The Ramsey Show - App - FICO Is the Name of a Dog Chasing Its Tail! (Hour 2)

Episode Date: November 13, 2019

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Music Music 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. You jump in, we'll talk about your life and your money. Open phones at 888-825-5225. That's 888-825-5225. Utah's calling. Marita's on the line. Hi, Marita.

How are you? Hello, Dave Ramsey. I am good. Thank you. Thanks so much for taking my call and for all you do for everybody. We're on board and we're ready to follow your steps. I'm honored. How can I help today? Is it okay to hold on to our $9,000 savings while on step two? It's okay to do anything. You're an adult. But it's not what we teach. Why would you do that? Just in fear of just in case of an emergency,

we just bought this home on an FHA loan just barely in July of this year. How much debt do you have not counting the home? Not counting the home, we're at $122,846. What's that on? That would be Best Buy, which is $397,000. Home Depot, $457,000. No, I mean, what's the big pieces? Yeah, like a $100,000 student loan or something?

No, we have a car loan of 24,263 there's a pension loan from my husband's company for 24,, there was a situation back in 98. You know, I did some time, you know, for that crime. So you had some restitution you're paying off? Yes, sir. Okay, cool. And so that's 50, that's 85, those three are 85 of your 123. What's your household income? My husband makes 90-ish, yeah, that's a net.

Do you work outside the home? Me, I just barely started a part-time job, and that will bring me $10,000. And it's because I've been a home mom for a long time. Now our children are in school. And I found you on YouTube just that recent time after buying a house. Yeah. I think that was God. And that's why.

Thank you. This is good. So how long have you been out? What does that mean? You said you did some time, right? Yes, sir. In 98. Oh, good. A long time.

A long time. Good. Yes. And, you know. So you have a whole new life now, right? Yes, sir. Wonderful. That's wonderful.

Good for you. And I did a paralegal degree, so I just graduated. I did a two-year program. Good. And I'm not, yes, I think I'm still needing to learn more, you know, gain more knowledge. I think you'd be real valuable in a defense attorney's office as a paralegal yes sir and you've got you got some chops girl you know you know the you know the ropes uh i think this is yeah this is great it's a great time of your life well we teach people to be down to one

thousand dollars in baby step one and apply the money to the rest of it stop the borrowing be on a budget together i think you've got the opportunity to raise your income part-time up to 30 000 if you is your pair if your paralegal stuff still working and you can do it in utah you just got to get you got to get your foot in the door somewhere it may take you a little bit of time to get there but i don't think you've even got to work 40 hours to do that um and i think you've probably got some uh something to go along with your academic knowledge and that's called wisdom and wisdom comes from experience i mean i think you know some stuff right

yes you've been some places you've seen some things you know so and i think that's you know it's a horrible thing that that is in the rearview, but it's also a richness of your future, potentially. So I think you've got the opportunity to serve some people in that way. But, yeah, let's get the income up. Let's get on a tight budget. And, yeah, I would take you back down to baby step one. And I want to be part of you guys helping to turn this around. I'm going to put you through Financial Peace University as our gift at no charge, okay? Oh, I really appreciate that. Thank you so much. Sure, my pleasure. You hold on.

You get your husband to go to class with you now. The two of you go, and let's get those paralegal hours up. I think you're more valuable than you think you are, and I want to see you make some more money, because you need some more to attack these debts. And you may need to sell a $24,000 car. It might be stupid. It's pretty close to stupid. It's not all the way over there, but you're in the middle of a mess here. And it's an awfully expensive car. And it's 20% of your total debt.

So it's something to think about. And you've got a lot of debt. But anyway, let's jump on this. We'll show you how to do every bit of it in financial peace university kelly will pick up and we'll get you signed up all right uh jordan is with us in michigan hey jordan how are you babe i'm doing better than i deserve how are you sir same sir how can i help well i just want to let you know i really appreciate um all you and uh your whole team does uh i've been following you for a long time and really revere you and all the biblical wisdom you have on finance.

So I really appreciate that. It's been an immense blessing. Thank you. Very kind. How can I help today? Yes, sir. My question is I'm a father of two infant babies, and I'm wondering if you could lend me some advice on some specific investment

opportunities for their college. I know there's the 529 and so on and so forth, but just wanted to kind of see what advice you had as far as preparing for their college. Because I know how much college costs right now being not that far out myself. And thankfully the military is paying for my loans, but I know that's not always the case and it's a personal decision. So I wanted to just ask. I'm scared to think what it's going to be 18 years from now, but just prepare as much as possible. Sure. Well, thank you for your service.

And as you're walking up the baby steps, when you get to baby step five, you've got your investing going. You're out of debt. You have your emergency fund in place. It's time to start investing for the kids' college. And I would suggest using a 529 and a good growth stock mutual fund, a mutual fund that's been open a long time. And you can put most 529s allow you to put up to $10,000 a year in. You're probably not going to put that much in. You can set it up with SmartVestor Pro to come out monthly out of your checking account and go straight in there.

And you can set it up for $100 a month. You can set it up for $200 a month. You can do whatever you want to do. Now the 529 that you want to select always, there's a bunch of different kinds. There's only one kind that's good. And it's the one where you control the investments. They don't move automatically based on the age of the child. They're not fixed or locked in. You pick a mutual fund.

If you don't like it, you can pick a different mutual fund in there later and move it all inside of it. You control the investments. You move them. You don't move them. They don't move without you. You control the investments in the 529 and if you talk to one of our smart investor pros by clicking smart investor at DaveRamsey.com these are the people we recommend they'll thought it was worth talking about again.

It was from a wife looking for life insurance for her family. She asked why I only recommend term life insurance instead of cash value plans like whole life. I usually explain how you overpay for coverage, earn a horrible rate of interest, and don't get your cash value when you die. But this time, I just had her go straight to Zander.com and get a rate. And then we compared that rate to the whole life plan, and she immediately saw the huge savings. She realized all the things she could do with that money, like paying down debt, investing in a smarter way. That made it real for her. It makes no sense to buy or keep a cash value plan when there are smarter, less expensive ways to protect your family.

That's why I suggest that everyone go to Zander.com or call them at 800-356-4282 and get a free quote. That's Zander.com or 800-356-4282. Thank you for joining us, America. This is the Dave Ramsey Show. Open phones at 888-825-5225. That's 888-825-5225. Landon is with us in Tennessee. Hi, Landon. How are you?

Hi, I'm doing good, Dave. I sure appreciate you taking my call. My honor, sir. How can I help? So, I'm just trying to figure out the only debt that I have is my house. I owe $140 on it, and I'm wondering am I going to be better off

20 years from now if I attack my house as if it was consumer debt, or should I just stick to the plan and invest the 15%? Because my problem is that it really kind of drives me crazy to owe anybody on the house. That's wonderful. And so if I can't, if it will work out for me better to just attack it and get it paid off in two or three years, you know, I'd rather do that. What's your household income?

Right now, take-home is about $65,000, but in the next year I go up to about take-home to about $100,000. Okay. All right. And so $15,000 a year is what we're talking about, and that only costs you about a year on paying off your house. It doesn't really make that much difference like it feels like it does to you. And so I would stick with a plan, putting 15% of your household income away in retirement in good growth stock mutual funds. Have you got kids?

No, sir. Okay, then you don't have to worry about kids' college, right? You don't have to worry about kids' college, right? You don't have to worry about kids' college. So then we'll just put everything else we can get our hands on on the house. And making $100,000, you're going to pay off $140,000 really fast, even putting 15% away. And it doesn't change it that much by not doing it. And I just, I want you at your young age to get, you know, to get the advantage of those investments starting to build. All of our data points say in studying the 10,000 millionaires that we studied for Chris Hogan's book, Everyday Millionaires, that the typical millionaire pays off their home in 10.2 years and they have two primary areas of their balance sheet that show up that make them millionaires, a paid-for home and a steady, constant investing in a 401K and Roth IRAs

since they were young. And they'll have $700,000, $800,000 in their 401K, half-million-dollar house paid for, and that's right where you're going to be in five years. That's where you're going to be sitting. And maybe seven years, something like that, in terms of the $700,000 or $800,000. I don't know what's in your 401K, but you're making $100,000. You'll be there before you know it.

You're going to be just fine. And the good news is that the fact that this drives you a little crazy, that's a good thing. It means you're going to stay on bead. You're going to stay on point. You're not going to veer off and go to stupid land and go do something crazy. You're just going to stay with it, and you're going to get it knocked out. And so that's just really good news.

Well done, man. Well done. Open phones at 888-825-5225. If you want to check the kids off your Christmas list before Thanksgiving, I doubt you can do that completely, but we can get one of the two of the gifts off. And you can shop our kids sale right now and save up to 63% on your kids stuff at DaveRamsey.com.

Financial Peace Junior is only $18.99. It has all the tools to teach your kids how to make smart decisions. And you can upgrade to the best-selling kids bundle, the Adventure Pack, for only $45.99. It includes the fun educational storybooks plus the tools and activities that your kids love. We've got the Teen Entrepreneur Toolbox to help your teens start their own business.

It has everything your teen needs to start making money and learn the skills that they'll need in the real world. Go to DaveRamsey.com or call the Ramsey Concierge Team at 888-22-PIECE, 888-227-3223. Shop the kids sale. Logan is with us in Texas. Hey, Logan, how are you? I'm good, Dave.

How are you today? Better than I deserve. What's up? Well, we just kind of realized, oh, probably about a month and a half ago, that we had been doing Dave-ish for too long and kind of got gung-ho and finally got gazelle intense. And in doing so, I kind of seek the advice of my dad and father-in-law, who's actually a pastor as well, wanted to kind of get your intake and input on something that they told me about a truck that I have. The truck is a 2008 Toyota Tundra that is, I think we owe right now, right at $19,000 on it.

I think that at Kelley Blue Books for private sale, right at $17,000. It is not the next step in our baby step, but I'm just trying to decide what I need to do with it. If I need to sell it or try to just hold on to it because it's a good, reliable truck. What's your household income? It's currently $63,000. In May, it will go up to $73,000. And what's the other car that you have worth?

The other car is probably worth $1,000. It's our hoopty. Okay. And do you have any other vehicles? No, sir. Okay. And how much of debt do you have, not counting your house total? You have 19 on the truck.

And what else? Yeah, that's right. Unfortunately, right now, it's totaling right at about 100. That's $70,000 in student loan debt. The truck, I have a mower that I financed to start a mowing business thinking that that was going to be a good plan that'd be a vehicle right there yeah what do you owe on the mower um 3200 your mower is nicer than your second car yes yes you are you are correct are you mowing are you using it are you making any money with it

i actually was on my way right now to go to go and do a couple extra mowings before uh before the so what are you making a year with the mower um so i only did it i started this year with it um and so what'd you make this year i ended up making probably about fifty five hundred dollars you didn't use it much i didn't no that's right okay you need to sell it okay because you're not using it. Yes. Okay. And so that gets rid of that debt. Now, the rule of thumb I use on vehicles is if all of your vehicles added together equals more than half your annual income, then you've got too much tied up in things that go down in value. You're close, but you're not there uh especially with your raise coming up um the

second rule of thumb i use is can you be debt free within two years except your home if you live on a beans and rice rice and beans budget and um and if not is the car the reason? And this one's on the bubble. The truck's on the bubble then. Yes, sir. Okay, so can you pay off $50,000, making the kind of money you're making, a year for two years? That's beans and rice, and that's picking up some kind of extra job, right? Yes, sir. And I actually have my real estate license, and so I'm currently tied up in another schooling for my full-time job. And so as soon as that frees up my time, then I will be getting back into real estate.

Okay. And that's going to be my side hustle. Well, after your raise, you're supposed to be making how much again? Right at 73. Yeah. And paying off 50 a year out of that it's not gonna work no sir so if the truck allows you to do that i might sell the truck or if you gave you you know if you can make 20 30 000 doing real estate a year

part-time which you probably can do if you hustle uh then the truck might be a keeper it's borderline but um the bottom line is if you got rid of the truck you could be out of debt in two years because that changes the formula to 35 000 or 30 or i'm sorry 40 000 a year rather than 50 000 a year yes sir so it's yeah it's more doable then and and it's it's not a crazy it's not like if the truck was 20 000 i would i mean if the truck was $20,000, I would, I mean, if the truck was $40,000, $30,000, I'd just instantly say sell it in this scenario because it'd be too high a percentage of your income and it'd be the problem with your situation. But the problem with your situation is you just haven't gotten started good on it yet. And so I'm going to keep it for right now and I'm going to tack into this.

And if you look up and realize it's the blocker, then you can cut it loose later. This is the Dave Ramsey Show. We'll be right back. In the lobby of Ramsey Solutions on the debt-free stage, Austin and Ashley are with us. Hey, guys, how are you? Good, how are you? Better than I deserve. Welcome. Where do you all live? Jerome, Idaho.

Oh, cool. Well, good to have you. Welcome. Appreciate you being all the way over here to do your debt-free scream. So tell us about it. How much did you pay off? We paid off $96,000 in 22 months. Good for you.

And your range of income during that time? We started about $72,000, got all the way up to about $98,000, and then dropped down back to $81,000. What do you guys do for a living? I farm with my dad and my brother. And I'm an account manager for a dairy company. Cool. Yeah. Cool.

So did you guys pick up extra work to get out of this? Not necessarily. It was kind of promotions and, you know, a budget and you find that extra money. It's like getting a raise, you know, like you say. And then we had a baby. Oh, well, there's that. That's wonderful. Good.

So what kind of debt was the 96? There was three vehicles and some student loan debt. Cool. Did you sell anything big? We did. We sold one of the vehicles because we didn't need three, obviously. What did you sell? The Ford Fusion, my car.

Ah, okay. Your car got some. Yeah. All right. Cool. Very good. So what got you guys started on this 22 months ago? Well, you know, I spent a lot of time in the tractor, obviously, and I had Sirius XM in

the radio, obviously, and so I was listening and flipping through the channels because you get so bored in the tractor sometimes and i found your station on there somehow and so i started listening and i don't know it's three or four hours i listened to a whole show of yours one day and it just got my mind going and i went home and spilled it all on her of course of course yeah let her know this is what we're gonna go do and blah blah blah and yeah and then you can't listen to the radio on the track pretty much pretty much but she didn't oppose it she was on board and you know i explained everything and we had had bits and pieces that

we'd learned from your book and stuff in the past and then uh you know she jumped on board and we really got into it and went through the book together and just attacked it. Wow. Very cool. How long have you guys been married? We'll be on our fifth year in July. Okay. Cool.

Very cool. So what was the hardest part of paying off $96,000 in 22 months? I would say it was probably being strict with our money. And, you know, when the money for that budget ran out, we didn't spend. Yeah, it's tough to stick to that. Like, oh, I just need to go buy this. I have to, right? I have to.

And then there's no money left. We can't do that. But we were strict on it. And, you know, another hard part about that was getting rid of the vehicles. I'm a car guy, truck guy. I love them. And so getting rid of those vehicles was difficult. But we did it.

So you got rid of more than one vehicle? No, sorry, just the one vehicle. Just the one. So what did the Fusion sell for? Oh, I think $14,000. Yeah. All right. And we owed like $9,000 on it or something like that.

So that freed up a little money to fill out the other stuff. Yeah. What was the biggest debt? That would be probably my truck. Okay. Yeah. What did you owe on your truck? $35,000.

Yeah. Nice truck. Yeah. All right. So we got that cleared up. Cool. And that leaves Ashley driving what? So we had the three.

We had another truck. It was another F-150 that she drives, and she still has that. Okay. Actually, my truck now we're planning to sell soon so that we can build a house. Oh, okay. Yeah. Use that money to go in a different direction that's going up in value. Yeah.

Put it down. Definitely. Definitely. Figured that was smarter. Very good. Good for you guys. Thank you. So how does it feel? It in value. Yeah, definitely. Figured that was smarter. Very good. Good for you guys. Thank you. So how does it feel?

Feels great. It's awesome. It's a huge relief. It's, I don't know, it's just nice not to have to worry about money and just to be comfortable. What do you tell people the key to getting out of debt is? I mean, you paid off almost $100,000 in debt. How old are you two?

28. Yeah. Yeah. 28. Yeah. Yeah. Yeah. Yeah. I'd say you have to stick to the budget. I mean, that budget is your guideline. It's, I mean, follow the plan.

Know your numbers. We talked, what was it, weekly? We would talk weekly until we really got it down. We would go over it. And it actually became enjoyable where we'd go over stuff over and over and sit and have a meeting. We knew our numbers, and we followed those numbers, and it got us to where we wanted to be. It becomes a game, doesn't it?

It does, yeah. How fast can we do this? Oh, I found some money here. Let me just throw that here. Let's do it. He's always wanted to be gazelle intense. Once you've got the emotional momentum, it goes. Yep.

That's powerful. Exactly. Very cool. Who were your biggest cheerleaders outside the two of you? I'd say our families definitely supported us and encouraged us. They definitely did. We were quiet, though. We were very quiet about it.

Not everybody knew what we were doing until the tail end of it where we were almost out because we were kind of excited to be driving a paid off truck. That's about when we started to be a little bit more boastful. Alright, good for you. Well done you guys. We're proud of you. Got a copy of Chris Hogan's book for you

Everyday Millionaires and that's the next chapter in your story. You are on your way. 28 years old. You got this stuff figured out. Way to go. Proud of you. And you brought the new baby with you are on your way. 28 years old, you got this stuff figured out. Way to go. Proud of you. And you brought the new baby with you? Yes, we did.

And what is her names and ages? This is Adeline. She's 13 months old. 13-month-old Adeline. Oh, cute. How fun. Nice long trip for her over here, huh? Definitely was, yeah.

I love it. Well, good for you guys. Austin Ashley Adlin from Idaho. $96,000 paid off in 22 months at 28 years old, making $72,000 to $98,000 to $81,000. Count it down. Let's hear a debt-free scream. Three, two, one. We're debt free! Love it!

Way to go, you guys. Very well done. Proud of you. Wow. Excellent, excellent stuff. Man, that's fun. Very cool. Brooklyn is on YouTube.

How can I build my credit history? When I got my car and they said my score was great But they denied the loan because of a lack of history Well Brooklyn, you're asking the wrong question You should be asking how can I become wealthy? Because building your credit history does not make you wealthy. It makes you able to buy things that you don't have the money for to impress people you don't even really like. The only way your credit history is built is if you borrow money and pay it back so

that you have the opportunity to borrow money and pay it back so that you have the opportunity to borrow money and pay it back so that you have the opportunity to borrow money and pay it back fico is the name of a dog that chases its tail woof woof you're borrowing money so you have the opportunity to borrow money so you have the opportunity to borrow money all your fico dog says woof woof is i just gave a bunch of money to a bank for a number that only means i played kissy face with them it does not mean you're wealthy none of your fico score has anything to do with your net worth none of your fico score has anything to do with your net worth. None of your FICO score has anything to do with your 401k balance. None of your FICO score has anything to do with having an emergency fund. None of your FICO score has anything to do with doing a budget.

None of your FICO score has anything to do with having a paid-for house. None of your FICO score has anything to do with your income. If someone gives you $10 million and you simply put the $10 million in investments, your FICO score won't change one dime. You're a 10 millionaire instantly when that happens. Your FICO score doesn't change one point. Unless you use it to pay off debt or get into debt with. FICO score is all about interacting with debt.

So when you got your car and they said my FICO score was great, you should have said, oh God, I'm sorry, you shouldn't have checked my FICO score because I'm paying cash. If the car dealer compliments your FICO score, this is not a good sign. If broke people are making fun of your financial plan, this is a good sign. This is the Dave Ramsey Show. Thank you. Thanks for joining us, America. This is the Dave Ramsey Show. Mark is with us in Illinois. Hey, Mark, welcome to the Dave Ramsey Show.

Hey, Dave. Thank you so much for taking my call. My pleasure. Honored to talk to you. Okay, cool. How can I help? Yeah, so I got a question for you, a sell or not to sell. I bought some properties about four years ago for $275,000, and I put about $320,000 in them.

So I owe about $600,000. We just had a person come up to us and ask if they wanted to buy these properties for $1.3 million now. So that's my dilemma. We're, we're wondering if we should sell or if we should keep these for what we're having paid off in seven years is the plan. Um, but we'll be bringing in about $14,000 a month if I keep them, you know? So it's like, should I just get the payout now and be out of debt or should we, uh, wait and, uh, you wait and be making a lot more money in the future? Do you have any other debt? We got married two years ago, me and my wife, and we have one kid. We paid off $92,000, paid off all the cars, paid off student loans.

Great. Do you have any other debt? We do have one student loan of $100,000, a college loan. What's your household income? I do mining, so I have a $65,000 a year for that. Okay. And the business income is about $150,000 a year. Profit. Profit, yeah.

So your household income taxable is 210 uh yeah my business is llc so it is uh no i'm talking about your household income your profit the llc is 100 pass through it is taxable income what profit does it make what do you pay taxes on in your house a year uh 65 000 no all right so it's both then it's the my business is 150 i pay taxes on that i just don't take an income from my business because i'm putting all back into the business why uh well just to help it grow over the last few years to pay the debt off after i'm paying more down on the debt, what I owe to the bank. Is this the business that is the property?

Yes. Oh, so that you're talking about, that makes you a profit of $150,000 a year, and you've been using that to reduce the debt on the property. Correct. $150,000 a year, and you've been using that to reduce the debt on the property. Correct. And fixing any of the problems that happen, but I don't take any money from that yet. We live here on the property, so it pays my expenses, but there's 12 apartment buildings that we have rented out. Well, it's 12 apartments, yeah.

Okay. So here's a business lesson. Your income for your home, the good that the business does you, is the net profit of the business. So it's the gross rents collected minus the expenses of operating the properties is your net profit. Okay. And so $150,000 is not correct because you have expenses to operate the property. $150,000 is

your gross receipts. My gross, yes. Yeah. I'm sorry. That's okay. Minus your expenses that you have out of that, and your debt payment is not an expense out of that, but it is a cash flow item out of that. So, you just got to start getting that part right, because I'm

trying to figure out how you're going to pay off this $100,000 in student loan debt. Right. And that start getting that part right because i'm trying to figure out how you're gonna pay off this hundred grand in student loan debt right and that's what i'm after i'm trying to figure out how to do that i would do that now as far as this apartment you live in it it sounds like you've made obviously a really good investment uh in the purchase and in the renovations because your return your return is amazingly excellent going from $600 to $1.3 million. Now, so the next question is that property is sitting there for $1.3 million on the market. Would you want to buy it because it's going to be such a good long-term investment if you didn't own it? Yeah, that was my plan from the beginning this is my retirement plan kind of you know it really i wouldn't i wouldn't want it to be your retirement

plan i'd want to be part of your wealth building plan yeah and it worked you made some good wealth on it and it's going to cash flow like a bandit and we can get it paid off and get your student loan paid off in just a matter of years and you're going to be in really really good shape i'd keep it yeah yeah i just keep it that's always so good to hear you say that uh and we're planning to pay off the student loans in less than two years with what i make now um if not sooner you know we paid off 92 000 in in uh less than two years i would i would pay minimum payments on the real estate and throw all the cash at the student loans until the student loans are gone. Okay. That's awesome.

And then once they're gone, then I would turn around and get the real estate paid off, and let's just treat this whole thing on the baby steps. But you've done really, really well. Congratulations. It's an excellent, excellent purchase. Amanda is with us. Amanda is in Florida. Hi, Amanda. How are you? I'm good. How are you, Dave? Better than I deserve. What's up? I am wondering if we are not able to max out a Roth IRA. Does it make sense in the meantime

to use it as college savings for our children? No, your shoes are $529. I have my oldest son may not be able to take like the traditional college route and might need to do like some other kind of skills training, a certificate, something of that sort, or it might not be in the cards for him at all he has some special needs right but that's why i'm hesitant to do something that's that's more specific how many children do you have we have two 11 and six okay um i mean i would i would the first thing i do is get enough in a 529 in the two 529s to take care of the one child that we know is going to school. And then beyond that, you don't want to overfund it.

Just build a mutual fund up in your name. But I wouldn't use a retirement product to save for college. Okay. And even if we're not able to use it for retirement? Right. You are able to use it for retirement. I would not use a retirement product for college. You can always use it for retirement. Nothing keeping you from using a Roth for retirement. So, yeah, but let's load up those 529s until we get enough for the one college plus a little plus another 10 or 20,000 at least, and in a lot of places, depending on where he would take certifications and what kind of certifications we're talking about, you might be able to use the 529 for that.

And the good news is that's going to grow tax-free just like a Roth does. So I'm going to put that in mutual funds, and I'm going to use college planning products for college planning. I'm going to use retirement planning products for retirement planning. There's no magic to it. It's just that's what they're for, and stick to that, or you'll get yourself in a pinch, and I would not go there. Thanks for the call.

Open phones at 888-825-5225. You jump in. We'll talk about your life and your money. Isabel's on Facebook. My husband's 56 years old. He has no savings, no 401K, nothing to secure our future. Someone offered an annuity where we pay 150 a week no i like to know the difference between term insurance and an annuity an annuity is a

savings account with a life insurance company that sucks a fixed annuity you would never do there's a few places you'd do a variable annuity but you wouldn't do them when you're broke as you guys are he needs to buy term insurance on him to take care of you when he dies. And then you guys need to get on a budget and get yourself out of debt, get your emergency fund in place, and start your investing for your retirement. And it's 401K and Roth IRAs and so forth. But get online at Zander Insurance, Z-A-N-D-E-R, ZanderInsurance.com, or Zander.com even. And you can get a quick, easy quote there.

And as long as he's in decent health at 56, he can get a 10, maybe 15-year term policy on him. And during that time, you guys get yourself out of debt and build a nest egg to take care of you. But an annuity is not a good plan, not especially in this situation. A fixed annuity is never a good plan. It's basically CD rates inside of an insurance product. Just dumb. Don't do that ever. So now get with Xander.

Get you some term insurance. Take care of you if something happens. And then let's get your budget straightened out and start investing. Hey, we appreciate you following us on Facebook, Isabel. That puts us out of the day. Ramsey Show in the books. James Childs is our producer. Kelly Daniels, our associate producer and phone screener.

I am Dave Ramsey, your host, and we'll be back. We'll see you next time. on our YouTube channel. Catch the most watched Dave Rants, Deathly Screams, and the very popular Everyday Millionaire segment. Go to the Dave Rants Show YouTube channel and click subscribe.