The Ramsey Show - App - Don't Touch That Pension . . . Let that Money Grow! (Hour 2)

Episode Date: June 26, 2019

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Live from the headquarters of Ramsey Solutions, broadcasting from the Dollar Car Rental Studio, this is the Dave Ramsey Show, where America hangs out to have a conversation about your life and your money. Sitting in for Dave, I'm Chris Hogan, and I'm excited to be here with you this hour to be able to take your questions, take your issues, whatever it is you want to talk about that deals with your life and your money, we are here for you. But I need you to call us. That number to call is 888-825-5225. Again, that's 888-825-5225.

Or feel free to look us up on social media at Ramsey Show. So I'm excited to have you, America. I'm excited to dig into the things that are on your mind where I'm going to give you some straight answers on your questions. And so I'm going to jump you, America. I'm excited to dig into the things that are on your mind, where I'm going to give you some straight answers on your questions. And so I'm going to jump to the phone lines. I've got Stuart on the line in Kansas City, Missouri. Stuart, how are you? Doing wonderful. How are you doing today?

Oh, I'm focused and not finished, my friend. How can I help you today? Well, Chris, I tell you, what I've got going on here is I currently have a job, but it is a union job where work comes solely based off of seniority and not work performance. And whenever I can work, it does pay quite well. But the problem is I'm so low in seniority that with business coming and going, you know, I might be working two days a week, come back to two days a week, which isn't making a whole lot of money. Oh, wow. And I recently got a job offer from a company that I did work for about four and a half years ago. But the downside to that is it is going to be like an $18,000 pay cut from whenever I am working full-time at the job I'm at now. But it does come with the peace of mind of having it's a Monday through Friday regular hours where the job I'm at now does not.

Well, Stuart, but here's the thing. You're not full-time on the job now. Right, yeah. And actually, I just got called yesterday. I got called back full-time. It was kind of a whenever good news comes, it comes because I got that job offer at the other company. And then a couple hours later, I got called back telling me I was going to full-time again. Okay.

So with this, though, but again, you say it's based on seniority, so you may get work a couple days a week? Well, right now I'll be working full-time, but depending on how business goes, it could be for a week, it could be for a month, it could be for a year and a half. Okay. What line of work are you in? I'm actually in the railroad. I work the railroad.

Okay. And so looking at this, how long have you been doing this job where it's hit or miss like this? Well, actually, I finished training last November, and I've been back and forth like this since then. Okay. And so what are you doing? You just got a good savings account? You just... Well, thankfully, my wife has got us following Dave's plan pretty well.

So we are debt free except for the house. We've got a $24,000 emergency fund. And with what I have been making, working at the railroad, we've been able to get by. We haven't been able to really beef up emergency fund or outside of what they automatically take out of my check. Haven't been able to put away for retirement. I got you. How old are you all? I am 33, and my wife is 32.

Okay. Do you all have kids? We have one child. Okay. All right. And so looking at this, you're looking for something that's going to have a little bit more stability, right? Right.

Okay. And so now it's the juxtaposition of the two things. What you're doing right now isn't real steady for you, but it pays better than what you could have that's a little bit more steady. I think based on kind of where you are, I'm going to look at this and sit down with my wife and really start to talk this through. How long will you have to be on this job before you move up the seniority ladder to be able to have a little bit more stability with the work? Well, from what I've been told, most people say five years. But what some of the guys have been talking with here recently with what's going on currently with the company, they're talking maybe closer to 10. OK. And so with this other job, you're saying there's an $18,000 pay differential?

That's correct. Okay. Listen to me, Stuart. I'm looking at this and I'm going to either A, look for another opportunity that's in there with other companies out there, but I don't think it's fair for you to be in limbo for five years waiting for the seniority side to be able to kick in. You know, the bottom line is, is time is money. And you guys are looking to kind of grow forward and build forward on the baby steps.

So I'm going to go with something a little bit more stable and that I can rely on. But then at the same time, you start to look at your skill set to figure out, is there an opportunity for you to do something else on the side? Now, all of that means I'm not stopping my look or my drive or my climb, but stability is going to be important. And I think, you know, you and your wife walking through and looking at the pros and cons of this, I think the stability side is going to allow you all to make more progress knowing what it is. Because, I mean, if you're getting work a couple days a week and then you might not have anything for seven to 10 days, that's sporadic. And I don't think that's anything you can count on. So again, I'm going to look at it. I'm going to walk through it.

I can either stay where I am and then take on a part time job that's going to give me some flexibility in the evenings or times that I'm not working or I'm going to take this job that's going to be steady and consistent. And then I can work on the side as well. That's going to allow you to push through and make progress on these baby steps. So thank you for your call, my friend. That's the direction I'm going to go because I like dealing with knowns. Unknowns make me nervous.

I want to know what I'm dealing with and what my target is. All right, back on the phone, I've got Stephanie in Kansas City. Stephanie, how are you? Hi, Chris. I'm doing well, thank you. How are you? Oh, I'm focused and not finished, but I'm ready to help you. What's on your mind? Well, so my husband and I are in baby step two.

We have about $68,000 in debt still. We have an annual take-home pay. Well, not take-home pay, but our salaries are $134,000 a year. We're struggling. We're cash flowing to kiddos in daycare right now, so I'm sure you can imagine. But we have a vehicle. It's kind of a vehicle that we use to ship our three children around. And then it's a mommy mobile, but it's got about a $12,600 note on it. And we are just really not able to get our, we're struggling with trying to really get our snowball going, our debt snowball going and trying to pay off as much as we can.

But what we were thinking about was possibly refinancing this auto note to a lower interest rate. Right now it's at 5.99%, and interest rates, we might be able to get it a little bit lower or even decrease the payment so that way we could take the difference and put it towards our smaller debt to kind of get that going more, but wanted some input on this because, you know, thinking of the fact that most millionaires stopped taking out loans, that's in the back of my mind. So just wanting some help with that. Okay.

All right. So again, the $68,000 in debt, break that down for me. What do you all owe on? Sure. So we have no credit cards. I have about a little more than $20,000 of small broken up into $1,000, $2,000, and then it's like $5,000 and $9,000 student loans. Okay. After that, it's the $12,000. It's the car note of $12,600. And then unfortunately, we did take out a home equity loan that's about $34,000.

Okay. All right. Yeah. So you guys have an array of debt. I want you to hold on the line. We're going to go to break, and we're going to come back, and we're going to dig into this situation. Because she wants to know, do they refinance a car loan to try to drop down a few percentages to try to fix this? Or do I have a better solution?

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Call 888-LOAN-200. That's 888-562-6200 or churchillmortgage.com. Hello, America. You are listening to The Dave Ramsey Show. I'm Chris Hogan, filling in for Dave. And before we went to break, I was talking to Stephanie in Kansas City, and she was walking through a scenario. They're wondering, do they refinance a car loan? Is this something that is necessary, or do they just begin to kind of dig in and get serious?

So, Stephanie, tell me this. You've got two kids, you told me, right? We've got three total, but two that are in daycare. Okay, gotcha. And what are their ages? So, two and four, and then 12, almost 13. Okay, all right. So, not very big.

And this vehicle that you owe $12,600 on, I'm going to go out here on a limb and guess what this is a minivan. It's a Suburban. Oh, oh. Okay, you went tougher. All right right you got a suburban yeah all right and so oh 12 000 and the interest rate you have on that that suburban is how much right now 5.99 okay all right all right so let's let's pause there for a second and you told me your household income is 13134,000? Yes. Okay. And you're looking at this, and you said you've got two kids in daycare. How much is that per month?

It's $1,440 a month. Okay. And you both are working outside of the home? Yes. Okay. All right. So looking at this with the debt that you have, you've got the vehicle. The home equity loan, you told me, you started telling me about, how much did you all borrow against the house? So we started with $36,000 and paid down to about

$34,000. Okay. You started with $36,000. What did you take this home equity loan out for? So we did some home improvements on the house. We paid off some really small credit cards, but it was predominantly doing work on the house. Okay, gotcha. All right. And so looking back on that, how do you feel about this home equity line? You know, actually, it improved our overall value of the home. So if we needed to really just absolutely get out of it, we could. So we'll have some extra.

We'd go, if we were to sell the house, we'd be able to pay that loan back, plus still have some left over to take and put towards other things. What did you improve of the home? We had a lot of siding issues. We had new siding put on. We had some windows placed. We put new flooring in. Some small little, let's see, countertop, you know, changing countertops and whatnot.

So, yeah, surprisingly enough, we made it go a long way. Okay. And looking at this, you know, looking at it, a home equity line of credit, that's like taking a big credit card against your home. Okay. Well, it's a loan. We didn't do the line of credit because we didn't want that. So it's actually more of like a second mortgage. Exactly. That's exactly. Well, and a home equity line of credit is a mortgage. Most people aren't aware. See, they don't market it that way. So just telling you. So looking at this, I'm going to say this.

How serious are you all on a scale of 1 to 10 to getting focused on your money? So I'm a little bit more focused than I think my husband is. He tries to reel me in. If it were me, I'd be about a 10. Okay. And where's your husband? He's more about a 6, 7. Okay.

In the sense that he's not willing to part with his truck does his truck have debt on it no no no the the suburban sorry this will be all that we're talking about so this is the vehicle that you drive but he's in love with it yeah okay all right well and that's the thing i'm going to tell you i'm if if not selling it because i'm always looking at something as an option because i know stuff is just stuff but I think you guys getting intentional with the income that you have. I'm not trying to refinance this thing. I'm not going to play the game and pay the fees of the refinance at the bank or the jumping through hoops.

What I'm going to pay is pay this loan down and pay it off. Okay. And so again, tightening the budget. Yes, you've got daycare, which is a very real, and it allows you guys both to be able to work. I get that. But then walking through this with the student loan, okay, the car is this suburban is the smallest. Okay. Then you've got the $20,000 in student loan debt.

Well, so we've broken that into smaller. So we followed the recommendations by Dave of breaking it down into, so we've got multiple smaller ones. I've already paid off two, basically two and a half loans at this point. So we're doing something, but it's not an entire 20. It's compiled of a couple different ones. Okay, so breaking that out, looking at it as you've been using the debt snowball approach, smallest to biggest, I think you continue on this path that you're doing. I'm not going to waste time trying to refinance this thing. I'm going to pay it off, and I'm going to own it.

And I want you and your husband to pinky swear that we're not doing car payments anymore. Like, I honestly want you to just grab both pinkies and say, we're not doing this anymore, okay, because Hogan might just show up at your house. I'm not going to show up, but you get my point. It's that kind of stance that you have to take to be able to say, I'm not doing this anymore. We've got three kids. We've got a 12 year old, a four year old and a two year old. We got kids. We want to do stuff for, and I'm not getting caught up in stuff. I just anymore. I'm going to take a stand. And when you do that, you guys can make progress. You've got a good income. You've got some focus. Now what you need is intensity. You see, focus is where you look at something, you're identifying, you see it for what it is. Intensity is where you start to do some stuff about it. And I think you guys working together and you can and you have,

right? You might be at a 10 intensity level and your husband's at a six or a seven. Hey, you can get some stuff done there. And you know how you start tapping into your dreams. You start thinking about the things you want to accomplish for yourself and your kids. And I'm going to tell you something. Stuff starts to come into focus and you start to realize you can run faster and you can do more. Thank you so much for the call, Stephanie. I have courage that you guys can make this happen. You just need to apply a little bit more pressure and a lot more focus thank you all right i got glenn and iowa on the line glenn how can i help you hey man appreciate you taking my phone call yes sir i got kind of an odd situation for my wife and i we just just had our first baby. He's three months old. Congratulations.

We took the financial peace class last year around August, September. Okay. We hit the debt snowball pretty hard for like six straight months and got rid of a lot of student loans. Okay. We got a lot left is the problem. How much is left? Due to loan debt, we got about $75,000 left. Okay. How much did you guys pay off? Oh, probably $25,000. Okay. All right.

And we now are wondering, trying to follow the baby steps through the snowball. Given my line of work i like to have a little bit more of a cushion if you will in our emergency fund already um i'm the deputy sheriff up here okay um so we've got about four or five months worth of bills saved up in a savings account for our emergency fund. My question is, I've got about seven and a half years in my pension, and cash out right now would be about $42,000. Total debt we got without our mortgage is about $125,000, $130,000. My question is, should we cash out my 42 000 pension cut our debt down by almost half or a

third i guess and really use that for the debt snowball then once we're debt free use that and hit it hard with the roth ira or what should we do or just keep doing what we're doing, I guess. Okay. Glenn, now, you told me, my friend, I hear your question. You told me you've got about $75,000 left in student loan debt, and then you said you've got $130,000 in debt outside of the mortgage. Where's the other $60,000 in debt? Oh, we, a couple cars, and then some medical bills.

Okay. And the car debt is about how much? About $ some medical bills. Okay. And the car is about how much? About $30,000. Okay. All right. So looking at this, and you've got the money set aside, how much do you all have set aside for retirement total right now? With my $42,000, we're right sitting about 60,000, 65,000.

Okay. And what are your ages? We're both 30. Okay. All right. So looking at this, you guys have an array of debt. Don't touch that pension, Glenn. Look at my face.

Look at me. Okay. Don't. Leave it alone. You're going to have penalties and fees and you'll have a whole lot of drama. Uncle Sam's going to wake up and go, oh glenn decided to tap me on the shoulder no that money is there for your future i want you guys to stay focused dig in keep doing what you're doing take on extra jobs if you have to but don't touch that money that money's for the

future my friend and you've got plans and you've got dreams and you can make it happen keep working the baby steps. Stay focused. Let that money grow. This is the Dave Ramsey show. Hello, America. You are listening to The Dave Ramsey Show. I'm Chris Hogan, filling in for the big man. And we are taking your calls on life and money, and we are having a blast.

So here's the deal. The phone lines are jammed up, but I still want you to call. The number to call is 888-825-5225. Again, that's 888-825-5225. And also you can find us on social media at Ramsey show. Can I tell you something that never gets old is meeting people out in the lobby that tell me about their journey when they're attacking and paying off debt. I've got some friends that are in town coming through from Ohio, and they were telling me that, hey, they not only were focused on helping to attack debt, but they were also Financial Peace University coordinators. And these coordinators are people that are helping other people walk through the course of Financial Peace University. And if you're new to the show, what Financial Peace University is, is a nine week course where we begin to help people to understand how this money stuff works. Dave, Rachel and myself, we're guiding people in teaching them on budgeting, how to attack debt, how to be able to save, how to be able to build wealth so you can do the greatest thing you can ever do with money, and that's give. And so if you're in a position out there and you say, enough is enough, I'm ready to turn

around my financial situation, well then guess what? Financial Peace University is for you. And I want you to check it out. I want you to get plugged into it. You can go to DaveRamsey.com and find out about Financial Peace University. It's easy to do, and it's time. You know, people are working so hard. People are out there working hard day in and day out.

And unfortunately, if you don't have the right plan, you're working, but you may not be making progress. And there's nothing more frustrating than to be working and thinking you're doing something and not be making the kind of progress that you want in your life. Well, let's make this year the best year financially you've ever had. And so you can get plugged into Financial Peace University to help yourself. But here's something else. You can also coordinate a class to be able to help and guide other people because people need encouragement. That's why Dave has this show, to be able to answer questions and deal with this so we can all get on the path to moving toward financial freedom so we have an opportunity to not only take care of ourselves but be able to help our families.

So it's a big deal. And so I want you to know you can do this. Don't hesitate anymore. A lot of people tell me, Chris, you know, I wish I would have done Financial Peace University sooner. Yeah, you and me both. You know, I didn't know about it at that time. But running into Dave's information about 15 years ago was a game changer for me. And I was working in the banking industry, right? I supposedly knew about money. No, I didn't. Right. I didn't have a plan. So, Financial Peace University is that plan, and congratulations to my friends that are visiting out

in the lobby. I'm proud of you and your journey. Alright, I'm back to the phones. I've got Tasha in Fayetteville, North Carolina. Tasha, how are you? I'm doing good, and yourself? Oh, I'm focused and not finished, young lady. How can I help you? Yes, I'm calling because I heard you guys talking about

the student loans earlier. Uh-huh. And I have two children that are, well, they're young adults that are entering college in the fall. One has already completed school. Okay. One year. Uh-huh. And so we took out a Parent PLUS loan.

He chose a private school. And previously had taken out a Parent PLUS loan for my daughter to also finish because she had maximized her loans, and so we had to take out a Parent PLUS loan. So that's already two Parent PLUS loans that we've already taken out, and now my other son is getting ready to enter. So we're looking, and both of them chose private schools to start in the fall, and both of them are private schools, which we would have to take out Parent PLUS loans again for them each.

So I didn't save up for them for college when they were younger, and also when they graduated we didn't do much with scholarships and things like that, so we didn't take advantage of that. So I think that's why I went on and did the Parent PLUS loan. But then my husband was trying to get out of debt now. But with these Parent PLUS loans, they're causing us to be more in debt. Yeah, it is. And you know what?

I appreciate you hitting the nail on the head, Tasha, because a lot of parents end up feeling that guilt. And they end up rationalizing taking out these Parent PLUS loans because you think you're doing your kids a favor. So looking at this, before we even dig in on that, how much is this private school? What's it cost per year? It's like almost $40,000. Okay. All right.

So it's around $40,000 for both of them. So tell me this. I'm going to shift real quick, and there's a reason. So that's 40,000 for one of them, and the other one is about 40,000 too. Okay. So how much in Parent PLUS loans have you all taken out thus far? Thus far, we have taken out 17 and 22. So it was like already 39,000 already.

Okay. All right. Now let's pause here, and let's go to you and your husband's situation. How long have you all been married? Six years. Six years. And what's your household income? 83.

Okay. And what kind of debt do you all have? Break it down for me. Okay. For him, he doesn't have much debt. His is only like about $20,000. But for me, I went to a private school too, but that's why I'm trying to tell my children, hey, go to something where it's affordable, where you can go. How much in student loan debt do you have? Yeah, no one told me.

How much do you have, Tasha? Oh, you're talking about total debt that we have? The student loan debt. How much do you have, Tasha? Oh, you're talking about total debt that we have? The student loan debt. How much student loan debt do you have? Oh, student loan debt. I have $167,411. Okay, I'm sorry. I blacked out a little bit while you were talking right there.

Tell me that number again. $167,411. That's what i thought you told me okay all right so that student loan for you you said your husband's got 20,000 what is the 20,000 on a vehicle what is it he has you know his is 18,000 okay is student loans. Is that it? Well, for student loans, yes. Okay, keep going. You got credit card debt? Yes, we do. How much?

Our total debt with everything is like $317,625. Okay. That's with a mortgage, too. Yeah, okay. How much is credit card debt? Credit card debt is probably about $30,000. Okay. All right.

So looking at this, Tasha, you have 167,411 reasons why your kids need to wake up and look at this scenario. Do you follow me? See, you've walked through this. You've lived this. You have this souvenir of student loan debt that's hanging, that's driving you insane. Let's break that cycle, okay? The school that they're going to isn't going to save the day. It's the quality of who they are and what they're standing for and what they're going about. So I want you to help in this. Like whatever you've signed on for, you've signed on for it for this upcoming semester because I know the ink is dry and the paperwork is done.

But here's the deal. They're going to have to get focused on looking for scholarships and grants if they want to be there. This is not something that we want to pay it forward. And I say this with that kind of attitude because so many people believe the school you go to is going to save the day and it's not if anything what it's going to do is cause delay all right it delays people to be able to follow through on the baby steps and to get intentional and so again young people i don't expect them to know but parents i want you to be able to be real with them and again with what you have going on no because all your kids are going to do is continue down this path. I got to continue. Now you and your husband, you all got an appetite for debt

and we're going to have to kind of kick that to the curb. Right. And we got to be clear. And I also want to encourage you and challenge you on, be careful with your pronouns, Tasha. You said he's only got 20,000 and that you have no, no, you got a pronoun problem. We right. Speak French. We, you all, you a pronoun problem. We, right? Speak French. We, you all. You said I do. It means we do. It means you guys are dealing with this together.

And I'll tell you what I'm going to do. I'm going to push you a free gift your way. And I'm going to send you to Financial Peace University. And I want you and your husband to go together. Because yes, you've got a big chunk of student loan debt, $167,000, but it can get fixed. But only if you fix it. There's not a government program.

There's not anything out there that's going to save the day. And I want you to hear this, because when we decide to stand up for ourselves, we get our own cape on, America, and we begin to realize that, hey, we can take charge of this, and it ain't going to be easy. Never said that, but it will be worthwhile. So, Tasha, we're going to send you Financial Peace University. I want you and your husband to get in there, but I want you to have a conversation with your young people ASAP so they can wake up and look at this and have a different opportunity moving forward. Have the conversation you wish someone would have had with you. This is The Dave Ramsey Show. I'm Chrisris hogan filling in for dave and boy we've had some fantastic questions uh absolutely love it if you've got a question

about life or money call us that number to call is 888-825-5225 again that's 888-825-5225. Or look us up on social at Ramsey Show. But I've got a question from Sandra on Instagram. And she says, I'm 64. My 401k has $400,000 in it. I have no debt and I own my home. How do I disperse this money to give me an income without bearing the brunt of a huge taxation bill. She says she's being told that if I take anything out, I must take it out all, take all of it out. Well, Sandra, I don't know who told you that, but that's incorrect. And so now what you're looking at is you've accumulated some wealth.

Now it's about looking at how to disperse it, right? How do you begin to deaccumulate? And I'm going to tell you in walking through this, and I like that you don't have any debt and that you're, you own your home. Now it's a matter of maximizing this and making some right decisions. And you'll hear people out there arguing about what percentage to pull out each year and all that, you know, listen, the bottom line is this money needs to last for you. And so you've got options. So the best thing to do is to reach out and to get guidance from people that do this all day, every day.

And that's the SmartVestor Pro. And so I want to encourage you. I want you to go to ChrisHogan360.com. You can click on the Dream Team button and locate a SmartVestor Pro in your area. Or you can go to DaveRamsey.com to locate a SmartVestor Pro as well. The main thing is I want you to gather up all your information and go sit down and have a conversation. There's nothing wrong with getting guidance, right?

We do this all the time. With our health, we go see a doctor. With our car trouble, we go see a mechanic. Well, guess what? With your financial future, like you need to see someone that can guide you. So Sandra, I encourage you to go have that conversation. And again, people, we don't want to wait, right? We don't want to wait out there. We want to get guidance and get the right information because this is our future we're talking about. This is serious business.

And so if you'll take a car in because it's making a knock or a ping, guess what? Your financial future is bigger than that. So go talk to someone. Again, you can find out by going to DaveRamsey.com slash SmartVestor to locate someone near you or ChrisHogan360.com and click on the Dream Team button. The main thing is it's your future, and we need to take it seriously. All right, I'm going back to the phone. I've got Olivia on the line from Nashville. Olivia, how are you? Hey, I'm great. Thank you so much for taking my call.

Oh, you're very welcome. How can I help you today? Well, I'm great. Thank you so much for taking my call. Oh, you're very welcome. How can I help you today? Well, I have an investing question for you. My husband and I are on baby steps four, five, and six. All right. I am self-employed. I have like a little business and therefore I don't get a 401k, no chance to match anything like that. Okay. I currently have a Roth IRA with about $50,000 in it, and I've been looking into a step IRA. And I was wondering what your thoughts were on that. Okay. Does it make sense to keep contributing to that Roth IRA and keep making it bigger,

or if I should start up with that step IRA? Okay, fantastic. Olivia, how long have you been self-employed? About five years, four years. What line of work are you in? I'm in the fitness industry. Okay, fantastic. Are you enjoying what you're doing?

I love what I do. That is a good thing. Now, how much did you tell me you have in Roth right now? I've got about $50,000. Okay, so you've been intentional with investing? I've got about 50,000. Okay. So you've been, you've been intentional with investing. Yes. Yes. I love that. And is your husband self-employed as well? He is, he's, um, he's kind of a mixture. So, um, he's employed and then he's also self-employed as well. So we're artists and all of that. got you okay so looking at this i okay tell me do you have

your own baby steps four five and six so i just need to clarify you don't have any debt do you zero i like that are you all homeowners yet we are um we still have about 115 000 okay right now we're paying about double um every month just to try and knock down the house, but we are looking into buying our next house, which, as you know, in Nashville is very expensive, so we're trying to get as much as we can down with the house. No, I like that. How old are you all? I am 28, and he is 35.

You guys are really being intentional. Where did you learn about money? Well, his father is actually a financial advisor. Okay. And my father has been telling me about investing for a long time. And so that's sort of why I'm, you know, looking into this step IRA. And I'm trying to figure out how to divvy things up that make the most sense. Yes.

Well, I'm going to tell you something. Be sure to thank them because that information has definitely paid off for you all as you've listened and you've been applying it. To be 28 and 35 years old and already have a significant amount in the Roth IRA, that's a good thing. A SEP is something where for a self-employed person, Olivia, it's their version of a 401k. And being self-employed, you can do up to 20% of your income into a SEP. So it is definitely something for you to take a look at to be able to start to intentionally invest in so you continue to grow the money. Okay. So I like this. I like it as an opportunity. There's also a couple other things.

There's a solo 401k that you can look at doing as a business owner. And there's, there are a myriad of options. Okay. So the main thing is, is to get connected with a smart investor pro and sit down and really begin to talk through these. And I think you and your husband both going would be really, really helpful because you all together are making the decision and you can walk through it. So I think the SEP, it can definitely be a good thing for you because we tell people

to invest 15% of your household income for the future. Okay. So I like that. But I got to tell you something. Can I give you some information? Can I give you some advice? Please. Okay. that but i gotta tell you something can i give you some information can i give you some advice please okay this next house that you guys are thinking about buying this house is going to determine how you guys continue to move forward in these baby steps okay right and what i'm saying is as you all are younger you're being successful you're you're making a good income this next house

i want to caution you please don't over caution you, please don't overbuy. Okay. Okay. Don't overbuy. What I mean is, is be intentional. What you all are interested in spending. I don't want you to go over 25%, right? Of a mortgage payment, but don't rely on the bank or the mortgage broker to tell you what you qualify for.

Okay. Because it's so hard in Nashville, isn't it? It is. It really is. And so guess what? You don't have to buy another house. I want you guys to look at the parameters and establish some rules and some guidelines that you're going to work within. And guess what? You don't do anything till you find the one like just slow down. And I'm telling you this from my own experience where I've made the mistake and jumped the gun. And just because I was making a little more, I did more. And then I felt like, well, then I need to do this or this. And the next thing you know, you look up and I'm living someone else's life. Like I'm not doing what I need to do for me. And so I want you and your husband at this position you're in right now to prioritize. I want you guys to do something, Olivia. I haven't told many people about this. I make two-year decisions.

What I mean by that is I want you to make a decision right now that you guys will look back on in two years, and you're glad that you made that decision. That's a whole other level of decision-making. That's you not looking at just the scenario. You're actually looking beyond it because you go, I want us to be set up to make a good move next. And so be very smart. Be very intentional, but do me a favor, just go slow because you guys are young and who knows when you're talking about trying to start a family or try to do X, Y, or Z or your business grows. See, I want you to just kind of think and then prioritize for yourself.

It keeps you in control. It helps you to understand kind of where you are and what you're doing. And it, and it just reminds you that, Hey, yeah, this is our lives, right? And so I'm proud of you for what you all have done, but I just wanted to give you that tidbit because I wish someone would have grabbed me back when I was younger and had a head full of hair. Um, I did people, I'm telling you, I'm bald by choice. I can grow all the hair I want. Well, that's, that's not true, but you get my point. Bottom line is I wish I would have had some information to tell me not to listen to the bank qualify me.

I think the bank qualified me for some unrealistic dollar amount back when I was looking to buy my first home. And if I would have done that, luckily I'd had the presence of mind not to fall for that. But if I would have done that, it really would have set me back even more financially. So America, guess what? We're going to stay in control. We're going to start to be aware of what it is we're doing. And if you're out there and maybe you overbought on home, well, guess what? You can fix that too. Reach out to a real estate ELP. Figure out the steps to take to fix it, right? You don't have to stay stuck. Well, listen, I want to thank James Childs, our producer, associate producer, Kelly Daniel, and of course you, America, because you had some fantastic calls and some fantastic questions.

Thank you for tuning in. This is The Dave Ramsey Show. If you would like to do your debt-free scream live on the show, make sure you visit DaveRamsey.com slash show and register. We would love for you to come to Nashville and tell Dave your story.