The Ramsey Show - App - Everyone Pays a Price to Win - No Exceptions! (Hour 3)

Episode Date: January 14, 2020

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🎵 Live from the headquarters of Ramsey Solutions, broadcasting from the Dollar Car Rental Studios, it's the Dave Ramsey Show, where debt is dumb, cash is king, and the paid-off home mortgage has taken the place of the BMW as the status symbol of choice. I'm Dave Ramsey, your host. Thank you for joining us, America. It's a free call anywhere in North America.

The number here is 888-825-5225. 888-825-5225. It is free, and some say the advice is worth what you pay for it. All right, up next is Fred in Kentucky. Hi, Fred. Welcome to the Dave Ramsey Show. Hi, Dave. Thanks for taking my call.

Sure. What's up? Unfortunately, I'm going to have to replace one of our cars. Wasn't quite prepared for it to happen this fast, and I refused to take a car loan. So I'm just hoping I can get a little advice from you. Good. I like it so far. So you got any money saved? I've got my emergency fund, which has taken a hit the past couple months due to cars. So it's actually down to about $5,000.

I've got an inherited IRA account that I don't want to get into. Other than that, retirement accounts, which I'm not going to touch those. For sure. How much is in the inherited IRA? About $80,000. What's your household income? Roughly $90,000. Okay. And the current car, what's the deal with it? We have literally run the wheels off of it. It won't tell you the make for fear of that, but it's a vehicle with about 250,000 miles on it, and it is just done.

Is it running? It's running. It's actually my wife's vehicle, and I'm getting to the point that I'm uneasy to let her to keep driving it. Okay. Well, I mean, with the income you have, it sounds like you have no debt, right? I have no debt. The problem is self-inflicted. Every extra dollar that I get, I pack it away into either my 401 or my Roth IRA. Which was a mistake, given that you needed to be saving to replace your wife's car.

Okay, I'm with you on that. So let's stop everything for three months and pile up $10,000 and buy her a car, and you drive the old limp mobile while she drives your car. Okay. grand and buy her a car and you drive the old limp mobile while she drives your car okay i mean in three months you could with no with no contributions to anything making 90 grand a tight budget in three months you ought to be able to save 10 grand making 90 right right what happens if the vehicle doesn't make it that long i'd cross that bridge when i get to it. I'd probably pop that inherited IRA. It's the only thing I can hear that works. Or you're going to clean out your emergency fund

and have absolutely no liquidity at all, which is okay, but you're still going to only have a $5,000 car, and you're probably going to turn around and upgrade her car in six months later anyway. Because you're not going to put her in a $5,000 car permanently. No, no. And you only got $ thousand dollars did i hear that right yep okay so um you know i think you i think you get some duct tape and some baling wire and let's keep that thing running you drive it give her yours it's federal law anyway mama gets a good car so um you know let her drive the good car and you drive that

thing and you just keep her running baby i mean you just keep patching it and patching it and you know uh and then whatever money you got together let's pay cash for the thing and buy something as quick as you can i think 10 grand will get her a pretty good car don't you oh yeah yeah i was thinking 10 to 15 000 but uh, but maybe we can work our way up to the $15,000. The problem with hitting the inherited IRA is you can't put it back. Once it's out of there, it's out of there. And so if I'm in your shoes, I'm with you. I would try to not hit that thing.

But if it lays down one month into my little three-month scenario I laid out here, you may be forced to hit that thing for enough to get her a decent car, and oh well. Then you learn your lesson, and you say, gosh, I have to save up and pay for things other than just investing. Correct. And that needs to be a better rhythm in your financial plan. But otherwise, you've done a great job with your money, an excellent job with your money, as a matter of fact. So well done, sir.

I think you're just a super saver, and you haven't thought about the operations of the household because you're so into investing, which is not a bad thing, but it's a course correction that you're due for. Hey, man, thanks for the call. Open phones at 888-825-5225. You jump in. We'll talk about your life and your money.

It is a free call. We appreciate you joining us and hanging out with us. Well, this is the month when people just like you decide that I've had it. I'm not living like this anymore. I'm sick and tired of being sick and tired. This is where the rubber meets the road. And you have a goal to get rid of your debt, save money, become outrageously generous, make some changes. Well, there's a great way to do it. Some people start with Financial Peace University. Some people listen to the podcast.

Some people do those two things, and some people read the best-selling book, The Total Money Makeover, like seven million copies out there floating around, and most of them have actually been read. Some of them are still a coaster on a coffee table, but the book has the stuff in it to walk you through the baby steps and show you exactly what to do. That's why it has been so popular for so long. It's a number one on the Wall Street Journal for the last 10 weeks in a row. It continues to be a number one bestseller. And so check it out. It's $12.99 right now in the online store at DaveRamsey.com, or you can call the Ramsey Concierge team at 888-22-PIECE, 888-227-3223.

So the rules around here are this. We teach you really basic concepts that work. Some of the most profound things you will ever learn in this life are easy to understand and hard to do. Love your neighbor as yourself. It's easy to understand. But some people have a neighbor that's not real lovable. Some people just are not that lovable. And so it's hard.

It's hard. I know what I'm supposed to do, but doing what I'm supposed to do is hard. And no discipline seems pleasant at the time, but it yields a harvest of righteousness. You pay a price to win. Everyone pays a price if you're going to win. Everyone looking for a shortcut is going to get burned. Get rich quick doesn't work.

Doesn't work. And no, you're not the exception. You're just arrogant. If you think you're the exception, you're arrogant. He who hastens to be rich, wants to get rich quick, he who hastens to be rich, will not go unpunished.

See, I did that. That's how I went broke. I built a house of cards. I got too far in debt buying property that I couldn't afford. I was out of control and I lost everything in my twenties. I had the opportunity to start again over. That's what you don't want to do. 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? Based on New Testament principles, Christian Health Care Ministries, or CHM, helps Christian families, churches, and ministries join together as the body of Christ to share their major health care costs. Christian Health Care Ministries is the original health cost-sharing ministry, a Better Business Bureau-accited organization, CHM members share to pay each other's medical bills. It's not insurance. It's Christians financially and spiritually supporting each other. It's what Christian Healthcare Ministries has done for over 35 years, and our members have shared over $2.5 billion in medical bills. To learn more, visit chministries.org. That's chministries.org. Christian Healthcare Ministries is a proud sponsor of Dave Ramsey Live Events. chministries.org. Sarah is with us in Indiana.

Welcome to the Dave Ramsey Show, Sarah. Hi, Dave. Thank you for taking my call. Sure. What's up? My fiance and I recently got engaged congratulations thank you we both have a home that um that we own we don't own it outright yet um so we're trying to figure out what to do with our houses right now we both live in separate houses good okay and when are you getting married

when are you getting married probably 2021 why so long um well my daughter's getting married this year so i'm trying to focus on her wedding okay okay and that way we could save some money for the wedding okay well after you're married i would just pick out which house you're going to live in and sell the other one that'd be a fairly normal thing to do well we was trying to think if we could rent it out rent one of them out. Do you have debt on them? Yes. Yeah. No, I wouldn't do that.

No? I would use the equity in the one that you sell to work your financial plan wherever you are on your baby steps. And if you're up to baby step six after you're married, meaning you don't have any debt, you have your emergency fund, you're putting away retirement money and all that, then I would use it to pay down the property that you're going to live in. I want to get your home paid off and then pay cash for rental properties before you start buying rental properties.

I would not buy a rental property with debt, and I will not tell you to keep one, keep a house, a former home with debt, while you've still got debt on your personal residence too. So now, I mean, after you get married, pick out which one you want to live in, sell the other one. That's what I would do if I were in your shoes. Hey, thanks for the call. And by the way, weddings aren't expensive. You could just get married. I mean, it's a second marriage, a late marriage. If you've got a daughter old enough to get married, we know this is not your first go-round, so it doesn't have to be

some big wedding. You can just get married. It's up to you. Just a thought. Jeff is in Texas. Hey, Jeff, welcome to the Dave Ramsey Show. Good afternoon. Thanks for having me. Sure. How can I help? So I have a question on refinancing. My wife and I bought a home about 10 years ago. We refinanced at about seven, but we were pretty aggressive on a question on refinancing. My wife and I bought a home about 10 years ago. We refinanced at about seven, but we were pretty aggressive on a 15-year note. With that, I think we kind of put ourselves in a, I think you'd call it house poor situation. Our mortgage and property taxes equates to about 35% of our bring home. And so my question, I mean, we're getting by, okay, we live comfortably,

I guess you'd say, but we have not been able to put anything away as far as like a nest egg or an emergency fund. So my question to you, we've got eight years left on a 15-year mortgage at a three and a quarter percent interest rate. Does it make sense to continue down the same path we're on and just... What's your household income? Do we... Right about $125 gross. And how much debt do you have other than your home? None. Okay.

And you can't tighten up your budget enough to save up an emergency fund? Stay out of restaurants. Well, we got two kids. I don't care. got two kids i don't care but you're right it's not required to take a restaurant to a kid to a restaurant yes sir no emergency fund man that's pretty basic yeah you guys you guys need to get on a written detailed plan and hit your goals this is tight and it's not what I would have signed you up for, but that's not what's keeping you guys from winning here. What's keeping you from winning is you haven't been willing to tighten up on

the other areas to offset the fact that you did bite off more than you can chew here. Now I wouldn't refinance. I think you can make it through. I'd look at things I can do to get my income up. I would look at assets or things that are laying around that can be sold to create that emergency fund and create that gap. And then if there's anything you can do to get your income up for a while and relieve a little of the

pressure, that wouldn't be a bad thing, even if it was a temporary move. But you're pretty close here. I'm going to try to push on through this if you can. Now, if you don't see your income changing for eight years and you're going to be stuck in this for eight years, yeah, you probably do need to refinance it, I guess. But honestly, you guys need to get on a budget and tighten yourself up and watch what you're doing. You've not done that yet.

I would do that as my first step, you know. But, yeah. Hey, thanks for the call. Open phones at 888-825-5225. Tom's in Rhode Island. Hey, Tom, welcome to the Dave Ramsey Show. Hey, Dave, thanks for taking my call. I appreciate it.

Sure. What's up? Hey, so I am calling today because I put myself in a pretty poor situation over the last four or five years. I have a small business, and I put myself in a lot of debt. A quick background is my father has always been a huge fan of yours, and he preached that I you know good money management skills and i did for a long time i paid for pretty much everything cash for the first four or five years of my business and then i got ambitious and started taking on notes and i got myself into

a situation where about four hundred thousand dollars in business equipment debt. And my company makes enough money during the busy season to cover that debt. But every winter I'm strapped. I'm barely making it through the winter. And my question is, should I consolidate that debt with an SBA loan to get my cash flow up? Because my cash flow is my big concern. What is your net profit taxable income in a year? Between 160 and 190.

Why have you not been able to reduce $400,000 worth of debt with that kind of income? Well, that's what I've been doing. I've been taking that 160 and I've been putting it back at the debt, but I've also have had some, we've had some bad. But I've also had some bad habits. My wife has had some bad habits. I've had some bad habits, personal spending. And we sat down over Christmas and just said, we've got to stop this. Yeah, agreed.

What is the equipment that you own? Well, first, I'm turning my truck in. I'm turning my personal truck in Thursday. And I'm selling one of my vehicles. What do you owe on your truck? Uh, it's leased. So I'm trading the lease in. Um, if I was able to work a deal out, I walk away from it.

I don't have to owe anything. And I have a van that I owed, uh, about 20 left on it. It was just a poor decision to purchase it. I didn't use it as much as I needed to, so it was basically a rental. And I'm going to break you in on that, too. Okay, so I got rid of some things. What's the big equipment? You got $40,000, $400,000. What'd you buy? So I've got a back hose, I've got a skid steer excavator, several trucks, all of which I use. But the two that are killing me the most are cash loans that I took two years in a row for $75,000 each. And those aren't too good.

Those will hurt. Yeah. Okay. Well, what I'm going to do is just lay out a game plan here that says I'm going to sell enough stuff, even if it's things I think I need, to get and use my cash. You know, you've got a good income to set up a household budget that's bare bones, take the money home for bare bones, and feed your family. Every other dollar goes on the debt, and that cash flow that I'm talking about above your bare-bones household take-home is that cash flow plus selling off stuff. You need to be clear of debt in three years, which means you're probably selling some trucks.

I set up a plan based on what you're saying that gets me there in two. Okay. All right. But, you know, the toughest thing for me is just the cash flow. So would you say not to take a loan? No, we're not taking a loan. You can't get out of debt while you're taking a loan. Yeah.

You have to cash flow plan to be able to cover keeping your business open and your minimum budget at home. Those are cash flow planning things. You set the money back for those two things. And then above that, every bit of the profit goes for debt reduction. So you really can't do it in two years. The numbers you're giving me don't allow you to do it in two years. You don't have $200,000 a year coming in.

How are you going to pay off $400,000 grand in two years unless you're selling one of those big pieces of equipment in your plan which might not be a bad idea but some combination of cash flow and selling stuff i'm getting free if i'm you you're not having fun Okay, I need you to listen to this. When you're on Wi-Fi anywhere in public or at home, you're at risk of hackers easily seeing every site you visit and search that you're doing online. It doesn't matter if you're on your cell or laptop. Public Wi-Fi is a hacker's paradise.

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Good afternoon, Dave. Thanks for having me on here. How are you? Better than I deserve. How can I help? First of all, I'd like to wish a happy birthday to my mother-in-law, who's also part of the Ramsey community. Hope you don't mind me saying that. I have a question for you. My wife and I are on baby step three right now. We do currently have three months in an emergency fund. We wanted to get advice from you. Should we simultaneously build from three months to six months in our emergency fund and invest 15% to our retirement, or should we go ahead and build up to six months and start investing after that? If you want six months, if you think you need six months, then I would do that before I start

investing. Okay. I mean, we both have secure jobs for great companies. God will allow them to be, I guess. How much is in there with three months? $10,000. Okay. And, well, what can happen oftentimes is you get on further down into your baby steps, and then you'll just start building some wealth that is outside retirement and outside of your emergency fund that actually acts as your other backstop.

In other words, the only liquidity I have is not just a three to six months of expenses emergency fund. Obviously, I've got other investments that are non-retirement, and that's the direction. So, you know, it's okay. If you're comfortable with three, then you can just stop at three for now and worry about adding some extra investments or some extra savings later on after you get out of baby step six at seven and all that. But the trick is just to be ready if it rains.

You need an umbrella. And so what are you comfortable with? Phil is with us in Michigan. Hi, Phil. Welcome to the Dave Ramsey Show. Thank you, Dave. Nice to talk with you, man. I kind of feel like I know you, listening to your podcast and listening to the advice you give and everybody.

You do. It's just me. How can I help today? So just to put it in a nutshell, I'm self-employed, so my income varies from year to year. Sure. So it's very difficult. I'm in sales, so I get a commission and, uh, very difficult to budget.

We've been doing great. We have everything paid off. Uh, my wife and I, except for our home, we owe $80,000 on our house and, um, our house payments only like 400 bucks a month. We got a, I got a smoking good interest rate when, when the market was right. So, um, however, recently, like two years ago, she developed what's called a cerebral spinal fluid leak. And, um, so she haven't worked for over two years now. She does have,

we went through the whole process. She has an incredible employer. And actually as of right now, she's actually still on the books as being employed, which I just think is a blessing from God that they would go two years and keep her job for her. So she's gotten short-term disability and long-term disability. We're now in the process of applying for social security disability. But the issue is she's 34 years old, and that's very difficult to get. Even though it's supposed to go on her function, they kind of look at her age, and it's kind of difficult to get the government to want to pay for something that long.

So a couple questions that I have for you is, number one, what's a good idea to try to have some sort of a consistent budget. And then number two, um, I've got probably about $20,000 in, um, in investments with this, this investor guy of ours. He's a, he's a wealth management investor and he invests in mutual funds and all these different things. But basically what he does is he coordinates with my life insurance policy. He coordinates with my tax lady. He coordinates with any legal issues that I've got going on or any – I've got a daughter who's a sophomore in college.

So we tell him that we're going to maybe have a wedding coming up and hopefully never, but we want to be able to put some money towards that wedding. And he just kind of coordinates all of those things for us. We had probably around $40,000, but in the last couple of years, we've taken out $20,000 of it just to help pay for her medical bills. We've been very healthy. So what's your question, Phil? How do I save for retirement, and how do I get a budget that's with a fluctuating income? Okay.

So in the last five years, what was your best year of income and your worst year of income? Best year of income would have been probably 260, and the worst year would have been 40. You really made $40,000? Yeah. Okay. What happened? So as a distributor, I have different product lines that I sell to doctors and hospitals. What happened? And when those, I lost some of those product lines. They sold to other companies or I'm unable to carry them now. How long, how often does that kind of thing happen?

I have 12 different product lines, so it's basically happening all the time, but I also have other product lines to pick up the slack. And about two years ago when this whole thing started with my wife, we just had a mass exodus of product lines. So that was my worst year. Okay. All right. Well, I mean, so what I would do is just monthly look into the future for one month and say,

what is my worst case scenario in the coming 30 days? And that we can predict fairly accurately. And you say, you know, my worst case scenario in the coming 30 days is 15,000, probably going to be more like 25, but my worst case scenario in the coming 30 days is $15,000, probably going to be more like $25,000, but my worst case is $15,000. Okay? Whatever the number is. I'm just making that up. Based on your worst case, you run down a normal budget.

In other words, you take your worst case, say, in the coming 30 days, I can accurately predict that I'm absolutely going to have $12,000, $15,000, whatever it is. Sounds like that number is realistic in your situation. Then in that case, you would do a regular budget as if you were on salary for that amount for this coming 30 days. Then you, in addition to that, you make a list of other things that you want to do or need to do that did not make the cut in that first round. In other words, I'd like to build this emergency fund up. I'd like to do some more retirement money. I'd like to do this or that.

I'd like to set aside some money for a wedding. I'd like to set aside some money for a wedding. I'd like to do whatever. And then any additional money, and then you make a list of the things that didn't make the cut. You prioritize those and say the most important one of these is number one. The second most important is number two. The third most important is number three. And then when money comes in above that $12,000 or that $15,000, you use that money right down that list of priorities. Number one gets all of it until it's done.

Number two gets all of it until it's done. And so we'll use, say, $12,000 was our baseline. We did a budget on $12,000, and we ended up making $18,000. So you got another $6,000, and you go down that list from one to whatever until you use up the $6,000. And that's called a prioritized spending plan. That's a form. The irregular income planning sheet is a form in the back of the financial peace materials

or in the back of the total money makeover book. It's all over the place online. It's a form we developed years ago. Now, sometimes people use the every dollar budget, and what they do is they just reset their budget as their income comes in above their baseline. But they set the initial thing up as a baseline, and then if they get that extra $6,000 in, they just make adjustments in their every dollar app to get on through and to make that happen. So, hey, good question. Thank you for joining us.

This is The Dave Ramsey Show. Thank you. our scripture today Colossians 3 23 24 whatever you do work heartily as for the Lord and not for men knowing that from the Lord you will receive the inheritance as your reward, you are serving the Lord Christ.

Calvin Coolidge said, All growth depends upon activity. There is no development, physically or intellectually, without effort, and effort means work. Nick is with us in Kentucky. Hi, Nick. Welcome to the Dave Ramsey Show. Hey, Dave. Thanks a lot for having me on. I feel like we've got a perfect segue

from that passage of Scripture you just read. Absolutely. How can I help? My wife and I are on Baby Step 3B and we feel that we've been called very recently to move about 100 miles away to Louisville, Kentucky, to plant a church or help plant a church. We have about four to six months before we need to actually make the move, and that's a lot of time to familiarize ourselves with the area.

We currently own our own home, and we have a, well, conservative, a good amount of money in equity and enough saved up that we'd be able to hit that 20% down on a 15-year fixed. We'd like to buy but are unfamiliar currently with the area, and we're just reluctant to rent and suffer that loss of possible savings for that lease period. I'm just curious about what you would recommend. When you're planning the church, are you going to be bivocational? Are you going to be working while you're pastoring? Yeah, so we're just assisting with the plant.

We would be moving in support of the church plant. And so, yeah, my wife and I would continue to work. Oh, okay. So this is simply a move, then the, uh, really, but the reason for the move is the plant. Okay. Yes. All right. And so you're going to sell your house, put 20% down a 15 year fixed where the payments no more than a fourth of your take-home pay and you're going to move to Louisville. Yes, sir. And I ain't problem with that. Didn't know if you would, if you prefer with a move like that in front of the area that we should rent for a while.

I mean, you're not that far away, and you've got several months to go over there and do some investigation. It's not the end of the world at rent if you rent for six months and learn the area. I mean, I would just want to get real comfortable with the area before I did buy, but you're close enough and you've got some time that you probably can familiarize yourself by looking and spending time over there, you know, shopping these markets and learn where the invisible lines are, which you want to learn in any town. The invisible lines are when you go across that road, property values go up or down. And that's true in every town. It's true with almost every road. So, you know, you're the

other side of the tracks in a good way or a bad way in, you know, all over town. And you want to get the vibe of that and the feel of that so that you don't, uh, you know, drive across the road, buy a property and feel like you've got a deal. Cause it was like the one on the other side of the road, you know, and it's not necessarily a deal then. So that that's just the thing you want to learn. And a good real estate agent, one of our ELPs can familiarize you with that. And you can go over there and look at properties, get the valuations down, figure out which of these areas, you know, if you've got school system issues or whatever it is, I don't mind you buying. I do mind you just going in there blind and just buying something, but you've got time to go over there and make several trips.

You're close enough to make several trips and learn the market, and I would. And then I would go ahead and make the purchase if I were in your situation, as long as you familiarize yourself with the market. That's the plan. Ashley's with us in Ohio. Hey, Ashley, welcome to the Dave Ramsey Show. Thank you, Dave. It's an honor to speak with you. You too.

What's up? So my husband and I have two kids, ages 5 and 2. Our in-laws are everyday millionaires, and they put our kids up with their own 529 plan and they put ten thousand dollars each in both accounts wow said and done that's all their contributions and they keep saying they have more than enough money for us to go and send them off to college for my husband and i would like to know what should we aim for as a fully funded 529 account for both children well you would uh want to figure out what your target is as far as where they're going to go to school try to calculate what it's going to cost to go to school there for a five-year-old 13 years from now

and so you know they're going to go to, you know, the University of Ohio, Ohio State University, where are they going to go? And, you know, try to get some estimates on what that's going to cost at that time. And then you take that figure and say, I've got 13 years for the money to grow for a five-year-old to that level, right? Right. And your SmartVestor Pro can put that into a calculator, a financial calculator, or you can jump online with a financial calculator and say, all right, how much lump sum do I need today for 13 years from now at my investment rate in my mutual funds for it to grow to X. So I've got X for tuition.

And, you know, the formula will spit it out of a financial calculator in about 30 seconds. But, you know, you've got to determine what your target is. We know you've got 13 years. If you're using good mutual funds, we know you're going to make 10% to 12%. If you watch what you're doing and you're purchasing mutual funds from a smart investor pro and you're learning how to do investing that buying mutual funds that exceed the s&p and there's plenty of them that do and if you do all of that then your target is there and then you're gonna you know you will have funded enough in the 529 for them to pay for it. And that tells you. The $10,000 is probably, for the little one, is probably almost that.

For the 5-year-old, maybe not. May need a little bit more. But that depends on, you know, are you going to pay for graduate school or are you willing to pay for private school versus in-state tuition for Ohio State? You know, and Ohio State's not one of the cheaper in-state tuitions either. So they're, you know, they're not outrageous, but they're not like the cheapest state school in America or anything. So check all that out and figure out where you are, and that's what I would do. That's how you do it. Sit down with your SmartVestor Pro.

They can work you into that number pretty quickly. Sam's with us in New York. Hey, Sam, welcome to the Dave Ramsey Show. Hi, how are you? Thank you for taking my call. Sure, what's up? Yeah, my question is like this. I just started a total money makeover,

and I read about the whole life insurance. Now, my grandfather, he's a financial advisor ready for six years, very successful. And he sold me a whole life and two terms to cover everything. He just told me lately that I made on my mutual funds that he also, he's selling, I mean, I bought from him and I made 18% this year. So I asked them, why do I have a whole life, which is making nothing on the investments after I read your book? I understand that. Um, and here I'm making 18% one.

I just get rid of that and put the money into investments like you recommend. Yeah. So he explained to me that, uh, investments, the mutual funds that protects me when the market goes high so I can make that money. But when the market goes low, and there are times that it does, I need a protection. And that's the whole life insurance that they promise every year a certain amount, and they're never going to go below that, and they're going to give that to me every year.

So when the market goes down, I have that protection. So there I got stuck. Like, what do I tell them now? Well, I mean, you've got to decide if you're going to argue with your grandpa or not. That's part of the decision. You know, I don't know if you're going to do that or not. I'm not going to argue, but I know he means my best. He's not trying to tell me.

There's a lot of people that mean best and are wrong. Okay. And that's the case with him. No, you don't use whole life life insurance as a hedge, as a backup for a market downturn. If you want to keep some liquidity, you put it in cash in a money market account, and that way when you die, you don't lose the money. The money that's tied up in the whole life cash value, when you die, you lose it. You've paid extra to have that in there, and you don't get it.

You only get the face value when you die. you've paid extra to have that in there, and you don't get it. You only get the face value when you die. So, no, it is not a good backstop. He is very old school. He comes out of the insurance business is the background he comes out of, and that's the only people that believe that stuff anymore. So, dude, you've got to do what you want to do. I'm not going to tell you to argue with your grandpa, but he's wrong. That simple.

That puts this hour of the Dave Ramsey Show in the books. Our thanks to James Childs, our producer. Kelly Daniels, our associate producer and phone screener. I am Dave Ramsey, your host. 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 guys, it's Blake Thompson,

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