The Ramsey Show - App - Even Dead People and Dogs Get Credit Card Offers (Hour 3)

Episode Date: December 4, 2018

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🎵 Live from the headquarters of Ramsey Solutions, it's the Dave Ramsey Show. Where debt is dumped, cash is king, and the paid off home mortgage has taken the place of the BMW as the status symbol of choice. I'm Dave Ramsey, your host. You jump in, we'll talk about your life and your money. It's a free call at 888-825-5225. That's 888-825-5225. Shelby is with us in Portland, Oregon. Hi, Shelby.

How are you? Oh, I'm doing well, Dave. How about yourself? Better than I deserve. What's up? Good. Thanks so much for taking my call. So my husband and I are wanting to know if we are in a place where we're ready to buy a house or if we should keep renting for another year or two.

Are you out of debt? We are out of debt, yes. Do you have your emergency fund? Yeah, we've got about 15 saved for emergency fund. 15 what? $15,000. Okay, good. Do you have a down payment?

We have about $25,000 for down payment. I'm not positive, like, how much of that can go towards the down payment and how much needs to be allocated towards, like, closing costs and the rest of that situation. What's your household income? We make about $80 to $90. Way to go. How old are you?

I'm 27. My husband's 25. You have done a great job. I mean, that's amazing. Thank you. I appreciate that. That's amazing. You're 100% debt-free.

You've got your emergency fund in place, and you've got a down payment saved towards a house, and you're not even 30. Well done. Yeah. Thank you. I appreciate the house, and you're not even 30. Well done. Yeah. Thank you. I appreciate it. Yeah, you're ready to buy. We tell folks to...

Oh, you think so? Yeah, definitely. We tell you not to buy with more than a 15-year fixed-rate mortgage, where the payment is no more than a fourth of your take-home pay. Okay. And so you can back that into your take-home pay and say a fourth of that can go to my payment on a 15-year fixed rate, which your interest rate right now is going to be 4.5 to 5, somewhere in there, on a 15-year fixed.

And you're probably not going to put down 20% at this stage of the game. And so you're going to get PMI, which is private mortgage going okay yeah you're going to get pmi which is private mortgage insurance which you're going to hate you're going to hate it and that'll be like throwing money away right yeah it is because you're buying insurance for them that pays them if they have to foreclose on you it's foreclosure insurance is what it is that you buy for the mortgage company because you didn't put down 20%. So do a Fannie Mae conventional loan, though. And then what can happen is that when you get it paid down to 80% loan to value by paying extra on your mortgage,

then you can get them to drop the PMI. Okay. And so that'll be your next financial goal after you move in is to get, you know, keep, as if you were saving for additional down payment, you just start chunking on that mortgage and beat it down to where you get to that 80% of value. And then you probably have to pay for an appraisal with a mortgage company, an appraiser that's approved by them to prove that it's down to 80%. Or if it's 80% of the actual original loan or the original purchase price, then it becomes a

no-brainer. They'll drop it. But you've got to continually communicate with them and say, this is our goal, and what do we do to get there? What do we do to prove it to you? Because we've got to get this off. And so what price range home were you thinking of? We were looking around the $200,000 range.

Yeah, so another $25,000 or so and paid down on that over the next few years, and you'll get rid of that PMI. So you'll have PMI for a couple years. Okay, so I was looking at just the rough estimates of what the 15-year fix looks like on a $200,000 house, and that's like around $1,500 a month, give or take. That's just slightly over what you recommend as 25%. Yeah, but you didn't include your down payment. Your loan amount is not $200,000. Your loan amount is $180,000.

Right, yeah. Oh, and that came out to be $1,500? Yeah. Okay. And that was just off of the website. So what's your take-home pay? Our take-home pay is somewhere around like $65-ish, give or take. $1,500 is $25.

I'm self-employed, so it's... It's okay. $1,500 is less than 25% of $6,500. Oh, I'm sorry, not $6,500. I meant like $65,000 per year. It's a little bit closer to the income rate. Okay, about $5,500 a month then. Okay, so you're just slightly over, but your income's on the way up, is it not? Yeah, it is. Yeah, you're fine. You're right in there.

The other thing about you, the reason I can say that is you're not somebody who's always pushing the edge. You're somebody that's been very, very methodical and very careful and very intentional with every freaking dollar, or you wouldn't be able to be where you are when you call me today. People don't get where you are by accident. Right. Yep. Well, if we do the best, we can. Yeah, well, you have been.

I mean, you've been very careful, have you not? We have been. Yeah, and that's how you make, you know, you take home pay $65,000 a year. You freaking live in Portland, Oregon. It's not a cheap city. And, you know, you're doing really well. Very well done. Very well done.

Good job. You're going to be fine. Thanks for the call. Justin is with us in Rochester, Minnesota. Hi, Justin. How are you? Good. How are you, Dave?

Better than I deserve. What's up? Well, I just had a question for you about debit cards and Apple Pay. So kind of a two-part question. Since we've gone to chip cards as a nation and with all the fraud out there, what is the most secure way to run your debit card through when you're shopping in a real, I'd say retail store? Like using a pin or pressing the credit button to run it like a credit card and then also do you know if apple pay is just a secure or a more secure payment method if attached to your debit card well it's still running through your debit card whether it's apple pay or paypal or whatever and so um you know you've got you know two or three points of data breach that are potential. If you use your credit card at Home Depot and Home Depot has a data breach,

I mean, Marriott just had a data breach and 500 million names and pieces of data lost. Came out last week, okay? Yeah. And so, you know, it didn't matter if you paid for it by Apple Pay or whether you paid for it with PayPal or whether you paid for it with your debit card at the front desk or your credit card at the front desk. You just got breached. So that's because the vendor did that. The chip cards, I mean, if you run a chip card right now and you hit your PIN,

it generally doesn't go through the ATM system. With a chip card, it's going through the credit card system. It just keeps you from, you can run it either way. But the Visa is backing it either way. Now, if it's through an ATM, Visa does not back it. But if it is a debit card transaction, it's treated exactly the same way for fraud protection that credit cards are. Exactly.

Go to Visa's website. They have a zero liability policy. It's stated clearly on their website. You can just look it up. It takes about three minutes to find it. And it says, we want you to enjoy the security of both your credit card or your debit card, and you have a 100% coverage for fraud or theft when using your card, ID theft. And so online purchases are perfectly safe with either one as far as identity theft goes.

Now, you can do business with a bad vendor, and either card you're going to have a problem with. You're going to have to dispute and go through all that. But you can dispute a debit card just like you can dispute a credit card. And, you know, the merchant, you have to go back and forth with the merchant, and the credit card provider have to go back and forth with the merchant. So, overall, there's just no difference between a credit card and a debit card, except you may be short of the cash for a few days while you dispute this. But ultimately, at the end of the day, you got the same coverage. There's nothing smart about smartphones if your wireless plan is blowing your budget

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What's up? Dave, I've got a question for you about leasing cars. Here's the thing. My wife wants to lease my 17-year-old son a brand-new vehicle, and I have some reservations about it. She's got a few. I know, I know. Trust me, I had the same reaction.

She's got a few reasons for it. One of the reasons is she thinks that if we lease him this car, it'll really be his only chance to, you know. I have no idea what just happened. I don't know. I just hung up on him. It's okay. He's lost his mind, apparently.

Open phones at 888-825-5225. Ryan is in Bakersfield, California. How phones at 888-825-5225. Ryan is in Bakersfield, California. How about you, Ryan? How can I help? Hey, dude, I had a question. I'm wondering if I should move a higher debt in front of a lower debt in my snowball to avoid a lawsuit from the debtor. Why would you be getting a lawsuit if you're paying payments?

Well, the payments are kind of low. They want a lot more because the balance is so high. So raise the payments. It was a court date, but it got dismissed by the court. So I called them and said, well, if you can make a payment plan and get it done, then we won't send you back to court. Okay. So who do you owe the money to? To Discover, Discover Card.

Mm-hmm. Okay. And how much, what's the balance? The balance is $8,800. Mm-hmm. Okay. So I'm currently paying $50 a month, but it's just like a good fee. The same because it's not a payment plan that they want. Mm-hmm. Okay. And what's your householder? So I'm almost done $50 a month, but it's just like a good fee. They're saying because it's not a payment plan that they want.

Okay. And what's your householder? So I'm almost done with another credit card. So as soon as I get done with that one, I have another one in front of them. Okay. Then I would get to them, you know? Right. And so what's the two in front of them?

What do you owe on those two? Well, the one that's almost done here in December, my last payment is $407. I'm almost done with that one. So the next one is about a $5,000 balance. And are you paying payments on it? Yeah, just $100 a month. Okay, all right. Next to my snowball, which is going to be more like $500.

I understand. So tell me again what your household income is. It's about $70,000. Okay. All right. So, yeah, I think you can just, I mean, how much do they want in payments on the Discover card? How old is that Discover card debt? It's pretty old.

It's about a year and a half old. I was kind of default. I stopped paying it for a while. And then, you know, after I started listening to you, I said, I better call them and start making some kind of payment. That's when I came up with a good faith and I started paying them $50 a month. I just didn't know what the chances were.

If the court didn't throw it out this time, what are the chances of them getting a settlement or making me garnish my wages or something like that? Eventually, they could get around to garnishing your wages. That's probably a ways off. You probably haven't paid off before they get that far. I mean, so what are they wanting you to pay in payments?

They said they could do like a 36-month plan for like $300 a month for a while. You're going to have to pay it off longer than that, faster than that anyway. So why not put it on $300 a month and work your other payment, work your other $5,000 one off while you're paying $300 a month on it? Because then I figured it would take away from the more payments I would pay to them. Yeah, but not much. I mean, a couple hundred bucks a month, you're paying it down faster than that anyway. You're chunking on this debt, so you're making $70,000.

You're going to be through these two debts pretty quick, a lot faster than 36 months. Yeah. Well, I have to discover I have the vehicle, which is $13,000. Mm-hmm. Okay. And then... Yeah, you just work your way on through. But I'm saying, you know, you got $8,000 and $13,000 and $5,000, right?

And so you got $26,000 in debt making $70,000 a year. Correct. And that's the thing. So you just got $26,000 in debt making $70,000 a year. Correct. And that's the thing. So you just work that through and decide from that. But, yeah, I mean, I think that's the thing to do is just keep it in order and take the $300 a month thing and then just pound right through this $26,000 in debt making $70,000. You're going to be done in six months, maybe a year. You're probably cranking it about $2,000 a month on this, aren't you?

No, a little less than that, you know, with all the other bills we got and stuff. How much are you throwing at your debt? Right now, like $700. That's not much, making $70,000. Where's all your money going? Just, you know, mortgage and bills. How much is your mortgage? Mortgage is $1,400.

Have you stopped your 401K? Yeah, I don't have no 401K contributions right now. Are you getting a big tax refund? The income right now is like, I don't know, 900, a little over 900 a month. I mean, a week. Are you getting a big tax refund? Yeah, I should be. That's what I'm hoping on to throw one of these and get those knocked out.

I'm thinking you probably have too much being withheld from your check for taxes. That's what a tax refund is. So if you get a $3,000 tax refund, it's because they held $250 a month too much out. That's where the refund comes from is they took too much of your money and then they give it back to you. Does that make sense? Yeah, definitely. And so, yeah, you want to check your W-4s and check your payroll

and make sure that you're having the proper amount withheld to where you do not get a refund. And that brings that money home to be able to attack this. Because making $70,000, I want you to be able to attack this to the tune of probably $1,500 to $2,000 a month. $700 is going to take a while. That's pretty slow. So that's what we're after here. But either way, you're going to be fine i'm going to put that at uh take that 300 a month plan and that keeps them off of you and um you know get settled in on exactly what you do owe and exactly that in 36 months it'll be

done get all of that in writing because you don't can these people. And get a good solid email on that. And then from there, go ahead and go back to your debt snowball. Knock the $5,000 one out when that one's done. Then you pay more than $300 a month after that. And you'll have this done way sooner than 36 months. And you will have gotten your deal and gotten them off your back forever and ever and ever. Amen. So there you go.

Good question. Thanks for joining us. Open phones at 888-825-5225. Chelsea's with us in San Antonio, Texas. Hi, Chelsea. How are you? Hi, how are you? Better than I deserve.

What's up? Yeah, so I was explaining that me and my husband, my husband got medically retired from the Marine Corps, and now he's on Social Security and the VA benefits, and he can't work anymore. So his income total with everything is $98,000 a year. Wow. Unfortunately, yeah, unfortunately, we're in $84,000 in debt with vehicles, credit cards, and loans. What do you owe on your cars? One of our cars, we owe $33,000.

Our truck is $10,000. And then we own two houses. One of them is rented here in Texas. And then we are in a home. We own a houses. One of them is rented here in Texas, and then we are in a home. We own a home right now. All right. The one that's rented in Texas, what do you owe on it? We owe a mod house $218.

And what is it worth? Right now we could sell it for about $250. Okay. Let's sell it and sell the $33,000 car, and you're well on your way to get out of debt. Okay. Let's sell it and sell the $33,000 car, and you're well on your way to get out of debt. Okay. And then that was our biggest question is which house we should sell, because the other house we have is $356,000, and we pay about $1,800 on that one. Do you have an income outside of your husband's?

Yeah, our income includes mine. I work part-time. Okay, so the $98,000 is the total household income yes um his is about i make them i don't make too much and that was another thing that we were considering me going back full-time um would increase our you know income greatly about like 140 a year yeah well i mean the thing is if you sell the $250,000 house, because that's not making you any money, use that money to get out of debt. Get rid of the $33,000. You're going to be getting close.

You're going to be really beating on it at that point. You probably have $30,000, $40,000 worth of debt left after those two things are done. And you just bought a car you can't afford. And I'm sorry for what happened to your husband. And thanks for serving this country. We appreciate him. This is The Dave Ramsey Show. Let me tell you a story about two families that are very much alike in a lot of ways. Both families have two working parents and a couple of young kids.

Each has debt and has struggled to make ends meet. But they're starting to make headway with their budgets and smarter decisions with money. They have dreams and plans, and the only real difference is that one family has the right amount of term life insurance, and the other doesn't. Big difference. If one of the parents die, and that does happen, their well-being would be destroyed. Paying for the mortgage, utilities, food, and other bills would be impossible, let alone saving for education or retirement. That's why every day I talk relentlessly about getting term life insurance. Just go to ZanderInsurance.com or call 800-356-4282

and see how inexpensive it really is. Be the family that takes those deliberate steps to be different and responsible. It really does make you the hero of your story, and it puts you on course for better things ahead Jane and Ginger are with us from Abilene, Texas. Hey, guys, I see on my screen you're debt-free. Congrats. Thanks, Dave. Thank you. Hey, guys, I see on my screen you're debt-free. Congrats. Thanks, Dave. Thank you.

Welcome. How can I help? Tell me about your debt-free story. How much have you paid off? We've paid off $40,000 in 15 months. Good for you. And your range of income during that time? We started at about $77,000,

and that's what we maintained throughout our process. But now we make $110,000. Okay. Very cool. Good job, you guys. Very cool. What kind of debt was the $40,000? We had $22,000 on an RV, $5,500 on Shane's shop, $7,000 on a credit card, $150 on tires, $5,800 on

our house, and we cash flowed a $5,000 car for our daughter. So you paid off your house and everything? Yes. I'm talking to weird people. Way to go, you guys. Very cool. How old are you two? I'm talking to weird people. Way to go, you guys. Very cool. How old are you two? I'm 45.

And I'm 41. What's the house worth? About $175,000. Way to go, you guys. Well done. So did you sell anything big? Yeah, kind of. Sold a motorcycle and a tractor tractor but you kept the rv nope it's gone

it's gone too okay all right because that was one of your bigger debts right yes sir that was how we got rid of that debt we sold it okay very good good so what happened 15 months ago that made you guys decide to get rid of the toys and get your act together well i started looking at our money and trying to figure out how we were going to send our daughter to college and i was thinking that she doesn't deserve to be in this type of debt when she graduates like the debt we have and so i remembered a guy one of your guys greg pair in lubbock and that my sister had mentioned. And so I gave him a call, and I read the Total Money Makeover, and I told Shane, we're going to Lubbock to meet this guy.

And he thought I was a little crazy. Wow. Yeah, Greg's been one of our coaches for probably 15 or 20 years. Amazing. Wow, one of the very first guys that took our training way back. That's very cool. So you drove down there and got coaching, huh? Yes.

We actually went and saw them for about a year, and it's been kind of hard to wean ourselves off of them, but we're doing pretty good now on our own. Very good. Very cool. So what do you tell people the key to getting out of debt is? Determination, discipline. You've got to want it bad enough to do it,

and then you've just got to pull your ears back and do it. Way to go, you guys. Very well done. What about you, Ginger? What do you tell people the key to getting out of debt is? Well, we had to have a strong why and be determined or there wasn't any budget program that was ever going to work. And just sticking to our budget and having those monthly meetings and staying motivated

together. So, Shane, you sold all this stuff. Was it worth it? At the time when I did, it didn't seem like it. But, yes, looking back, it was very worth it. Yeah. time when i did it didn't seem like it but yes looking back it was very worth it yeah it feels how's it feel to have no payments oh i love it i sleep better at night yeah i bet it's a completely different feeling and now kiddo's going to go to college with no debt right that's right cool what's she going to study she's going to be an accountant all right that's apropos.

I love it. Who is your biggest cheerleader outside your house? Well, other than Greg, I would have to say just members from the community. I taught a financial peace class on one occasion, and everyone in there were great motivators. And then most of the people that we talked to kind of got excited about it and were curious. So we had a lot of people, when they found out about it, that were encouraging us. Okay. Way to go, guys. Very proud of you. Very, very well done.

Excellent job. We've got a copy of Chris Hogan's book, Retire Inspired, for you, and we're going to send you a copy of the Everyday Millionaire's book, soon to be a number one bestseller. It'll come out in January. You'll get it a little bit later, because that's what you're going to be. You're going to be that very soon. You've got this paid-for house, and now you're making this money,

and you can save and invest and be outrageously generous as you go along. Very, very well done. Thank you. Thanks. All right. Shane and Ginger, Abilene, Texas. $40,000 paid off in 15 months. Sold the toys and got after it, baby. I love it. Count it down. Let's hear a debt-free scream.

Three, two, one. We're debt-free! Yeah! Well done! I love it! Excellent job. Open phones this hour at 888-825-5225. Nicole is following us in the Baby Steps community,

the Ramsey Baby Steps community. It's a private Facebook group, and you can be a member of that group and interact with folks that are on this journey, and you can do that knowing that we're watching over it. My son's 12 and just got a credit card offer. Should I be worried his info is stolen? It's possible. I don't know that I would be worried.

I always would have identity theft protection on my family, which covers the kids as well. And that way, if something is stolen, you can look into it. But basically, they probably picked up his social security number somewhere it's not unusual for dead people and dogs to get credit card offers so really wouldn't sweat it that much you can pull a copy of his credit bureau report see if there's anything funny going on um probably not a bad idea to check it and then also make sure you get with zander insurance and get the zander Insurance Identity Theft Protection. That's what we've got on our family and on every family that works here.

And we've bought that for many, many years. And that's why we endorse it, because we know that they're going to take over and fix everything if there's any kind of a problem. Well, it's hard to believe that there's about 15 million of you that listen to the show each week. And just this year, we've had debt-free screams on the show totaling more than $36 million in this year. That's just the people that screamed. And because we want you to have the inspiration to stay the course, there's lots of ways to watch this show, lots of ways to listen to this show. Certainly your local radio station. There's 604 of them all over America, and we want you to check in with them. There's roughly 10 million people listening to those 604 stations, and we really appreciate it.

The Ramsey Channel, the Ramsey Network on Sirius XM Triumph Channel 111 and Insight Channel 121. So we're on Sirius XM 111 and 121 both. And it's got my show, the Ken Coleman Show, which is vastly popular. And the podcast off of that that's vastly popular. And they carry the Chris Hogan podcast as well. And it's really, really good stuff. You can pick it up on SiriusXM. We have our own channel on iHeartRadio and have for many, many years.

And so you can check out the Dave Ramsey Show channel on iHeartRadio. Not merely the show. I mean, we have our own deal there. And, of course, our daily podcast, which Apple just came out with a rating. It's the, just yesterday. And we are the number five podcast in the world in terms of downloads. Roughly 5 million of you downloading the podcast. So thanks for hanging out.

And you can watch the show with the Dave Ramsey Show app. You can watch us on YouTube, on our YouTube channel. And, of course, you can go to the YouTube channel, and all the debt-free screens are posted there, and all kinds of other information is posted there. All free to you. You can't beat it at all. So stay motivated. Head to DaveRamsey.com slash show,

and you can see all the different ways you can find this show every day and that you can be part of this show. We want to help you. This is The Dave Ramsey Show. Our scripture today, 1 Peter 3.15, But in your hearts revere Christ as Lord. Always be prepared to give an answer to anyone who asks you for a reason for the hope that you have. But do this with gentleness and respect. Peyton Manning says the most valuable player is the one that makes the most players valuable.

Brian's with us in Sacramento. Hey, Brian, how are you? Hey, how's it going? Better than I deserve. What's up? So I've been watching your show for a couple of days, and I think you give really good advice. But I do disagree with your thoughts on credit cards and that, you know, they're just bad overall. The biggest is, of course, we know the interest is bad on it,

but you're on the premise that you'll spend more with a credit card than with cash. Now, that may be true, but that's a general statement, it's a general statistic, and it doesn't apply to everyone. So there may be someone out there who can get a credit card and pay about the same price as if they would do with cash. And then that would increase their credit score and such. Yeah, my great-grandmother died when she was 90, and she drank bourbon and smoked cigarettes every day. And she used to say, yeah, these cigarettes are going to kill me one of these days. And cigarettes didn't kill her. They didn't kill her.

She got away with it. Other stuff killed her when she was 90, and it wasn't the bourbon either. Okay? Does that make it okay for me to sit here and say cigarettes are okay? Absolutely not. So your logic flow doesn't even sit here and say cigarettes are okay? Absolutely not. So your logic flow doesn't even make sense. How old are you? 21.

21. Okay. And, well, your logic flow is not, what you're saying is illogical. It's like saying drunk drivers don't always kill someone, so it's okay to drive drunk. That's your logic flow. And so it's not logical. It doesn't work. So here's the deal.

There's been multiple pieces of research done, not just my opinion, but multiple pieces of actual detailed in-depth research that shows that people spend more when there's a disconnect from the fact that they're spending money emotionally for instance when you spend cash there's one study that was done at mip that says when you spend cash it activates the pain centers of the brain you feel it you have an ouch moment when you spend cash when you spend with a debit card it doesn't do it so much but does a little bit because you still connect that with the balance on your checking account emotionally. When you spend with a credit card, it doesn't activate it at all.

And consequently, people spend more. Another example would be the basic friction on Amazon. You bought stuff on Amazon, I assume. Are you an Amazon Prime member? Yes. Okay. And you realize you spend more because it's easier to spend, right? Actually, I wouldn't say I even spend that much on Amazon.

Okay. The only time I would spend on it is if it's cheaper there than on a store. Yeah, but you get the idea that the easier it is to buy something, the more likely you are to spend over the course of your life. Now, an individual transaction, maybe, maybe not. Okay? I mean, I'm an Amazon Prime member. Actually, my wife is.

I use her account. But so when I'm on there, I do shop around like you're talking about, and I'm a fairly responsible guy with money. I'm a multimillionaire. The stuff I teach has worked for me. And so what the bottom line is, is that behavior in the way you handle payments does affect your spending patterns over the course of your life, over the course of a year. Again, an individual transaction, maybe not. And to your point, some people are more disciplined than others.

But the concept is simply this. The credit card is the cigarette of the financial world. There's no upside to using it, only downsides. Is it going to kill everyone? No. But it kills a bunch of people, financially speaking. So why handle snakes? Rattlesnakes don't always kill you when you pick them up, but most of them will,

or there's a good chance, you know, there's a better chance you're going to get bit if you fool with them than if you don't fool with them, that kind of thing. And so that's what it comes down to. And really what it comes down to is not studying your feelings or your opinions. It's, say, let's talk to wealthy people who have built wealth starting from nothing and ask them what they do with their payment structure. And here's what we just finished, the largest study of millionaires ever done. And what we found in talking to the millionaires is they pay cash for everything.

Some of them have a credit card and pay it off every month, like you're talking about, but none of them carry consumer debt of any kind ever. They don't carry car debt. They don't carry credit card debt. They don't carry any debt of anything else. And so I appreciate your opinion, Brian, but you're just wrong. That's what it comes down to.

You're just wrong. That's what it comes down to. You're just wrong. And there's no possible way that we would ever tell anyone to use a credit card because it doesn't cause them to win. It only has downside, not upside. I'm not going to tell you to drive drunk. You might get away with it, but you might kill yourself or kill somebody else. I'm not going to tell you to smoke cigarettes. You might be my great-grandmother and die of 90 of something else, but it very likely will kill you. It's a proven thing. It's, you know, there's only downside. There's no upside.

And so that's it. I mean, you know, the downside is your breath stinks. And when you smoke, you smell like you licked the bottom of an ashtray. And everybody knows it. Your clothes smell like it and everything else. And credit card debt does the exact same thing to your financial world. It stinks it up. And you're not going to win screwing around with these things.

So, again, to your point, can an individual from time to time do that yes a highly disciplined individual would be very unlikely to have major problems but there's no upside so why screw with the snakes they're cute you want to pet them i mean why screw with the snakes there's only one possibility screwing around with rattlesnakes. Get bit or not get bit. I guess there's two possibilities. Maybe you're really good with snakes. What does that prove? Nothing.

It doesn't prove anything at all. So we stay away from them, sir. And I appreciate your call. Open phones at 888-825-5225. Danielle is with us in Kansas City. Hi danielle how are you good thanks for taking my call sure what's up um well i am currently a stay-at-home mom and before i became a stay-at-home mom i taught six years in the public school system here in missouri and so i have $45,600 sitting in my retirement system. But now that my husband and I have two kids, we are significantly interested in doing homeschooling versus me going back to public school teaching.

So with the public retirement system, either there's three options. Either I can wait till the rule of 80 of my age plus the years that I worked, which is six, for me to draw from that without a penalty. The other one is to completely take it out with a 30% interest taken out, which would leave me about $32,000. Or I can roll it over to an IRA for a 10% penalty. Ding, ding. That's the one. Okay. Even though I plan on being a stay-at-home mom and not going back to school or even working

outside the home. Right. You roll it to an IRA. And the reason you roll it to the IRA is when you die, you get to keep that money. Your estate does. And you can grow it faster than they will grow it. You'll make up the 10% penalty within a year or two in the difference in what you'll make on the money versus them. And so you get with a SmartVestor Pro if you don't have a financial advisor to help you do your mutual fund investing.

And we spread our investing across four types of mutual funds inside the IRA, growth, growth and income, aggressive growth, and international. And if the 10% penalty you're referring to is the early withdrawal penalty, that won't apply. Well, when I was looking on the retirement system, it said if I want to roll it over to an IRA that they accept that you would do a 10% penalty, regardless of age. That they accept? Yeah, it has to be a certain IRA that they accept for the money rolling over. And so I would have to call the retirement system and make sure that I can roll it over to a certain amount or a certain account.

Talk to your SmartVestor Pro in your area. They will know what that is for your teaching system because they've probably done it 100 times. And, yeah, you need to roll it over into an IRA and good growth stock mutual funds. That's what we're trying to get to. And that's where we want to take it to as quickly as we can. Hey, thanks for the call. That puts this hour of the Dave Ramsey Show in the books. We'll be back with you before you know it.

In the meantime, remember, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus. Hey, it's Blake, Chief Production Officer for the show, and here's a little tip for 2018. Go download our revamped Dave Ramsey Show app from the App Store. We're always listening to your feedback and adding new features to make it even better. Check it out.