well, your goal of moving up in-house to have, you know, a little more room for your family is a great goal. And it's a reasonable goal. I think we can agree it is a want and not a need. Okay. I would say, like, you could get to. A need is shelter. You have shelter.

You have one baby and a two-bedroom house. Everything's okay today. But it'd be nice to move up. It'd be nice to move up. I'm not saying you can't do a one. I spend money on ones. I'm okay with that. But we need to classify it where it really is.

Now, the number one key to building wealth, the number one wealth-building tool that you have is your income. And when you send it all to sally may it's very difficult to build wealth and so uh before you buy once you get your house in order no pun intended um and uh that means you get these debts paid off and so if i'm you i'm rolling up my sleeves i'm going to work as much as I can work. I'm going to live on nothing, and I'm going to knock out these debts ASAP. And it's probably going to take you 18 months, and that's living on beans and rice. 18 months.

So you're suggesting in the house for now. Stay in the house and get out of debt before you spend money on luxuries, which is a move up in house is a luxury. Your family is not going to die if you don't move up in house. It would just be a really nice thing to get to move up in house. That means it's a luxury, not a need. Yeah, it would just be uncomfortable. And I guess a lot of things would cut expenses, but expenses, but daycare is so expensive.

We pay $1,300 a month in daycare. It's more than our monthly. Okay, your option is to move up in-house and keep the debt, and you will be stuck in the middle class the rest of your life because you're not dealing with your issues. I want you to become wealthy. Me too. When you move up in-house, you're going to move up in house payment now your budget's going to be even tighter because sally may also needs her own bedroom yeah so robin you

do make a very good point you can cut expenses so what can we do to reduce the child care cost got to look at it from 18 different angles where there there's a will, there's a way is an old phrase. And in this case, yes, $1,300 a month for child care. That's a lot. And it's more than your mortgage, you said. So I would absolutely be doing what Dave said, but finding ways to make more money and reduce cost, which means you could take that 18 months, as Dave's saying, with rice and beans. And the more income we add, the more intensity we add, the quicker you get out of this debt.

And now we can begin to think about the future. But your focus needs to be on the now. Thanks, Robin. We appreciate your call. So, guys, I talked to our staff here, our 1,200 team members, Monday morning. And we talked about it a little bit on the air the other day. But it bears repeating, Ken, that here's what i'm always going to give you i'm always going to give you the hard path on the short term because it is the easy path in the long

term i'm never going to give you the easy path in the short term because it's always the hard path in the long term easy path for her in the short term is go buy a nicer house but she's stuck in the debt her budget's even tighter she's going to struggle to be able to build wealth and find money to save and invest for her kids college and for their retirement investing and be able to get the house paid off and sally may kicked out and the other rest of that debt kicked out that's what normal people do they buy whatever they want whenever they want it like they're in congress and normal normal finances in america suck you don't want to be normal it's awful and so what you want to be is unusual you want to be weird so one of the greatest

compliments you get on the shows if i call you weird means you're being you're doing hard stuff to get an easy life long term it's always harder to work out and avoid a donut than it is to just pop donuts in your face believe me i know i have the ability to eat untold infant numbers of donuts in one setting uh and i have to curb that appetite, and it's hard. But it's easier than walking around with all the diseases of obesity. Right. Well, you know, this is a mindset. So a lot of people think of this type of rice and beans, gazelle intensity, Dave, that we teach, as a sacrifice. And I think it's worth shifting that mindset from thinking of it as a sacrifice and i think it's worth shifting that

mindset from thinking of it as a sacrifice and think of it as an investment it's a price to be paid yes i am investing in my mission to a better life that's it and you've got to invest in yourself so stop thinking of oh it's drudgery and oh we got to sacrifice and oh we got this you know okay here's if we do this this has yield long-term yield long-term impact long-term return on my investment not my sacrifice but i'm investing in me my family our future yeah like a buddy of mine there was a huge negative article written about me a buddy of mine goes like oh man i'm i'm so sorry and i said well you know it's the price of admission to get to be dave ram. I'll pay the price.

It's awesome. I don't want to be somebody else. I like me. Life's good. I got a great life. And if all that means is some idiot left-wing journalist thinks I'm a capitalist pig and correctly identified me as such, then have at it, baby. That's the price of admission to be Dave. That's right.

You know, what's the price of admission to be wealthy? What's the price of admission to be dave that's right you know what's the price of admission to be wealthy what's the price of admission to raise great kids what's the price of admission to look at your drunk friend and say you need to get off the sauce you're screwing up your life it's harder to have the conflict than it is to go along and buy him another round hard is easier than easy always turns out to be hard because you're wimping, you're mailing it in. You're not paying a price. This is The Ramsey. It's called Gazelle, and it's a digital banking experience that will help you spend and save the Ramsey way with banking

services provided by Pathword NA. You'll get a single spending account with no monthly fees and it's FDIC insured through Pathword NA. We're offering early access to our beta customers so you can help us make it the best experience it can be. Just go to ramseysolutions.com slash gazelle to sign up for the wait list today. Ken Coleman, Ramsey Personality, is my co-host today. Bailey's in Colorado Springs. Hey, Bailey, how are you? Hi, Dave.

I'm doing well. How are you? Better than I deserve. How can we help? Awesome. Thank you guys for taking my call. So my question has to do, it's job related. So back in March, I took a job as a wine and liquor sales rep.

It's 100 percent commission. And it's exactly what I've wanted to do for years now. I work for a very small company out of Denver. And so I'm selling just smaller brand names. And I've been taking your advice and trying to keep as many doors open as possible. So I have been trying to ask reps their names and so on. And I ran into what I thought was a rep last week. And he was actually a district manager filling in for a rep that had currently quit. He works for a company that I've been a bigger company that I've been told would be a very good company to work for. So my question, it's still 100% commission. I just, I'm going through the interview process and they sound like they

want me to join their team. Um, I just don't know. I really like the small company that I work for, but I also would like to help my family succeed financially. We're debt free. Um, so on the high end with this current position that I have, I'm probably making, going to make close to $50,000 if I really hustle and grind it. And then this new job, I'd probably be close to $70,000

with just commissions alone on the low end. So I'm just kind of... Yeah. So what I heard is that there's a feel, there's a comfort level with this smaller company. So let's dive deeper into this. Let's just assume, and we can't assume that you're going to get the job, okay, that they're going to offer, but it sounds good.

But let's just assume that right now we have both in front of us, all right? What is the biggest fear? There's some fear here. What is the fear about taking the new job if it was presented? What are you afraid of? I've worked for bigger companies before um i know they're more corporate i think that's what scares me is i like what i'm so with the job that i'm with right now it i like the flexibility with it which there's flexibility with this new one as well. But I like that it's almost as if

I'm running my own business and I don't, um, it just, it feels like I'm running my own business, which is something that I've really enjoyed. But what's hard is just the, the commissions, like last month was a really tough month, uh, commission wise. Cause I also had to, you know, if I'm not working, I'm not making money. And I had to take about two weeks off last month. So, Bailey, here's what I hear. Here's what I hear. You don't have a really good, clear fear to define.

And that's part of what is causing the fear is you don't really know if it's going to be that much different. Anybody who is straight commission, in all reality, does run their own business. So I don't think there's that big of a deal. So here's what I want you to do. I want you to continue to walk this out. Go through all the interviews. Let's get it all the way to the point they make the offer. I would start today beginning to ask questions where it's appropriate in the interview process

around the issue of what is it like, the autonomy, what's the hours, what's the accountability, what's the reporting process, the sales process. You don't ask it the way that I'm saying that, but you're diving into those issues because there is a comfort level with the way you sell for this current company. So get on a piece of paper, get it out of your head and write down, this is what I like about this sales position that I'm currently in. These are the characteristics. And so you ask questions that will allow you to get answers to determine, wait a second, it's a bigger company. Yes, more corporate, but it's largely the same. It's what I kill is what I eat. And I think you just dive into that. Ask about culture questions. How do we grow? What's the measurement process? What's the development process and training process? Ask lots of questions, which is normal to do in the interview process. And then

one other step. I want you to try to get connected to people that work in the company now. Now you got to be mature enough to handle that feedback. Here's what I mean. Just because I talked to one person and they say something kind of negative doesn't mean it's true. I want to talk to three to five to seven people, ideally connected to the sales type role, and we're going to get real feedback. We're going to look and see how do they treat their customers? What are their customer review? Can we get vendor reviews? This is how we find out if a culture, which means shared behaviors, is healthy. And so I want you to walk all the way through. Stop letting fear create a narrative right now. You don't know some things. Go get the answers to those things,

and then the fear of the unknown goes away, and now you're going to be able to make a good decision. Hey, why did you, you said last month sucked because you took two weeks off why'd you take two weeks off yeah um we had sick babies i got sick um so it was just like this cycle of people getting sick in our household so your kids were sick and you were sick is that what you meant yeah yeah yeah so it started off with it doesn't matter where you work if you don't work for two weeks on 100% commission, your month's going to suck. Yeah. That's irrelevant to this decision. Both places your month would suck.

Yeah. So what would you do if you were working at another position and your children were sick? Like in a regular job, you just take personal time off? You use up your vacation time? Yeah, and they offer PTO with this new job. This current one, they don't have PTO. Why does PTO matter if you're on 100% commission? You're not getting paid if you don't work, regardless of PTO.

Right. There's not paid time off. You're not getting paid if you're not selling something. Right. So, I mean, they got you on some kind of a base, or they got a draw? You know, that's a good question that I will ask the person that I've been in contact with. If you sell real estate full-time, there is no paid time off. Because you're either selling real estate or you're not.

Remember, Bailey. That's 100% commission. So, yeah, dig into this like Ken's saying, and let's find out what's really going on here. It sounds like you have a third-tier set of brands that are not the prime brands, and this bigger company's got some better brands that you can sell a lot better and sell a lot more volume of. And as long as they're not going to be all stuff shirt and make it miserable to work there with the toxic corporate crap, then it's probably the play to do. But you need to work through and prove that to yourself. That's right.

The quick lesson here just for Bailey and the rest of our listeners and viewers is this. The interview process is as much for you as it is for the company. They're being interviewed too. You have got to have some confidence to ask these questions. You can do it in a way that doesn't put the company on defensive, but you can ask really good questions that allow you to get answers. Here's what's going on. And Bailey, you're normal.

You're just like every other human being. There is, anytime we look at change, which we have to change to progress, in this case, financially and professionally, there's going to be some unknowns. The quicker we can get the knowns to those unknowns, now we have the ability to discern and make the right decision. People don't mind change if they're convinced that it is better. Right. You're driving a $1,000 car and you get to change to a $20,000 car. You love change. Right.

You know? So you just got to be convinced that the change is for the better. Change that there's a bunch of unknowns, the ambivalence will drive you bananas. Oh, yeah. Absent of an answer, our mind, Dave, starts to fill in the gap. Negative. Always negative. Yeah.

If we don't know what's going on, we automatically assume bad stuff. That's right. And so the trick is in the whole thing here, Bailey, just Ken saying gather more information. I love it in a Ramsey interview when our team that is interviewing someone that may be coming to work here uh presents so much stuff about us that someone opts out they go y'all are whacked i don't want to work there right because you weren't if they say that they weren't going to fit in they were going to be a negative culture that's correct and we would have had to fire them later

and so it's much better for them to self-select because we we almost run them off yeah uh and we're not trying and so we're being interviewed too you know when when you come into interview here you're deciding if you want to work here we're deciding if you want you to work here and so you got to look at it that way it is a two-way street and i you know i i don't need to sell you on working here but i'd i would love to sell you on not working here because if i can run you off before you get in here and cause issues because you're an idiot then that'd be a great thing for us this is the ramsey show We'll be right back. In the lobby of Ramsey Solutions on the debt-free stage, Jessica is with us. Hi, Jessica.

How are you? Hi, Dave. How are you doing? Better than I deserve. Welcome. Where do you live? I live in Bourbonet, south of Chicago. Oh, welcome to Nashville.

Thank you. And how much debt have you paid off? $121,000. Woo! How long did that take? 28 months. Look at you. Way to go, kiddo.

And your range of income during that time? $70,000 to $90,000. Cool. What do you do for a living? I'm a chemist for a pharmaceutical manufacturer. Oh, look at you. So what was the $121,000? $2,000 was my car loan, and $119,000 was student loans.

Whoa. Wow. How long have you been out of school? I graduated in 2016. Okay and so two and a half years the last two and a half years you spent knocking this out had a little bit of a gap between the time you graduate and the time you really get into gear. Tell us your story what happened. Yeah so I was almost three years into paying minimum payments on my student loans and And I was 25 years old living at my parents' house and I just got a new job. And I felt like, well, what's next? What can I do next? And can I move out? And so I didn't actually know my total debt amount at that time

because it was broken down into several federal loans and I hadn't added it up. So I did that. And in my head, I thought it was $80,000. I had to be around there, but it was actually $119,000. And just the realization that- It's the old crap moment. Yeah. Old crap. Because I knew I'd only paid down about 20 something thousand on the principal in almost three years. And so I'm just praying to God, like, can you please give me contentment to survive the next seven years?

Because I don't know how I'm going to do this. And so actually one day I was talking about it and my aunt, she said to me, well, why don't you pay it off? I said, how do you know? There's an option. Who thought that? was yeah confused so i said you don't make a dent in six figures of debt and she said i know you you could do it just listen to this radio show and it'll click for you and you'll do it i know you i'm not i don't even need to explain it to you wow Wow, that's a compliment. So I left it just at that. I've got some nieces that are that way.

Yeah, this one right here could do that. Yeah. She apparently knew me better than I knew myself. She had more confidence in you than you had in yourself. That's the answer. That's right. So one day I had a long drive, and I just decided out of curiosity to turn it on. And there was a debt-free scream, a girl near my age as well, also single and similar numbers as me.

Oh, there it is. I felt like God just showed me my story play out before it played out. And I was so inspired by it. I just knew that my prayer for contentment was not about to be answered. But I was happy about it. Well, it was just answered, and the answer was no. Right. We're going to make you very discontent until you get this straightened up.

Exactly. I love it. Dave, I've got to tell this. This is great. You asked for contentment. Yes. And you got conviction. I did.

That's what you got. I like that. And asked for contentment. Yes. And you got conviction. I did. That's what you got. I like that. And then it's like, oh, watch out. Yeah. Because he knows her too. There you go. I like it. Just like aunt knows her.

Yeah, that's good. Good. Look at you. Okay. So you tore into it like a wildfire. I did. I did. I picked up some side hustles.

I tutored high school students in chemistry. What's that pay? It pays what I want it to pay. Yes, because I was going to say as a parent, it's whatever she says. Yeah. Because you're like, help my kid with chemistry. Yeah, so what do you charge, really? What is it?

How much is it? $80? It's been going up. $280 an hour, $80 an hour, $50 an hour? I actually just do like $30 to $35, and I feel like I've been growing into that and increasing it. But sometimes that constant meeting helps if they can just throw a couple dollars at it. So I've been kind of figuring that out. That's awesome. You enjoy coaching them?

I absolutely do, and I didn't realize how much I would enjoy it, but I started it before even the pandemics was around. Oh, then you became real popular. Yes. There were more students than I could even take on, and I wanted to take them on. Good for you. I was so happy to be able to help students through the e-learning struggle

and to make an impact. You're amazing. Thank you. That's so cool. $ to make an impact. You're amazing. Thank you. That's so cool. $35 a freaking hour. I love it. And going up from here. Oh, man.

And knock out $121,000 in two and a half years. Yeah. Two years and four months, no less. Yeah. Right. My goal was to make it by age 30, but I just turned 28 right before I paid it off. So you beat your goal by two years. Yep, this is how it goes down right here.

I love it. Amazing. All right, now that you did it, you're an expert. What do you tell people the key to getting out of debt is? The budget is everything. It's important, but it's also the most freeing part of the journey because you get to set your pace yourself. You get to decide, am I going to buy this or am I going to buy this or how much of each thing or how much am I going to throw towards the debt? So it's all in your hands and it's really empowering. I felt when I started budgeting, that was my first step.

I've also gotten creative with saving money and trying to buy anything I can used. My favorite blouse is like $6 from Goodwill. Ah, look at you. All right. So did you stay home or did you move out? I ended up staying home. And when I paid my last payment on one paycheck, I actually put down a security deposit on a townhouse of my own on the next paycheck. So I was freed up to, you know, do what I wanted, live where I wanted.

Okay. So tremendous lesson here. Tremendous lesson. I'm going to throw it back to you to keep teaching because I thought you just dropped a masterclass in something. Our, you know, our colleague, Rachel Cruz, talks about the budget. Give you permission to spend. You said it empowered you in this journey because you got to set your own pace. That has to be tremendously liberating to say, all right, because you went from telling your aunt, there's no way I can make a dent in six figures of debt,

and now you're telling us that the budgeting part of what we teach empowered you to set a pace that you felt like you could get and ended up going beyond that. I want you to unpack that a little bit more. How did it empower you? Because I would go back to that number and I had my debt snowball, you know, and all written out. And I said, okay, well, this is the latest I'll pay it off. And I knew that if my, if I allowed my spending budget to be outside of that or something to splurge on that, that meant, okay, am I, am I comfortable with pushing it to the next month? And I often said no for that reason. And I felt inside that I was choosing what I wanted to choose.

Because you were. Because I was. You were in control of the choice. Yeah, exactly. And this is where people happen to money instead of money happening to them. And that's why people say the budget, the budget, the budget. And it's exactly why. It's because you're taking control and you're the boss of the money.

And a lot of people spend their whole life where the money is the boss of them. Right instead you're going okay i have a choice and it's my choice and i get to do what i want to do and really the way you're saying it and even your body language is i got no guilt about either way but in this case i choose to not do this thing so i can get this other debt knocked out right and two years early she comes in debt free way to go you're amazing you are an absolute warrior princess you're amazing absolute rock star very cool we got a copy of baby steps millionaires for you that's the next chapter in your story for sure you're going to be a millionaire before we know it and also a copy of totem when he make over you can give that to someone that you believe in that doesn't believe in themselves yet yeah i like that

and a financial peace university one year subscription you can go through and join ramsey plus and go through financial peace university get the every dollar uh extended version of the app and man ab enhanced all good stuff all free we want to say thank you you did a great job and what a great great story you're an amazing young woman thank you dave thank you ken i'm so happy to be here jessica from chicago 121 000 paid off in 28 months making 70 to 90 count it down let's hear a debt-free scream three two one i'm debt free. Yeah, baby. Yeah.

This is the Ramsey Show. We'll be right back. One thing about humans being around humans, we regulate to each other. You find a group of people that are inspired, you get in the midst of them, you get inspired. That's what happens at, like, your favorite sports team when they're actually winning and stuff. We all get fired up, right? And that's what happens at Smart Conference. When you get, like, 8,000 people in one arena and they want to be smarter you leave well smarter because ken coleman spoke and george camel and rachel cruz and christina ellis and dr john deloney and me and my friends craig and amy groeschel pastors at life church are coming they're going to be speaking on marriage so marriage money mental health uh career we're going to have it all covered anything about your life we're going to be speaking on marriage so marriage money mental health uh career we're

going to have it all covered anything about your life we're going to talk about saturday october the 22nd in dallas uh it's been three years since we've gotten to do one of these wow it'll be about 8 000 people there it's about a quarter sold out already if you want tickets they're only 39 get a great price on that that's an incredible price for a full-day event. You will leave exhausted and inspired. I promise you. RamseySolutions.com slash events. Also check out the Wealth Building events.

We're doing four cities in the fall, and you can get tickets to those as well. They are almost sold out, all of them. And people are particularly concerned these days about how to build wealth in the middle of a tornado. And it's still possible. It's still even probable. Ken Coleman, Ramsey Personality, is my co-host today. Paul is with us. Paul's in Cincinnati. Hey, Paul, how are you? I'm doing well. How are you? Better than I deserve. How can I help?

Yeah, so about a month or so ago, I moved across to a different state for a new job. Ended up wiping out my small emergency fund for that. I'm slowly building it back up. And in the middle of that process, I expect it will take about a year to do that. And then within that, I realized I might need a new car within two years or so and i'm terrified of going into debt again good for that i'm glad hopefully you won't hopefully you'll be terrified enough to not do it so what do you make at the new job um it's 60 000 so where's it all going shouldn't take you a year to build an emergency fund

i'm say i'm only saving about uh 250 why paycheck where's it all going um different things just you know i'm still adjusting to new cost of living uh my paycheck is only about not only only, it's about $1,600 every two weeks. Yeah, it's pretty much, I've just... Have you got health insurance coming out of your check? I do. How much? About 60 or 70, I believe. Have you got retirement coming out of your paycheck yes it's about three and a half stop it okay you need to save an emergency fund for your safe for retirement i also think you have too much taxes coming out of your check

because if you're making 60 that's five thousand dollars a year you're only getting home with 3200 your taxes are not that high and you didn't give me a you didn't give me a health insurance number that was big enough to call that cause that so you still probably have too much being withheld paul what do you do for a living i'm in uh journalism okay uh we are in one of the hottest side job economies that we've ever seen before. I really think the way to juice this is if you've got the time, even if it's five hours, 10 hours, 15 hours a week, deliver. Do whatever you've got to do. Freelance, right? Freelance. Do something to make that emergency fund. You can earn that emergency fund very quickly in this job economy yeah not not a year three months yeah and then set yourself a goal on the car and say all right i need ten thousand dollars that's a thousand dollars a month for ten months i gotta do this or whatever the goal is i just made that up and then divide it out over how fast you're gonna do it or i need

twelve thousand dollars and i'm gonna do it over two years that's 500 bucks a month i don't care but you got to lay out the goal and then get to it. Because here's what's killing you. The unknown, because you're not working a systematized process, the unknown is scaring the P. Wadden out of you. That's what's terrifying you, not the debt. And so lay this out very succinctly, very detailed, and then just start executing on those numbers.

And you bust your butt and you keep your dadgum spending down, you probably ought to get with your tax person or just calculate your taxes for the year and see if you're having too much withheld. I think you probably got a considerable too much. I bet you're holding $5,000 a year too much out. That's my guess, $400 a month. But I could be wrong.

We'll see. You run the numbers out and find out. Malcolm is with us. Malcolm is in Springfield, Missouri. Hey, Malcolm, how are you? I'm great. What an honor. I'm a little nervous, so I hope I don't blow this.

You're not going to blow it. We're here for you, bro. How can we help you? Okay, Dave. I am 65 years old. I have been pretty frugal, my wife and I, all of our lives. Never took big vacations or anything and tried to save. I'm at a point where a year and a half from now or into next year, I'll be at full Social Security retirement age. starting to worry now we've i've got 401k and other retirements uh everything i've got is a total of about 1.2 million now that sounds oh my god uh you know you're you're you're a blessed guy and i truly am blessed however we know a million dollars isn't what it was 10 years ago

very true frankly frankly i'm. I'm scared about retiring. What do you mean? What's your household income now? It has averaged about $250,000 over the last several years. Way to go. Congratulations. You've had a great career. Yes.

Okay, so if you retire and you have only Social Security coming in, you're going to start to draw the income at least off of this, but that's not going to produce $250,000 a year. And we don't need it. So what do you need? Can you live on $100,000? Yes. Okay. What are the mutual funds invested in?

Well, there's just usually an investment company, and you know and i i can't tell you off the top of my head exactly you need to know you need to know that's what's part of what's scaring you you don't know what's going on right you need to get with your guy on the phone today and say i'm scared you need to explain to me what my money's invested in and you need to be in good growth stock mutual funds with long track records and then ask the goob what your track record is on your mutual funds. And let's say you're in a series of mutual funds properly invested, and that the last 30 years the track record has been 11% on the portfolio that you hold. That would be a reasonably invested set of mutual funds.

Okay? Okay. 11% of a million dollars is 110 000 okay but within the climate that we're in now it's down 20 since the first of the year the big bad bears out right but that's not the point the point is over the next 20 years unless the american economy collapses which i am not predicting and i hope you're not if you are you needed to quit watching the news um that's the other thing about fear that means you're watching too much news turn the news off but the uh uh but because their job is to make

you terrified so you keep more fear porn but the uh um anyway the the uh, over a period of time, you're going to make an average of 11 or 12%. That's a 70, 80-year track record on the stock market. Okay? So let's say you pull $100,000 off, but this year it didn't make $100,000. So you dip down into the principal sum. Next year you pull $100,000 off, but it made $150,000. So you only pulled $100,000 off. That other $ that other 50 goes back in to replenish the down year you follow me as long as it averages less than as long as you're taking out less than it's averaging the up and down dipping into the

principal and back out it'll backfill itself over time does that mathematically make sense to you it does but and i know that's historically accurate but have we ever been in this kind of in oh we've been a lot worse we've been a lot worse oh absolutely been a lot worse than this a lot worse i'm not sure we've had any dumber people in washington that's about the dumbest group up there i've ever seen but other than that um i mean they're dumber than a rock the whole it's the Island of Misfit Toys up there. But other than that, the actual economy? Oh, good Lord.

Go back to 1982, man. You're 65. I'm 61. Don't you remember that crap under Carter? Oh, my God. Gas lines. Don't you remember interest rates 18%? I mean, that was a lot worse.

This is a walk in a freaking park. Average bear market is only 13 months. Average time to recover from a bear market is only 27 months. So a bear is, you know, don't let the bear scare you. He's the opportunity to buy cheap shares. This is the Ramsey Show. Hey, folks, Ken Coleman here. Did you know The Ramsey Show is one of the most popular podcasts in the world? Get your daily dose of advice on life and money. Check out all of our shows from The Ramsey Network wherever you listen to podcasts.