The Ramsey Show - App - Don't Sign Up for Stupid, Even if It Worked Once! (Hour 1)

Episode Date: November 11, 2020

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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 am Dave Ramsey, your host, Anthony O'Neill. Ramsey personality is my co-host today. Open phones at triple eight eight two five five two two five for those of you that have served or are serving happy veterans day to you thank you thank you thank you for what you do because of you we are uh around here at ramsey we are under no illusion that we have our freedoms because you people exist so thank you and uh those of you that

know a veteran tell them i said thanks and anthony said thanks absolutely your dad is a marine right both of them yeah my uh stepfather's a marine and my biological father is a army okay yeah i missed the part i missed the army part okay i remember the marine but yeah yep yep yep my father served in camp pennington and my biological father served Fort Bragg. Cool. Yeah. And our debt-free screams today will be from veterans. Man, I can't wait.

Pretty cool. This is amazing. Pretty cool. Open phones at 888-825-5225 as we talk about your life and your money. You jump in. Anthony and I are here to help you with wherever you are. Aiden is with us in Nova Scotia. Hi, Aiden.

How are you? Good. How are you, Dave? Better than I deserve, sir. What's up? Love it. So here's kind of a breakdown of me. I'm 24.

I make 50K a year. I'm debt-free on Step 4 emergency fund and about 10,000 invested so far. So the situation is my mother has lived like no one else so that she can give like no one else. And fortunately for me, this means she's offered $25,000 towards my first home purchase. The thing is, before finding this out, I had a goal to buy my first house in cash about 10 years from now. So obviously now I'm reconsidering my goal to buy in cash um so really what's the best option here am i still am i missing out on building wealth by delaying that purchase and just having 25k sitting there in the bank for five to ten years

or should i bite the bullet now with uh about a 30 down payment. Wow. These are such problems to have, sir. I mean, yeah. You are in such good shape, man. Oh, well done. I'm truly blessed. Let me clarify. From mom, this is a gift. It is not a loan.

Yeah. Absolutely. Okay. And she's not controlling and isn't going to come over and question how you keep the house after she gave you $25,000? No. I love my mom, and I hug her every day for it. I wasn't questioning whether you loved her. I was asking you if she was controlling.

Okay, she's not. Is your mom requiring you to take the $25,000 and buy a house today, or can you stack that from when you went to buy one cash? No, it doesn't have to be today, but I guess I'm worried that i'm missing out on interest that i could accumulate in five to ten years yeah you you know if she if she gave you the money now you invested it or if you if she gave you the money now and you bought a house on a 15-year fixed where the payment's no more than a fourth of your take-home pay and you knock that out

neither one of these are in the dumb column not at all they're both within the range of quote approved ramsey behaviors yes unquote uh meaning common freaking sense so uh yeah you you you're not gonna get over in the dumb column with any of this it's just a matter of how you feel about it the thing i'm hearing is is you had a goal and this changes maybe how you want to do the goal in your mind, and you're kind of struggling with that a little bit. Did I hear that? Exactly. Yeah. Well, it's not wrong to take the money, put it in a mutual fund,

and go and play your goal. Right. Okay? You're 24. Probably in two or three years you're going to pay cash for a house, right? That's the goal, yeah. Yeah. And so that is not a bad plan.

Not at all. That is an excellent plan. I mean, if I'm talking to a 27-year-old with a paid-for house, and part of the paid-for was mom gave him $25,000 three years ago, and he invested that, I'm calling everybody in this picture smart. Absolutely. But if you go ahead and buy today, you were born and raised in Nova Scotia. You have your career in Nova Scotia?

That's right. Okay. What do you do for a living? Digital marketing. Good for you. Okay. Good money. Now, how much of a house would you buy, Aiden?

Let's say, for an example, you went and bought something right now. How much would that house cost you? Well, I've considered two options here. So an income property, which would cost about 400, maybe even 500,000 versus, you know, something cheaper in the, in the neck of 250. Yeah. I like the neck of 250. If you were to do that, cause the 400 takes you above. But I'm with Dave. Like if you take that money, you park it and you can be 27 years old and go pay cash for it. That's the option I am leaning more towards. But if you do go buy something today, I'm saying you need to stay north of $250,000 because honestly, you can pay that off within the next three to five years. Yeah, the income producing property

is a secondary issue. That's another step. Right. Let's get you into a house and get it paid off, and then let's talk about income producing. Yes. Okay, so I agree with Anthony on that. So here's an idea. Listen to this. What if you said, I'm going to stay with my plan to pay cash. I'm going to take Mom's 25. I'm going to put it in a mutual fund. Yep. At any point in the next few years, even if you didn't have enough, you could change your mind and put down a big honking down payment.

Yep. So there's nothing lost with continuing along your process. You still have the right to change your mind, and every day that you wait to change your mind, you're going to have more to put down, even if you didn't go all the way to 100% down later. Totally. Yeah, so that way the decision's not in concrete.

I'm going to start with that. Absolutely. And revisit it January of every year when I'm setting my goals for the year. Yeah. Do I want to keep on this plan, or do I want to pull that money out and buy a house? I'll just work hard, Dave, over the next two years and then see where I'm at. Yeah, well, every year see how much progress you got. You go, man, it's right there.

I'm going to go one more year. I'm going to do this. Yes. Or you might go, hey, I'm getting married. I'm buying a house. Yes. You know, different things could change here. But this way, you're not locked in and give yourself permission to revisit the decision every January.

Yeah. And just get started. I like that one the best because it's not. The other one, if you buy the house now. You're locked in. You did it. Yep. It's done.

Yep. And, you know, then all this other stuff happens. How often do we meet 24-year-olds thinking like this, though, Dave? More and more because you are out there talking to them. I like you, Dave. I was hoping you would give me some love in that area. Well, I'm telling you, Anthony O'Neal and YouTube are the two things that have brought the 19-year-olds to the Ramsey stuff. Hey, man.

Because I'm a serious boomer, and I don't even have dad jokes anymore. Now I got grandpa jokes. I'm down to Papa Dave jokes now. It's really bad. So I got to have something that connects. Definitely not my focus group anymore, but I love – I'm with you, man. And here's the other thing. Now, definitely not my focus group anymore, but I love—I'm with you, man. And, you know, here's the other thing.

You and I get to speak to, on the radio, in our podcasts, in live events, in book signing lines, sharp, young, 23, 24, 22, 19-year-olds all the time. All the time. And I'll tell you what that does. It gives me great hope in a nation where some of you people have lost your minds. Oh, man. Unbelievable. But it gives me great hope that there are Aidens out there in the world, and there's a lot of them. A lot of them.

More than you would think. Yes. Good news. We're going to be okay. That was the first call of the day. This is going to be a great day. It's going to be okay. This is The Dave Ramsey Show. you've worked hard to make your business successful blood sweat tears and prayers

because as a business owner you are the secret. And your company is only as strong as you are. So what happens if a key ingredient is missing? And what if that ingredient is your health, resulting in expensive medical bills? Christian Healthcare Ministries, or CHM, presents health cost sharing. It's different from insurance in that Christians help other Christians to meet their medical expenses. Various programs are available depending on your needs and budget. As a Better Business Bureau accredited charity, CHM has helped its members successfully share over $5 billion in each other's medical bills for nearly 40 years. Various programs are

available depending on your needs and budget. Learn how CHM has served small business owners just like you by visiting chministries.org slash budget. chministries.org slash budget. That's chministries.org slash budget. Anthony O'Neill is our Ramsey personality, is our co-host. Kind of falling asleep there with that bump music. I was just kind of, I thought I'd take a little nap there right after lunch. Open phones at 888-825-5225. It's the Smooth Jazz Station.

Oh, yes, it is. That's what we're doing. Our producer, James, is very good. Yeah, he's the Smooth Jazz Station. Oh, yes it is. Our producer James is very good. He's grooving in there. You guys seemed a little rowdy. I was trying to calm you down. Oh, he says we were too rowdy. Okay. There's that, Anthony. It's always you.

Mike is in Orange County. Hey, Mike, welcome to the Dave Ramsey Show. Good afternoon, Dave. It's a pleasure to speak to you both. You too. What's up? Okay, so I'm sort of in a semi-malformed baby step 3B, and I'd love to get your advice. At the start of 2020, I decided to purchase my very first home. I was previously trying really hard to save up to 20%, but I felt like with interest rates being really low, plus with the Southern California real estate market appreciation,

every year that I was sort of delaying was putting me further and further behind. So I took a $15,000 loan from my 401k in order to help boost the down payment. But the intention there was to rent out the extra room to a friend where the net profit after a year was going to be $15,000. So I could completely pay off the loan in a single year. The experiment went well. My friend is interested in in a single year. The experiment went well. My friend is interested in staying for another year. So my question to you is, should I take the cash

now and pay back the 401k loan? Or since the 401k loan interest is being paid back to me, and he's going to stay for another year, should I take the $15,000 and put it towards the equity in the home so that the next time I refinance or re-amateurize, I'm closer, if not beyond 20%, and can drop PMI. Yeah, well, that would depend on whether you're going to follow our plan or yours. Right. I've been an advocate follower of your plan. I think this is the one point that I deviated. And then you're wanting to deviate more. Yeah. Why would you say more? Well, I would never tell you to borrow on your 401K to pay down your home so that you could get rid of PMI.

Yeah. I wasn't going to borrow more. No. Effectively, by not paying off the loan with the money and putting it on the house, it's the same thing. Oh, I see. Okay. So pay off the loan. Yeah, pay off the loan. Okay.

And then work to pay down your principal, and then you'll have to get an appraisal and reset and get your PMI gone that way later. And Dave, I want to call this out too because I want the listeners to hear this. We do not, that's not how we do things. We do not rob from our future. And I know this guy said, hey, it worked okay. But we hear stories how it didn't work. Yeah. Most of the time it doesn't.

Exactly. And I want America to hear it's like, we don't want you to rob from your future. It's kind of like, you know, if you put one round in the chamber and you have five empty rounds and you point it at your head and it didn't go off. Right. Does that make it smart? Heck no. You you know it's still freaking russian roulette it worked this time you know it's like yeah that's great it doesn't mean i'm gonna pull the trigger again so uh you know this is the that's kind of a violent bloody idea but still i was just about to say that i was like man that was a tough example dave well i mean the point is you know the thing is this i have done lots of stupid things that worked and the only downside of that is is it made me think it worked yes an example is uh

we were 22 years old and are 23 years old and we went on our very first cruise right we had never seen anything like that that was luxury we're we're country people from tennessee we got on that boat and they were like you know they were had swordfish and they had all this stuff and i mean the place was like a palace yeah yeah and my wife bless her heart what happened walks by this evil thing called a slot machine i'm just gonna try this i think this will be fun and i said what about losing money is fun i don't understand how's it fun to lose money she drops a quarter in and of course you know what happened she pulled the one-armed bandit the stinking thing goes off like a christmas tree man quarters are going everywhere

woman won like three hundred dollars in quarters you know what that cost me about three thousand about seven hundred more we didn't have three thousand i was. I was 22. Oh. She put the whole $300 back in over the trip plus another $500 looking for another $300 because stupid worked once. Yes. Yes. Yeah. And that's the thing about doing stupid. Just because it works once doesn't mean you sign up for it again.

I've done it. I've done it half my life. Me too. And I'm just going, look, just because you jumped off the building and you didn't break your leg because you landed in a pile of leaves doesn't mean jumping off of buildings is smart. Right. But I've done it. Right.

I've done it half my life, and I had to quit. I had to quit. I had to go, okay, there are principles. The law of gravity is a principle. Yes. Borrowing money and borrowing on your 401K is never a good idea. Let's reiterate why you don't borrow on your 401k. Number one, you unplug a good mutual fund.

Yes, you do. That would have been making 10%, 12% in order to pay yourself back 5% or 6%. And somehow that seems smart. I never figured that out. I'm getting the money. You're getting the money the other way, dummy. Yep. You know?

And so I don't get it. The other thing is when you leave the company, and you will leave the company when you die you get fired or you get a better job yes you will be leaving this company yeah not if when it's a stable job yeah pandemic breath right i got that so yeah when you leave your company you will that that loan is considered an early withdrawal and if you do not repay it in 60 days it is taxed at your tax rate plus a 10 penalty you're going to get hit in the mouth with a 40 i got you told you not to do this penalty so that 10 000 cost you maybe 16 000 yeah exactly yeah yeah somewhere in there and so so you're just asking for trouble. Yes.

Now, sometimes you can ask for trouble, and trouble doesn't come. Come on. And, man, I'll tell you, the reason I'm so passionate about this is I can look in the mirror and go, I'm a doofus. I have done almost every one of these things. I never had a 401K, or I would have borrowed on it. But, you know, just because you got it, just, you know. The worst thing happened to me when i was

buying real estate for nothing down the banks give me 100 loans because i was buying it and fixing it up the worst thing that happened to me was i made really good money and flipped those houses easily on the first 10 houses yeah so then i look up at 24 years old 25 years old with three million dollars in debt on on rental properties doing flips and a bank gets sold to another bank and calls our loans. The worst thing that happened to me was the first ones worked. If I had lost my butt on the first one, the whole story would not have occurred. Yes. But instead, I'm like sharing.

This will be fun. And I put the thing in the slot machine, you know. And there you go. Ding, ding, ding, ding, ding, ding, ding, ding. ding oh let's do this again robert kiyosaki must be right let's go deeply in debt with nothing down you know oh my god i'm gonna sign up for grant cardone i don't think so you know no i'm not gonna do that i love robert i love grant they're both great guys actually and robert's a friend of mine but philosophies. But we don't agree on those subjects, is all. Because I had a different experience, and a man with an experience is not at the mercy of a man with an opinion.

And I'm right there with you. I had the same experience, Dave. Not the same, but in the same area. Same ideas. So this is why we're picking on you, Mike, because we love you, man. We love you, and we love to pick on you. You caught into the Dave Ramsey show. Well, I mean, that's it.

The thing is, just because you got – I mean, what if the roommate had been the roommate from hell and hadn't paid him the money? We'd have never gotten this call because he wouldn't want to extend it. Yep. Wouldn't want to keep doing it. He wouldn't want – oh, I violated a principle, and I got caught. And I think – Well, if you put the quarter in there and go, let's have a fun and it just keeps your quarter. It's not fun.

And I think for me, Dave, I just I'm scared to play with my future. I'm depending on that 401k. I'm depending on a Roth IRA. I'm depending on that to protect my 60, 70, 80 year old self. So I just I don't want to play with it right now. If that means I have to move a little bit slower into getting to where I need to get to today so that my future has a solid future, I am okay with that. You know, you're right. There is a, I was out at the farm with my grandson the other day and he was a little bitty guy with his daddy and we were shooting.

Okay. The first time the little guy shot a gun. Yeah. I want to teach him to be afraid of guns yes they're dangerous yes yes i don't want to teach him to be so afraid of it that he can't shoot one yes but i want him to have a healthy respect for this explosion that's going off in your hand that's so good dave you've got to have a healthy respect and you got to have a healthy respect for these principles.

Yeah. Because it'll go off, man. Yeah. And when people don't have respect for it, that's when they get hurt. Come on. This is the Dave Ramsey personality is my co-host today here on the air. Open phones at 888-825-5225. 888-825-5225.

Alejandro and Brenda are with us in Pensacola, Florida, to do a debt-free scream. And I assume you are there serving? Yes, sir. We are in the Air Force. I'm in the Air Force. I suspected with it being Pensacola. Thank you for your service. How much debt have you guys paid off?

Sir, we paid off $369,000 with $735. Did you say $369,000? Yes, sir. $369,735. Wow! Goodness. All right. How long did this take?

Five years, nine months. Ah, okay. That makes a little more sense. And what's your household income range during that five years and nine months? Well, we started out at $108,000 and finished up at $152,000. Wow. Good for you. Now, you're in the military.

Does your wife work outside the home? Yes, I'm in the Air Force. And I work for an insurance company. Great. Very cool. Okay, I'm going to guess and say with this huge amount of money that that includes paying off your house. Yes. Touchdown!

Woo-hoo! Wow. Talking to weird people. How old are you two? 32. We're both 32. are you kidding me wow that so rocks i'm so proud of y'all oh yeah thank you freaking amazing oh yeah okay it's been a long time but you know it we did it well in the scope of life five years nine months isn't spit you have

a paid for house i mean you're impressive so me, how did all this start five years and nine months ago? Oh, I went, I walked into the lunchroom at work, and I heard a group of girls talking about you, and I was like, man, I'm going to look him up. I want to know what he's all about. And then I did that while working, and then I went home to my husband. I was like, hey, I have an idea. And then I just told him.

He looked it up, and he's like, all right, let's do it. I'm going to jump on board with you. Wow. Just like that. Yeah. I mean, of course, I was a little bit skeptical. So I just looked it up and, you know, everything sounded really well. The total money makeover was great. And we just we got going right away. We just Here's the thing, Dave. We don't want to end up, you know, God bless our parents, but they're both in their 60s, 70s, living paycheck to paycheck, and they still have a mortgage. We just want to change our family tree. We just want to be weird, you know. We want to change our family tree, and to us,

this is the true definition of the American dream. Amen. Okay, I'm looking at your name. I'm hearing a little bit of an accent. What is your heritage? Yeah, so I was born in Colombia, and my wife was born in Miami. Her parents are from Argentina. Okay.

Okay, cool. That's exciting. So when you say the American dream, it means something. Absolutely. That's pretty impressive. And here you are serving in the Air Force. This is very very cool very cool yes sir so what are you doing the air force uh i'm a pilot what do you fly i uh fly uh special operations airplane translation i ain't gonna tell you all right okay cool i was just thinking that that was a little bit too private right there

that's awesome, man. Well, thank you, thank you, thank you, thank you. Alejandro and Brenda, I have a question. So you all started this journey at 27 years old. I'm curious, what were your other peers thinking about you all? In your 20s, you all are saying, you know, we want to attack this debt. We want to pay off our mortgage. What were your peers on board?

Were they looking at you like you're crazy? You're young. Enjoy your life. What was that atmosphere for you all? Yeah, of course. So you have a little bit of both situations going. You know, some of them are very skeptical. Some of them are like, oh, yeah, go for it. But I think I think most of them, they don't really see it until you're actually, you know, going through it, and especially right now. Yeah, you got to pay for a house. Yeah. So right now we have quite a few friends that are on board,

but, you know, going through the process, not everybody catches up. You know, they don't catch on that, hey, this is possible. Yeah. Well, that's amazing, dude. Very, very well done. I'm so proud of you guys. Who are your biggest cheerleaders? I would say my friend Jason.

I have John and George, all three of them great friends. And I would say they kept us motivated. And so I'm pretty sure we're being motivational to them as well. So how about your parents and so forth? After they see what you guys have done, did it inspire them to do anything? Well, it's kind of helped them a little, but for them it's harder because they don't see it. They don't see that this is possible for them

because they're already older. Both of our fathers are retired. Our moms are the only ones working. So we're trying to make them get on a strict budget and stuff. But it's been a little bit hard. Sure. But then I feel like our siblings are also like realizing that this is worth a try. And, you know, I feel like they're almost on board, not 100%, but I like I tell them

almost doesn't count. Oh. That's crazy. Wow. Yeah, I think they say that in the special ops, don't they, Alejandro? That's true. That's right. Almost is not going to work.

Yeah. So you guys have a paid-for home. You're 100% debt-free. I got to ask, what's next for this young couple? Oh, I was going to tell Dave and you, Anthony, we're going to be calling back in a few years for the Millionaire Theme Hour. Come on. Woo-hoo.

Yeah. Make sure I'm not on the show. Let's bring Chris Hogan on that show so we can turn it on. You guys are heroes. If it's a Millionaire Theme Hour, it'll be on the day Chris is on probably since that's kind of his stuff. Yeah. Man, way to go, you guys.

Well, we're going to send you a copy of Chris's book, Everyday Millionaires, because that is the next chapter, for sure, in your story. You guys are rock stars. You are absolute heroes. We're so proud of you. And, again, thank you for your service. Alejandro and Brenda, $369,000 paid off in five years and nine months, making $108,152. That includes a paid-for home at 32 years old. Shut up.

Count it down. Let's hear a debt-free scream. Three, two, one, we're debt-free! Woo-hoo! Yeah! That is awesome. Man, oh, man, oh, man. Thank you, Lord.

Good stuff. Very well done. Mark is with us. Mark is in Dallas, Texas. Hey, Mark, how can we help? Hey, Dave. Hey, Anthony. Okay.

So I'm currently working full-time, but by the end of the year, I am more than likely going to be leaving my full-time status, and with that, my full-time health benefits. Now, I already know that I can go on to my wife's insurance. That will cost us an extra $600 per month, give or take. I was just wondering if you think I should do that, look into the open insurance market, or look at a different option? Well, that's really your two options is go to DaveRamsey.com and click on ELP for health insurance, talk to one of the brokers and have them shop around and get you the best deal as an individual policy and compare that to what it will cost additionally and compare

the coverages for if you were added to your wife's policy. I will give you a guess, but I would do the research because if all the facts are in front of you and all the options are in front of you, the answer will bark at you. Yeah. Right? Yeah. You go, pick me, pick me. Right?

And so that's what you're talking that's what happens if you gather up good amounts of information when you're making any major decisions so i mean if you had if you had an option it's 900 and an option is 700 and hers is 600 and hers has more coverage it's kind of like a no duh right yeah right and so that's what's going to happen something like that is going to land on your plate i'm going to guess i'm still going to do the exercise but i'm going to guess if i'm in your shoes that adding to her policy is probably going to be your most coverage for the least money yeah all right but go to the elp and shop it to be sure i could be wrong have you ever seen something otherwise dave to yeah yeah it has okay

600 is a lot it is to add to your spouse's policy i was just about and if he's 24 we didn't ask his age and he's got zero health problems he's not overweight um you know obesity is huge on health insurance and uh not smoking yes right not jumping out of perfectly good airplanes that kind of stuff right then uh all that kind of stuff then know, he could get a policy for $400. You know, with maybe a $5,000 deductible HSA plan or something. It's possible, depending on the state, depending on what's going on. But, you know, we don't know his health statistics to run a number right here. So just run it with the ELPs.

They'll shop around. They'll help you get the best deal. This is the Dave Ramsey Personality, is my co-host today here on the air. Open phones at 888-825-5225. That's 888-825-5225. Jesse is with us in Oklahoma City. Hi, Jesse. How are you?

I'm doing good. How about you? Better than I deserve. What's up? So my wife and I were both veterans. I'm 25 and she's 27. We work for the government now. Um, and our, our net pay after taxes and everything is about 12,000 a month. And then 4,400 of it, uh,

is guaranteed for the rest of our lives. And I just, I mean, I'm just not sure like, should I pay the house off and then stay here, or is it okay for me to want to buy a bigger house once this one is paid off? I just don't know what to do. If I should pay this off and then invest or... Well, well done to start with. You're making really good money.

You're in good shape. What's your house worth? It's $200,000. in really good money you're in good shape what's your house worth uh it's 200 000 and okay see that's a pretty good house yeah yeah it's not bad yeah okay and there's not no is there anything wrong with wanting to move up absolutely not so what do you want to do what do you want to do i mean i would really like a bigger house. We don't have any kids or anything, but, you know, we kind of imagine our place being the one where everyone comes to and, you know, celebrates the holidays or whatever. So, I mean, that's kind of like our dream is to get a big house.

Justin, when you say a big house, how much is that? What are you talking about? Maybe like $800 or $000 for the next one. That's a huge jump. I guess. It is. I don't know if I would go from a $200,000 to a $900,000 house right now. I'm not saying you can never get there.

I'm talking about i would maybe go from a 200 to maybe a four or five hundred uh max house uh but i'm not saying and correct me if i'm wrong day but i'm not saying you can't never get there i'm just saying baby stepping your way up there because i'm pretty sure you're 24 if you're making twelve thousand dollars now uh your income should be going up and so as your income goes, then you can even go up a little bit more into housing. But right now, if you're looking to move up, I would say move up, get you a bigger house. But that's like going from a 2,000 square feet

to a 8,000 square feet when you're talking about $900,000 in Oklahoma. Yeah. Again, to reiterate, you've done a really, really good job. The fact that you're asking the question makes you in the smart column. So that's all really good. We teach a thing called the baby steps. You probably have heard it where you have an emergency fund in place

and you're out of debt before we have any of these discussions. Are you there? We're not there yet. I kind of have a four-year plan between now and that next house if we do buy it. Because I wanted to save up at least, you know, 30% of whatever the next house is. So that was kind of the other part to my question is should I do that by paying the house? Well, the first thing you need to do is get out of debt except the house. Yeah.

Before we even have a discussion. The second thing is you make sure you have an emergency fund of three to six months of expenses right then you start putting 15 of your income into retirement then you start saying i'm going to build some additional side wealth to have a bigger down payment on a house to go with the house i've got here when you purchase that which is like six years from now probably if you do all of those things. Then when you purchase that, it needs to be where the payment is no more than a fourth of your take-home pay on a 15-year fixed. As long as you're in that range, I'm okay.

The thing you need to keep in the back of your head that you really need to be working for is not just a bigger house but a paid-for house because all the data we have on millionaires, there are two main components to their wealth when they hit the first one to five million dollars in net worth component number one is a paid for house and on average they do it in 10 to 11 years yeah some of one group we studied was 11.2 the ramsey group that we studied did it in 10.2 they did a little bit faster but still right in that range you get the house paid off and then you pile money in the 401k, the 403b, the Roth IRAs, and that's the other segment that causes you to become

wealthy. If you continually are reaching too far past and you stay house poor, you limit your ability to ever get the house paid off, and you limit your ability to put money in the 401k, so you're going to stunt your growth towards becoming a millionaire. So that's what you want to gauge and keep in a healthy tension there. But the answer is, yes, you can get a bigger house. Let's just do it gradually and do it in the right order and at the right timing so you don't stunt your own growth. Absolutely.

And then also, too, I want to challenge you, Jesse, as well, to step back and look at it. If you're making $12,000 net, I think you can get out of debt actually before four years. I don't know how much debt you have. Yeah, depending on how much debt you have. But, you know, with that kind of income, sounding like you're a smart man, I'm pretty sure I would think you're not extremely up there. So attack that with a solid plan so that way you can get into your house maybe within the next three to four years, not just four. Absolutely. And we're going to help you with this. I want you to go through Ramsey Plus. I'm going to give you a one-year membership to Ramsey Plus just to say on Veterans Today to say thank you

for serving. And so I want you to go through that. That includes everything you need to know about money, Financial Peace University. It puts you into the EveryDollar Premium app. It puts you into the Baby Steps Tracker app. It puts you into the EveryDollar Premium app. It puts you into the Baby Steps Tracker app. It puts you into the groups where you've got the support. It gives you access to coaches and counselors to get your questions answered. And it's all digital. And those of you wanting to buy something for Christmas for somebody, this is an easy way to do it. There's no shipping needed, right? And so Ramsey Plus, the all-access membership, it is the best thing we do around here.

It is. And I'm going to give it to you as a gift just to say thank you for serving. So hold on. Kelly will pick up. And the rest of you, if you want to do a free trial or you want to buy it as a Christmas gift, go to DaveRamsey.com slash store or slash FPU, either one, and you can get signed up for either a free trial or it'll help you purchase the gift for a family member or friend

for a year's worth of Ramsey Plus, the premium version of every dollar, Financial Peace University, Legacy Journey, a bunch of Rachel's content, a bunch of Hogan's content, all kinds of stuff in there available to you. Oh, and while you're at DaveRamsey.com, the rest of you need to remember we're giving away $500 a week between now and Christmas. Sign up for the free giveaway, and there is no purchase necessary to do that. Kevin's in Great Falls, Virginia. Hi, Kevin.

Welcome to the Dave Ramsey Show. Thank you, Dave and Anthony, for taking my call. Just to give you a little background, I'll be 62 at the end of the month. My wife is 60. Happy birthday. Happy early birthday. I'm sorry, can you hear me now? Yes, happy early birthday. Oh, thank you. Thank you. I'll be moving to a new job soon where I'll be getting about a 21k increase and trying to decide whether or not to bump up the retirement account or to pay down the mortgage. How much is the mortgage and how much is in retirement? I have about $880 in

retirement. The mortgage is $282. Bump up the mortgage. Yep. No questions asked. You're already a millionaire. Yep. Get the mortgage knocked down. Okay. So just press on with that then, I guess. Press on. I always put 15% of your income, regardless of what it is, into retirement, and every other dollar you can find in your budget, finish that mortgage. Yes. Here's the thing. You have done an incredible job.

I mean, your net worth is very likely with the equity in your home over a million dollars. Yes. You got 880 alone in your 401K. Yeah. Okay, so all I got to do is scratch up 120 somewhere to get you there. So you're there. All right. And the thing that you, because you're such a saver and you've been so wise and so diligent over a long period of time,

otherwise you wouldn't have this freaking money. Right so i know this about you but the thing that you don't realize is what's going to happen when you pay off that mortgage there's going to be like this snap inside your heart you're almost going to hear it audibly and you're going to go dad come i can breathe i can breathe free! Yes, yes. You know, and you're only $288,000 away from that, and I can smell a $200,000 income in this story, especially with the $21,000 increase. So just lean in on that, baby.

Put 15% in there. Let's knock that mortgage out as soon as possible. And you're going to, you mark my words, you're going to say, Ramsey was right. You're going to have a physical, spiritual spiritual emotional experience when you pay that mortgage off yeah it's gonna blow your freaking mind this is the dave ramsey show Have a friend or family member that needs a daily dose of Ramsey advice in their life? Let them know about the Ramsey Call of the Day podcast. It's a quick hit of advice about life and money

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