The Ramsey Show - App - Establishing a Will and Trust for Kids (Hour 1)

Episode Date: March 14, 2019

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🎵 Live from the headquarters of Ramsey Solutions, broadcasting from the Dollar Car Rental Studios, it's the Dave Ramsey Show, where debt is dumb, cash is king, and the paid-off home mortgage has taken the place of the BMW as the status symbol of choice. Cincinnati starting off this hour. DeMonte is with us. Hey, DeMonte, how are you? Great. How are you, Dave? Better than I deserve. What's up?

Hey, so I'm a single dad of two boys, and I currently have a term life insurance policy set up. So my question is, how should I have that set up to pay out upon my death? How old are the boys? Two and five. Okay. I would suggest your beneficiary be a family trust that is formed upon your death. So you need a will that says, upon my death, a family trust is formed, the DeMonte Family Trust or the DeMonte's Boys Family Trust,

whatever you want to call it, it doesn't matter, and the money is funded into that trust. And then you need to go ahead and lay out the terms of how you want that money handled for the boys. It should sound something like this, that the money should be invested in good growth stock mutual funds. The income off of those funds should go to take care of the boys' needs. Where would they go live if you passed away?

I'm sure they'll be with their moms. Okay. And so you would have that money sent to her to take care of them each month, the income off of this fund. Then the other things you can address in the trust are things like the only time you would take additional money out of the trust to be allowed to do that is if something happened that you approved of. For instance, you might allow them to take a small amount out for their first car.

You might allow them to take something out if there was a major medical event, that they needed some surgery or something. You might allow some to be taken out for college, and then you need to decide at what age you're going to release their portion, each of them's half, to them. Do you want to do that at 20, 21, 18, 31? I don't know. You can put that in the trust as well.

And so that's how Sharon and I had ours set up. I would recommend in this case, since you and their mom are not together, that she not be the trustee if you have someone else you trust to watch over the money while she watches over the boys. Yes, sure. Something like your mom or dad or somebody like that or your brother, assuming they're trustworthy, okay, worthy of watching over a trust. Yes.

So, you know, that's what you're looking for there. And you set all that up, and then you just name that trust in your will, and the trust is not formed unless you die. So our children grew up and were not minors before I died, so that will had to be redone because that trust was no longer needed. Nowadays our estate plan is different because our kids are grown, and I can do different things with life insurance. I can do different things with our assets.

But when they were little, it was set up exactly the way I just outlined for you. Okay, awesome. Thank you so much, Dave. Thank you for calling in. Leslie is with us in Gainesville, Florida. Hi, Leslie. How are you? I'm good, Dave.

How are you? Better than I deserve. What's up? Okay, so I am a 47-year-old single mom who have about $165,000 in debt. Oh, my gosh. Yeah. Are you a doctor or a lawyer? Neither.

What's your degree's in? It's in healthcare administration and respiratory therapy. Master's? No, just a bachelor's. Okay. Only $26,000 of it is student loan. $23,000 of it is a 10.85% car loan that's upside down. And $115,000 of that is my house.

Oh, I thought it was all student loans. I don't know where I got this. I'm sorry. Somehow I heard student loans. That's total. Okay, I messed up. All right. All right.

And so how much is student loans out of this? $26,000. And then you've got a $20, all right. And so how much is student loans out of this? $26,000. And then you've got a $20,000 car. What's your income? About $58,000. Okay. Well, I guess you're selling this car. Yeah, so how do I go about doing that?

Because I've been listening to a lot of your videos, and you say sell the car sell the car but i don't i don't know where to start understand all right here's the thing you realize it's killing you right i do yeah all right so what what is the car owed again what's owed against it 23 000 have you looked up what it's worth on Kelley Blue Book? Yes. On a private sale? Yes. What's it worth? $16,000. Okay.

So that leaves us $7,000 in the hole. Mm-hmm. And so in order for you to sell it, you have to have $7,000. Right. Who's the loan with? It's Alley Financial. High interest rate, right? Yes, very high.

Yeah, you got dipped. Yes. Okay. So how bad's your credit? It's about $650. Okay. All right. So if you go over to the credit union or the what? Let me just tell you this.

The car, actually, I'm a co-signer. My mom signed the car for me. The loan is in her name, but I'm a co-signer. I am responsible totally for the car. Okay. All right. Well, I'd love to get it out of her name. Would you help her?

Because basically she was helping you get a car, right? Yes. Okay. So you both got dipped. Right. Okay. What I want to do is I want to find $7,000. So I want to borrow that from a local credit union.

I want to borrow that from a local bank and get you a loan lined up. Matter of fact, we'll probably get you a loan lined up for about $9,000 so we can get you a little $2,000 car. Okay. Okay. And it might be difficult to do. In the meantime, just pay extra on this car as hard and as fast as you can, and let's get it paid down so you can get it sold. That's another way to do it, obviously.

Okay. But it's very difficult because you've got an interest rate up close to 20%, don't you? It's 10.85. Oh, it's 10. Okay. That's still bad, but okay. Right.85 oh it's 10 okay that's still bad but okay right i thought it was worse than that no the lender you've got's a subprime lender and so they usually charge ultra high rates i would have guessed north of 15 i did guess north of 15 and i was wrong okay so 10s 10s

bad but it's not as bad as i thought it was so anyway we got to borrow the money i would prefer your mom not be involved in borrowing that money because I want to set her free from this mess. Right. So if you borrow $9,000, you get a $2,000 car. If I come up and I'm the buyer and I give you $16,000 and you put $7,000 from that loan with it, you pay off the car, right? Right. Then you get the title to give to me, the buyer. Right.

That's how you do it. Okay. That's how you get out from under when you're upside down okay i will tell you that the what i've just told you to do is not an easy thing to do it's doable and you know but in the meantime let's just start chunking big big checks on this car getting on a written budget a real detailed written budget smacking down the thing as hard as you can. Because if you can pay down the $7,000, that's another way. Obviously, if you get it paid down to $16,000 or below, and someone wants to give you $16,000

or more, then you've got the money to pay the car off when the buyer comes along, right? And that way you can get the title. But you have to be able to pay the car off with loans and or money and or the buyer in order to get the title so you can hand it to the buyer. That's how you do it. This is the Dave Ramsey Show. Are high health care costs getting you down? Are you confused trying to navigate your options? Do you wish you could find an affordable, biblical solution to your health care costs?

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That's chministries.org. Christian Healthcare Ministries is a proud sponsor of Dave Ramsey Live Events. chministries.org. Rob is with us in Sioux Falls, South Dakota. Hey, Rob, how are you? Good, yourself? Better than I deserve. What's up? I'm helping with an FDU class, and I have a couple who the other night were discussing how they pay their bills,

and the husband is self-employed, and he was paying their major bills out of the business account for tax reasons, and his wife is really not comfortable with that, and I didn't know what to tell him on the situation. Well, thanks for being a coordinator. You can't pay your personal bills out of your personal account and make it tax deductible. Groceries are not tax deductible under any circumstances unless you're buying groceries for a company event. But if you buy groceries for personal consumption through your business account, it's not tax deductible.

So what's going to happen is he's going to get audited and he's going to get slaughtered in the audit. Okay. So this is stupid on steroids okay his wife is big time right okay there's several problems with what he's doing but number one it's just a false premise that the stuff just because you write it out the business account does not make it deductible and so that's number one number two don't do stuff just for tax deductions. That's going to get you in trouble. Number three, when you do not run only your business out of your business account,

you can't do accounting in your business to find out how the business is doing. This guy doesn't have a P&L on this business. He doesn't have a budget on this business. He is running this thing out of his ear. All righty. And his business is very poorly operated. I promise you, after having done this as long as I have, that's exactly what you'll find if you dig into it.

So what he should do properly is to set a completely separate account for business, only put business income into that account, and only pay business expenses out of that account. And then the money that's left over is called profit, and when you bring the profit home, you set aside taxes on it because you have to pay quarterly estimates. And you then have a clear picture, a clear delineation between the business and the personal account. But he's either getting bad tax advice or he's had no tax advice because what he's doing is absolutely wrong.

Okay. From an accounting perspective, a tax perspective, and a personal finance perspective, there is no win in this situation. And I'll throw one other thing in there to look for as you're talking to them. Watch for this. It may or may not be true. Sometimes when I see guys doing this, it's their way of still violating the baby step principles and going and buying crap they want to buy, but the wife doesn't know it.

Okay. It's their way of hiding a secret stash of purchases because it's over there in the business and she doesn't have visibility to it. Doesn't always happen, but sometimes that'll happen, and you'll see that in there too. But, yeah, this lady is exactly right and he's exactly wrong let me send you a copy of the book entree leadership to give to him on how to properly run his business it's how we've grown our business i'll send you a copy for that you can give them as a gift uh from from me and you

and again thank you so much for for coordinating the class elizabeth is with us in Chicago. Hi, Elizabeth. How are you? Hi, Dave. I'm great. How are you? Better than I deserve. What's up? Thanks for taking my call. I had a question regarding establishing a will and trust for our two children. My husband and I are on steps four, five, and six. And I know you advise for state-specific wills. And we just moved to Illinois from Ohio. And I wanted to get your advice on, we might not be staying in the state of Illinois. We might be moving out in the next five years for my husband's career. And I just wanted to get your advice on what we should do

there. Additionally, the ELP that we spoke to in Ohio said that his assistance with this would be about $1,000, and I kind of wanted to get your opinion on that as well. His what? $1,000 for his services to help us set it up. Set up a will? A will and a trust. We kind of went over all of our, you know, what we wanted to do to make sure that our children were set up. I don't have ELPs for legal work.

Okay. So it wasn't my ELp you talked okay i don't know who you talked to but um i don't have elps that do legal work we have elps that do investing and and whether or not elps they're smart investor pros in that case so uh no thousand bucks is too much for a basic wheel that's's high. Okay. That's really high. $300 or $400 max for a basic will to put together. It's not rocket science. And, yes, you need to do one in Illinois while you live in Illinois. When you move from Illinois, you need to do another one. The good news is you will have done all the hard work and have the basic place there,

and then you can just take it to an attorney and let them look at it and say, you know, state-specific, what do we need to change from an Illinois will to a Texas will or wherever you move to, and, you know, what differences are there. A lot of times it's how the signature is done. It can be something that simple. It has to have three witnesses and a notary in one state. One state, it just has to have one witness or something like that. It's something like that that will throw you.

So, yes, you do need to get it reviewed every time you change states. But and yes, a thousand dollars is too high for a basic will. Now, my I mean, I got a lot more invested in our state plan than that. But but our state plan is unbelievably complicated. But you're doing basic stuff. If your net worth is under $5 million, you should have a will, again, $300 to $500, something like that. Should get both of you a will in most areas. Hey, thanks for the call.

David is with us in Chicago. Hi, David. How are you? Hey, Dave. Thanks so much., thanks for the call. David is with us in Chicago. Hi, David, how are you? Hey, Dave, thanks so much. Appreciate you taking my call. Sure, what's up? Well, I read your book and did Financial Peace University in the last eight weeks or so, and I'm on fire to get this going. I need to get Baby Step 2 going. Awesome. I've done a lot of dumb stuff, and so I've a boat uh about eighty eight thousand dollars on currently up for sale and i've got a bmw that i owe about uh

uh 38 on um they're both upside down a little bit the boat mainly because of the broker um so i'm wondering do i need to do you think i get rid of both both and then just cash flow the difference? What's your household income? About $240,000. And I've got about a quarter million dollars in non-mortgage debt. It's about $240,000, actually, including the boat, the car, everything. Okay. You know, 401K, I've got it all. You obviously got a great income.

Your income's almost as big as your appetite for toys. Yeah. What do you do got a great income. Your income's almost as big as your appetite for toys. Yeah. What do you do for a living? TV, camera, and believe it or not. Good for you. Well, you're killing it, man. Okay, so the rule of thumb that we use, and you read this in the Total Money Makeover, is two things when it comes to things with motors in them.

Boats, cars, trucks, sea-dos, tractors, lawn tractors, whatever. Add up everything that's got a motor in it. If it's over half your annual income, then you have too much invested in things that are going down in value because everything that has a motor in it goes down in value quickly. Okay? Especially boats. Yeah, boats.

I've got a couple boats. They go down really fast so uh then then uh in addition to that uh now that if that's the only two vehicles you have you're under half your annual income so you technically meet that the second the second guideline is can i be debt free in two years except for my house and still keep these things if I like these things? And the answer to that question for you is no. And so, yes, you have to sell the boat. You probably need to sell the Beamer, but you definitely have to sell the boat.

Yeah, it's up for sale for sure. So just cash flow is the difference, I guess, on the loan. I think I'll take a tax return and apply that towards the... Yeah, just knock the mouth that you're upside down. So here's the thing. You told me you got about a quarter million dollars in debt, right? Yeah. Okay, and if we lose $88,000 of that,

that gets us down to about $170,000 in debt, not counting the Beamer. So can you pay $170,000 in two years? That's $85,000 a year. Be tough, probably. You can probably do it, though. If you want to keep the Beamer and you put yourself on a two-year schedule to be debt-free, then keep it. It fits.

It's not out of line. But if getting rid of it is the thing that allows you to be debt-free in two years, get rid of it. You can get you another one later. You make plenty of money. When you don't have any payments, you'll be able to save up and buy whatever car you want. And for that matter, later on, get you another boat. Save up and pay cash for it. You make good money, but right now this stuff's got you in a stranglehold and we got to break it. pay less at the dentist one dental is a company i've been telling my listeners about because i know these guys will save you money every time you visit the dentist here's's how. One Dental is a dental savings program that allows you to go to one of over 158,000 dental practice locations nationwide and save on things like cleanings, dentures, root canals, crowns, and even orthodontics. Here's the really cool part.

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Sure. What's up? Well, first of all, I just wanted to say we took your financial piece to university about a year ago, and it has changed our lives. Wish we would have done it at the beginning of our marriage. But, you know, we've been doing great. Good. So here's my question. We filed bankruptcy, unfortunately, about eight years ago when the market dropped. Unfortunately, my husband was in the real estate business. And I mean, we just lost everything. So, but the problem is we are still

eight years later getting collection calls. And there is a possibility that we owe some money for maybe medical bills, but they're calling us so that, you know how creditors, they'll sell off your debt to somebody else, to somebody else, to somebody else. So they say, well, we can't tell you, you know, what credit cards you credit cards you owe, where the debt has come from. And so I think they're committing fraud. So I think I got your answer, though, with collection bully. Yeah. Yeah, that's the first thing.

And it's possible they're committing fraud. The debt buyer business is pretty scummy, these guys that buy old debt, particularly debt that is that old. And there has been several articles and pieces of research written that are showing that they're actually trying to collect bankrupted debt, which is straight-up illegal. Right. Okay. And so if this was a debt that was on your matrix when

you filed bankruptcy you no longer owe it due to the bankruptcy and to try to collect on that is um you know is a violation of law and the problem is is these people are they're they're fly by night and they're very difficult to track down and to nail down. But check the folks at Collection Bully and see if somebody can help you with that. If you can actually get your teeth into someone and actually find a location, an actual name of a company that actually is trying to collect on a debt that is bankrupted, then you can do some pretty serious damage to them, and I would. In addition to collection bully, I would go to the Federal Trade Commission, ftc.gov, and file a complaint on them because they're in violation of the Federal Fair Debt Collection

Practices Act, so they're in violation of that federal law as well, if they're trying to collect a debt that was under the bankruptcy. Now, if it's just a very, very old debt, that's a different situation. If it wasn't in the bankruptcy, then it is something you probably do owe something on and then trying to settle it. But you've got to get, before I would want to settle something like that, I would want to verify that it is a debt that I actually had, that it's not just somebody with my same name that lives in Sacramento.

Good point. So start, and you said ftc.gov? Yes. You can find all kinds of stuff at the Federal Trade Commission website on the Federal Fair Debt Collection Practices Act. But, you know, jump in there. The first thing you've got to do so you ask them what the bill is from and they say uh we don't have to tell you we just want you to pay us money

yep okay and or they'll say um oh we'll research it and then suddenly out of the blue we'll receive a bill fortunately it's not you know a lot of money i mean it is it's still money but it's about maybe eight hundred dollars um but i don't want to pay eight hundred dollars if i don't need to well it's probably not even your bill if that's the case if they're being super vague like that then this is probably a scam artist it's probably a different scenario because if it's uh even if it's a debt buyer, a third-party debt buyer, they've got to have some point of reference to get you to want to pay it. Otherwise, it's not even my bill.

I'm not paying it. Just don't call here again. Right, right. Okay. So you're going to have to show me something that gives me some indication that it's actually me and that triggers some kind of memory. But just call up and go, you owe me money, pay me. No, I'm not paying you money.

Jump in the creek. Just because you just dreamed this up, I could call up anybody and say that, right? That's silliness. All right, Lance is with us in Columbia, South Carolina. Hi, Lance, how are you? Hey, good, sir. Thanks for having me. Sure. How can I help? My father and I, we co-own 29 acres, and my family and I purchased a mobile home, a double-wide mobile home a couple years back and put it on there. $51,000 on it, unfortunately, as a 9.68% interest rate.

And we're about to finish baby step two, and we're just wondering, should we just go ahead and pay off this mobile home and fix it up and just stay in it, or should we look to buy a home that actually we can earn some equity in? Yeah, you need to buy something that's going up in value, not something that's going down in value. Okay. Because we know the double wide something that's going down in value. Okay. Because we know the double wide is going to go down in value. Right. Pretty rapidly, you're going to turn $61,000 into $6,000.

Yes, sir. And if you built a small home for $60,000 or $70,000 on this same piece of ground, it would go up in value. Agreed? Yes, sir. thousand dollars on this same piece of ground it would go up in value agreed yes sir and so the trick is if you ask yourself the question what's going to put me in the best position 15 years from now 10 years from now then if you ask yourself that question that the answer to that question says sell the mobile home build a house okay does that make sense absolutely because that's what puts you in the best long-term position short term it'd be nice to have mobile home is sitting there paid for i live in short

term but i'm about to turn 60 grand into six right and over a period of you know whatever a decade or something and so it just they just don't go up in value it's that simple uh they don't appreciate so the land that you own co-own with your father-in-law is that what you said with my father with your father okay yes sir can it be uh divided to where uh he owns a portion and you own a portion yeah we have looked into doing that okay does he live on it he does He actually owns a modular home. Okay. All right. Yeah.

And so, yeah, you probably ought to plat it out so that you've got enough acreage there to do a plat on it probably, depending on your particular area, but I suspect you can. The problem is if something happens with him, if he's in a car wreck and somebody sues him for $500 million, they're going to take your land the way it's laid out now. And so you guys need to separate this from a legal entity standpoint where you own a portion, he owns a portion, and then he's got free reign over his, you've got free reign over yours. And on your portion, then I would build a house. There's no emergency.

You don't have to do it immediately in terms of building a house. But, again, what's our long-term game plan? It would not be a mobile home. It would be a house that is going to go up in value on a piece of ground that I own. And that's how I would want to be if I were in your situation. And that's not dissing your dad or saying, I think something's strange with dad. Stuff happens to dads and to sons that are beyond their control. And the problem is it takes both of you down when you do that.

And so it's much, much better. You're much better off to just keep this very separate, very distinct. The ownership is clear. And you can still have the exact same, you know, relationship. You want to run cattle on each other's property. That's fine. Doesn't matter. You know, you obviously have a good relationship. You want to run cattle on each other's property, that's fine. It doesn't matter. You know, you obviously have a good relationship.

You can do all that kind of stuff. But when in doubt, if something happened to you, your wife owns a piece of ground. She doesn't own a piece of ground with her father-in-law, which could potentially get very weird if something happened like that. So you don't want to be in that situation so i would plat it out and i would build and that might be a three-year plan it might be a five-year plan it might be a three-month plan i don't know but there's nothing on fire there's nothing pushing you no sense of urgency but long-term mobile home is not the place to be

because they go down in value so So thanks for the call, dude. This is the Dave Ramsey Show. Thank you. Thanks for joining us, America. Our question of the day comes from Blinds.com. Their 100% satisfaction guarantee means that even if you mismeasure when you're ordering your blinds or you pick the wrong color, they'll make your blinds over for free. With Blinds.com, you get free samples, free shipping, and with the new promos that they run every month, you save even more. Be sure to put the promo code in when you go to Blinds.com. The magic word, Ramsey.

Today's question comes from Janita in Illinois. She says, I clean the houses for a living, and so I get paid as I work. So there isn't a weekly paycheck. It's more of a daily pay. How do I go about filling out my allocated budget form for the period and the amount um i would just pile it up i mean it's like working restaurant you work for tips or something pile it up and pay bills once a once a week and you can rewrite it once a week um and the way you do that is just again you do like we do anytime you've got an irregular income, you list the things you're going to spend money on, most important to least important.

And so it would start with food, then lights and water, and it would go from there. And that's kind of how the idea works. Kurt is with us in Kansas City. Hi, Kurt. How are you? Good. How are you doing, Dave? Better than I deserve.

What's up? I had a question for you. I have a home mortgage of about $220,000 at $2.75,000. We also have a fair amount of money saved. My wife would like to use that money for a lake house. And because we have a low interest rate on our home mortgage and we're not making anything in the bank with that money, we could build an asset with a lake house. And I'm not 100% sold that that's the best thing to do. And so what would you spend on the lake house right now i haven't figured it about 180 okay and how much money do you have saved total 150 that's your tire nesting uh not entirely okay do you have a 401K plan or other things in addition to that? Yes. My wife has a 401K.

I have a retirement through work, plus I put into a 457. So how much is in all of that? Oh, boy. Probably $350,000. Okay. How old are you guys? 44. All right. What's are you guys? 44. All right. What's your household income? 250.

250? Yes. Okay. How long have you been making that? Maybe three to five years. Okay. You're killing it. Congratulations.

Thank you. You've not been saving a ton ton considering how big your income is, and you're behind on your retirement. So I've got a lake house. I love a lake house. And so I'm a huge proponent of buying a toy when you can afford to buy a toy, and that's what it is because it's not going to make you money, except it might go up in value, but you're probably not going to sell it.

So it's not really going to make you money, except it might go up in value, but you're probably not going to sell it. So it's not really going to matter. It's basically money that's parked there for fun. The good news is it's parked in fun that's going to go up in value, not fun that's going to go down in value. So that's where you said we build an asset. But you don't build an income-producing asset. It's not going to help you with your retirement goal. Right. And, you know, so if you were to do this

number one you would have to pay cash for it um number two for whatever you're going to do number two you've got to really lean in and you guys have got to commit to getting your house paid off then and as quickly as possible and getting some more money in this retirement account and get your retirement built up. I mean, the kind of money you're making, I'd like to see you have a million dollars pretty quick. Right. So would I. And that would be my goal. And so if you'd called me up and said, I have a million dollars in my 401k, my house is paid off,

this would be a no-brainer. You'd build the lake house. Right now, it's kind of on the bubble, and I'm not sure I i would i'm not sure i wouldn't use that money to pay off your house first and then let's get um you know get your retirement going good and then go pay cash save up and pay cash for a lake house maybe three or four years from now so that's actually what i would do if i were in your shoes is i would get your home paid off first and i'd save uh and then save up and pay cash for the lake house meanwhile really pouring on the coals on the uh retirement accounts and getting those souped up even more and uh filling up everything you can fill up that's

what i personally would do i mean you're not completely out of line if you go do it now but you've got to commit to those other two goals if you go do this lake house and the asset argument doesn't hold water because it's not an income producing asset and again i've got a lake house it's one of my favorite places on the planet i want you to have a toy but you know resort properties that you take your family to for fun it's like owning a boat a very freaking expensive boat except this boat goes up in value but they don't you know it's a toy that's what it is as far in your asset base and there's nothing wrong with toys but toys have their place and when do you buy a toy well i don't buy a toy like that till my house is paid off and until i've got my retirement stuff really rocking you're a little

behind not bad um so i'd like to see you do some more there and get the house paid off before you did it that's what i would do but again if you'd go ahead i'm not going to yell at you for that i wouldn't call you stupid or something like that but um but if you do then the only way you would be stupid if you don't commit to turn around paying off the house as quick as possible and pay cash for the lake house and turn around and pay off the, you know, and soup up retirement. So before or after the lake house. Jim's with us in Sioux Falls. Hi, Jim.

Welcome to the Dave Ramsey Show. Hello. How are you doing? Better than I deserve. What's up? I've got a question for you on a Roth IRA. I've got some debt, about $20,000 in debt to pay off yet, and got just about that much in my contributions to a Roth IRA.

Just wondering if we should pull that out of there, pay that off, and then we will be debt-free at that point. No. I never cash out retirement accounts to pay off debts unless it is to avoid a bankruptcy or a foreclosure. I would stop adding to them, and I would lean in and focus on that. What's your household income? About $70,000.

Okay, and what's the debt on? Credit cards and a student loan. Okay, no car debt? No, no car debt. Okay, and so have you gotten yourself on a budget so this credit card debt stops happening? Yes, we haven't used credit cards for two years. Good, good, you're on track. Okay, well, you ought to be able to pay off 70 in one year making our 20 in one year making 70 so we're really not talking about much here and no i'd leave that

roth money alone that's going to grow to a lot of money over time if you've got it invested right and it's going to grow completely tax-free and all of that money the opportunity on that money's gone if you turn around pull it out and pay off stupid credit card debt so yeah chop up the credit cards as you've done stop using them get on a budget so that that doesn't grow back and then just tear into it and say okay a year a year we're going to lean into this thing really hard we're going to be really focused we're going to be really intense. We're going to be really intense, and we're going to knock it out as fast as we possibly can in a year. Nick is on Facebook. Dave, are automated investing services a good idea compared to traditional investing?

There's a lot of stuff out there right now popping up, what we call robo-investors, like, for instance, Betterment is one of the better known um the biggest problem i've got with them is that they don't often they often are so forceful in their suggested process that you really can't control the investing it's almost as if they control it for you and i don't want you to automate the control um if you are a hundred percent decided on how you are going to do your investing and you want to purchase that through something like a betterment it's not a bad deal the fees that they charge um for the management of it is not because they're not really doing any management is uh are very very low and so it's it's an okay way to purchase the stuff. I have found that the research shows us, though,

that if you have a person in your corner that is a teacher that will help you make decisions, you'll make better decisions. But if you have a very, very small amount of money and you don't want to fool with that, or you just have a lot of time on your hands and you just enjoy tinkering and messing with your investments all the time, then the robos are fine. They're not the end of the world.

I almost never agree with their suggested allocations, but that's something you would override if you're on top of your game anyway. So, and all you're using them for then is just the investing vehicle, the process, your broker. And it's a cheap broker is what it amounts to. This is The Dave Ramsey Show. Hey guys, it's Blake Thompson, Senior Executive Producer for The Dave Ramsey Show. This hour's over, but you can find more great content on our YouTube channel. Catch the most watched Dave Rants, debt-free screams, and the very popular Everyday Millionaire segment.

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