The Ramsey Show - App - Find Fresh Energy for Life by Attacking Your Money Problems (Hour 2)

Episode Date: November 2, 2018

The show about you

🎵 Live from the headquarters of Ramsey Solutions, 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. It's a free call at 888-825-5225. That's 888-825-5225. You jump in and we'll talk about you right in front of you. Elizabeth starts off this hour. Manchester, New Hampshire. Hi, Elizabeth. Welcome to the Dave Ramsey Show. Hi, of you. Elizabeth starts off this hour. Manchester, New Hampshire.

Hi, Elizabeth. Welcome to the Dave Ramsey Show. Hi, thank you. Good. How can I help? Well, this is kind of a problem that goes way back. My husband and I bought our house about 11 years ago and probably paid too much for it at the time and also at the time planned that I would work.

I had a two-year-old at the time. And ten years ago, I had another son who has autism, so I have not been able to work. Although at the time, I was earning a good living and we thought between the two of us, we'd be able to move up the ladder, which we were on. And now we're at the point, I was trying to save some money, and I went to some other insurance companies and got better quotes, cheaper money. So I went with them, and, of course, they came out to check on the house, took pictures, and now we have a situation where the underwriter has, they failed their, discontinuing our insurance because of some safety hazards. My husband isn't good and he isn't handy at all. We've got some big trees over the house.

You know, some of the fascia boards around the edge of the roof are falling and rotted out. So we're at a point now where we have to really spend some money that we don't have. And I'm thinking, gee, do we want to spend money on a house that we really don't have the money to spend? My husband isn't handy, or am I? I really don't have much of a chance to go back to work right now because my son is only 10. Or should we bail at this point? Bail. You should have bailed 10.

You should have bailed eight years ago. Well, the only problem is we don't have a down payment to bail. And I heard you a couple calls ago about the rent. Well, your rent then. Because this house is killing you. And you're killing it. You do not have the money to even maintain the property that you live in. No. No.

It's killing you. Yeah. I mean, it was bought based on the fact you're working. You haven't worked in 11 years. No, I know. And it's just really difficult for me to get back to work. I'm not saying you need to go back to work. I'm saying you bought it based on a premise, based on a situation that didn't occur,

and then when that didn't occur is when you should have sold it. Yeah. You'd be in a lot better place right now if you sold that house 11 years ago. Yeah. Well, I wish we never bought it. We were renting before we bought it. You bought it based on you working. Yeah. Well, I wish we never bought it. We were renting before we bought it. Yeah, but you bought it based on you working. Yeah.

And you were planning to continue to work. You see what I'm saying? When that changed is when you should have sold it. And then you'd be in a lot better place today. So every day you wait, you are delaying the inevitable. Yeah. So you think just bail it. I know.

I know bail it. Yeah. Even if you have to rent for a little while and get back on your feet, because you're probably also running up debt because you're house poor. Oh, yeah, we're in deep debt. Yeah, and the reason is because by the time you pay the house payment, you've got no money left. Yeah.

You're in a house you can't afford. It owns you. Yeah. Because otherwise, unless you have a psychological problem you would not allow the house maintenance to go down as far as it has yeah no it's not it's just been a you know my husband's work working his tail off and the reason is you don't have any money yeah to fix the house if you had an extra five thousand dollars a month you would have paid a painter, a carpenter,

to come over and fix the house the first time that board came loose. But it's been hanging like that for two years. Right? Yep. This is called house poor. And I'm not picking on you. It's just you made the correct decision. I'm a mom.

I'm going to be with the autistic child. Boom. Great decision. Bad decision was keep the house that was based on me working yeah get out of there kiddo it's killing you you're gonna find so much fresh energy just being a renter for right now for a little while and get your rent get your debts cleaned up rent the cheapest thing you can rent that work for your family don't go rent some taj mahal okay rent something cheap and then clean up your debt the cheapest thing you can rent that will work for your family. Don't go rent some Taj Mahal, okay? Rent something cheap and then clean up your debt mess.

Because if you guys had a lower, a much lower house payment and had no debt payments, how much lower would your personal stress be? Hello? Oh, man. Yeah. This is where you need to go. This needs to be your new target. Not hanging on to a dream that died 11 years ago yeah it turned into a

nightmare it certainly has yeah so all i'm all i'm saying all i'm doing is saying back to you what you told me in the call yeah but you just need somebody else to say it to you yeah no that definitely enlightens me and makes me look at it in a different way. I appreciate it. And you're not a bad person, okay? Yeah. You did the right thing. Yeah. Baby's got autism. Mama's going to be with baby.

Ding, ding. That's what you're supposed to do. Yeah, it just didn't work out the way we kind of thought it would. The only mistake you made was you didn't sell the house right then. Yeah. And say, hey, our life changed, so we're going to change. We can't do this. And you didn't admit it.

Instead, you went into financial denial for 11 years, and that's going to cost you some money here. But, hey, you can turn it around now. I'll help you. You want to go through Financial Peace University and learn how to straighten this mess up? Yeah. I'll pay for it.

Yeah, I do. I'll pay for it if you want to go through. Really? Yeah. Yeah, I'd appreciate that. It's nine weeks long. Will you and your husband go if I give it to you for free? One night a week. Is it like Yeah. Yeah, I'd appreciate that. It's nine weeks long. Will you and your husband go if I give it to you for free? One night a week.

Is it like online? Yeah, I think you would. One night a week. Well, there's probably some in your area. Probably classes in your area. Well, hold on. Kelly will pick up, and we'll get you signed up for the class. We want to help you turn this around.

But you're going to have to address this head on because it's killing you. It's stolen your life away. And because you haven't made the proper decisions, you're kind of a financial denial thing going on. Hey, good question, and you're a good mom. Thanks for calling us. Open phones at 888-825-5225. Elena is on Facebook at Dave Ramsey, facebook.com slash Dave Ramsey. How do I know if a financial advisor is a good fit?

I always ask my wife after we met with them, how do you feel about them? I don't ask her, what do you think about them? Because she's got a real accurate feeler. She can feel. Does she feel like she trusts them? If I die, is she going to go running straight to them because she knows in her soul they'll take care of her? And teach her and guide her. Does she trust them?

Do they teach? Do you like them? Do you trust them? Do you like them? And do they teach? Do you trust them? Do you like them? And do they teach?

If any of those things isn't true, they don't need to be handling your money. Do you trust them? Do you like them? And do they teach? That's what all our SmartVestor pros are trained to do. They don't work for me, but in order to get my endorsement, they have to be the kind of people you can trust, the kind of people you're going to like, and they definitely have the heart of a teacher. We all have smartphones. Isn't it time for a smart plan? Pure Talk USA offers simply smarter wireless that covers 99% of Americans. Stop overpaying for wireless. Unlimited plans start We'll be right back. Pure Talk USA operates on the largest GSM network in the U.S. to ensure you're connected virtually anytime, anywhere.

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It's a free call at 888-825-5225. Jennifer is in Miami, Florida. Welcome to The Dave Ramsey Show, Jennifer. Hi, Dave. Thank you for taking my call. I'm debating, well, going back to school. I've been having these mediocre jobs that haven't really helped financially with the debt that we're in. And I just wanted to make sure that I was making the right decision based on all the debt we have and not being able to move forward as much as I've wanted to.

Okay. What are you going to do? Well, school wouldn't start until February. And I didn't want to get into debt going to school. So I'm using our tax refund to pay for my school. So that wouldn't be an additional debt. But we do have a lot of debt. How much debt do you have? We have $33,439.28 in credit cards, $3,642.34 in medical, $75,000 in student loans combined. That's a total of $1,012.81 with $1,012.82 in debt, not including our house. Okay. And what does your husband make a year?

He makes, without any overtime or anything, about $85,000. How much overtime does he usually get? Typically, lately, he's been getting a lot. He's averaged yearly about $100,000 total income adjusted. And what do you make now? Right now, his salary has been back the past three years. What do you make now? Right now, I don't make anything.

My last week of work was last week. It was actually costing us more for me to work because I was having to pay daycare and aftercare. We're a family of six. You have four kids. Okay. Yes, sir. And what is it you're wanting to study next year? Nursing. I have a year left technical school,

and then as a nurse where I'm looking to work that they hire LPNs, they would pay for me to finish my bachelor's, which would be only two semesters. Okay. So you need to pay for one year of technical to get your LPN. Right, which is what would qualify me to finish and not have to pay to finish it. Okay. And what will it cost to finish your LPN. Right, which is what would qualify me to finish and not have to pay to finish it. Okay. And what will it cost to finish your LPN? $5,000.

Total? Total. Okay. Oh, you have one semester left. Well, no, no. I have one year of LPN. Oh, one year. One year.

And then to finish the back. So how long will it take you to finish your technical? To finish completely, it would be a year and a half. The two semesters at the end, those can be done online while I'm actually working as a nurse. Okay. How long before you can complete your LPN and start working as a nurse? Exactly a year. I would begin Februarybruary 1st okay and you pay for the

first half of the year with the with the tax return and five thousand dollars would cover that whole year okay so you're going to pay for the whole thing with the tax return exactly that way that wouldn't be added to our debt okay good um and what did you what did you make at your last job a year a year i made 13 000 good lord okay yes uh you weren't working full-time then yes i was well that is a horrible job okay yes um but not. It's subpar. Okay. What's an LPN make in the Miami area? In the Miami area right now, they're averaging anywhere from 40 to about 45.

Yeah, that makes sense. Maybe more depending on where you do it. Okay. Exactly. All right. Good. Okay. And you can work a full-time job then with four kids?

Yes, I can. Nurse's schedule is three days a week. Yeah. So that definitely helps. Very good. Definitely doing this. I'm definitely doing this. Yes.

Okay. You've thought it all the way through. But I was very scared. Like, my husband was talking about selling the house so that I can do it. I don't think you have to sell the house. You just have to live on his income for a year. Okay. You've thought it all the way through. But I was very scared. Like, my husband was talking about selling the house so that I can do it. I don't think you have to sell the house. You just have to live on his income for a year. Right. I figured it was just a year of serious sacrifice.

You can live on his income. You're not going to make much progress on the debt with four kids making $100,000 and you getting through school. You might make some progress if you guys start really budgeting careful and watching what you're doing. I think you can probably clear up some of it. Let's clear up the medical, start to clear up these credit cards. You need to cut up the credit cards. You need to live on a plan where you definitely are not spending anything into debt under any circumstances. Okay.

But if you're willing to do all of that and tighten up on the financial, you've been really loosey-goosey on the money. That's how you got in this mess. Oh, yes, definitely made big mistakes. Yeah, so you've got to tighten up now. Okay. So part of you agreeing to finish school while you're in debt is, A, not going to do any more damage. B, we're going to tighten up and really get our act together.

And then, C, try to make some progress on the debt. But, I mean, when you come out and start making $45,000, and then they start paying for you to finish up the other stuff, cost you nothing out of pocket while you're working, boom, you're going to get up into the 70s, 80s, 90s then, depending on what you're doing. You know, as you finish that, then we've got a really nice household income, and the debt will be just, you'll slay that debt in no time doing that.

As soon as you get an income, really, you guys ought to knock this debt out pretty quick. Okay. But, yeah, I think you've really thought this through. And this is a good example of where education makes you considerable money because it's going to make you marketable and have a very, very marketable degree field to completely change your income. So is it worth five grand in a year? Yes, for sure it's worth that.

And is it worth delaying the rest of your other financial goals to get this going? Because this gives you a shovel to really dig aggressively with. Yes, yeah, I would do this. I'd do every bit of it. Very well done. But tighten up now. Anna is with us in Orlando. Hi, Anna.

How are you? Hi, I'm good. How are you? Better than I deserve. What's up? So I'm calling because I am in college. I have two part-time jobs, but total I make like $10,000, not much. My dad is paying for my college in cash.

It's kind of like a negotiation we made. So that taking care of my car was paid in cash. So I don't have like any expenses at all. I have about $1,000 saved. I've had my job for like a year. So at first I kind of went on trips and stuff like that. So I wish I had more, but I have about $1,000. And so going forward, I'm wondering, should I continue to just build the savings or should I put money into investments? Where to go with the money that I have that I really don't have anything to spend it on? I would build the savings in case, God forbid,

something happened to your dad's ability to follow through on paying for it. You'd have the money to finish school. Okay. What are you studying? Business management. Good for you. What year are you? I'm a sophomore, but I'll be a junior next semester.

Okay, good. Okay, so you've got two years. And, you know, I'm just going to pile up cash if I'm you as high as I can pile it as an insurance policy to ensure you're finishing school with no debt in any possible worst-case scenario. And then when you come out of school, you can begin investing. And you can, you know, worry about other types of things. And avoid debt completely, as you have done to this date. But stay away from the debt.

Stay away from the credit cards. Stay away from, you know, falling into a student loan for some stupid reason. I don't think you would, but it's possible. People do it all the time. And so, yeah, you've done a really good job so far. You've thought it through. You're not afraid of work. You've got a plan to go through school debt-free with your dad's help.

But let's just pile up cash. And that account is called our insurance policy. It ensures that Anna finishes her business management degree with zero debt. Once you do that, then you can cash that insurance policy out and use it for investing, use it for setting up your first apartment, setting up your first place after you get the new job and all that kind of stuff two years from now when you graduate. So, very cool. Hey, keep it up.

You're on the right track. Well done, well done. This is the Dave Ramsey Show. I get asked all the time about what people need to do to improve their family's money situation. Two of the most overlooked things are term life insurance and disability insurance. Both plans make sure that you have income to pay bills and take care of yourself and your family if something were to happen. For term life, you need to carry 10 to 12 times your income, and I recommend 15 or 20-year plans for most families. Stay away from cash value or return of premium plans.

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Thank you for joining us, America. Daniel is in Tallahassee, Florida. Welcome to the Dave Ramsey Show, Daniel. Hey there, Dave. How are you doing? Better than I deserve. What's up in your world? Well, me and my wife purchased a piece of land about two or three years ago with my parents. It was a really good deal, and so we went ahead and bought it. And I didn't want to, at the time I had enough cash to pay the whole property on my own, but I didn't want it to strap

us from being able to buy a house. Now, I know what you would say in that scenario, but at this point we have a balloon payment and I have two years until the balloon comes up. I have $11,000 saved to pay off that balloon, but we also have $8,000 worth of credit card debt. Did you ever buy a house? Yes, we do have a house. Okay. And you own this property with your parents? Correct. Yuck.

Well, I don't own the house with my parents. I own the land with my parents. I know. Yuck. Yeah. So they paid their portion off already? No, they could, but they haven't. So both of you are sitting there with the ability to have paid for this and didn't?

Correct. Okay. And your portion is $11,000? Mm-hmm. And so is theirs. Okay. And your portion is $11,000? Mm-hmm. And so is theirs. Okay. And you have how much cash? I have $11,052 in cash.

Okay. And what is your household income? I just got a raise, and between me and my wife, from here on out, we'll make it right around $60,000. Okay. With the potential for more more because I work on commission. Okay, good. So what's the plan with the land? What are you going to do with it? That's where things are probably going to be a little hairy.

We were thinking about we're definitely going to have the land cleared and cut for the timber, and then there's not a lot of value in the timber that's there, and we're either going to replant or leave it vacant. We're not real sure, and that's where some of the difficulty comes in as well. Because you're not in agreement with your parents on what to do with the land, and you're in partnership with them. Well, yeah. I mean, it's not that we're not in agreeance. I just don't think we're – we've not all sat down and got on the same page on it.

Yeah, okay. What's the land worth? Well, it's probably worth – I've checked it out recently, looking around at what stuff's selling for. It's probably worth around $90,000. Okay. Why did you buy it? Because it was for sale for like $60,000, and I knew that land being that low,

my wife comes from a farming family, so I knew that the value of the land was going to go up. You thought it was for sale for $60, you thought it was worth $90, so you bought it as a deal. But when you bought it, you bought it as a deal. Did you buy it just to hold the earth together? I mean, you didn't have any plan at all? No, at the time, we were just planning on buying it and either reselling it or us purchasing it from my parents one day to build a house. Let's put together a plan for the land.

All right. You guys suck at having a vision for this. All right. And what's going to end up happening is you all are going to end up mad at each other because you don't have a vision. And the two of you need to sit down, the four of you need to sit down and say uh we want to buy you out so we can build on it later boom done okay or we want to flip the thing and let's put our money in our pocket or we want to clear it and let the timber pay us some money back and

what little is there and at least it's cleared and then we're going to sit on it for five years. Or whatever. But we need to be in agreement as to what our plan is, because you guys are going to end up mad. All right. If nobody else is, your wife is. Yeah. Okay.

All right. So let's get that figured out. Now, once we've got that figured out, then that will tell us a little bit more what to do. If you're going to flip it, then put a sign on it right all right you follow me i mean it's okay if you want to keep it but if you're gonna flip it put a sign on it and then we use your money and pay off your credit card debt tomorrow because we're getting ready to sell this property we don't have to worry about paying it off right if you're going to keep it and buy them out um then i'm probably going to save another thousand dollars i don't want you left with 52 okay but uh but get get your thousand dollar above this and and then the same day you

pay it off your parents pay it off so that at least the land is debt free okay but don't you pay it off and them not or them pay it off and you not yeah that wouldn't that's not gonna that's gonna get weirder yeah okay yeah and then if you do that you turn around drop your eight thousand dollar credit card debt and your debt snowball and just attack over there okay okay all right but um but you know so that once you have a vision for this property, that should inform you as to how to handle this $11,000 or whether you need to handle this $11,000. Now, if you get ready to buy them out, let me help you with this. You do not buy them out and owe them money. Right.

Stupid on steroids, okay? Don't do that. The borrower is slave to the lender, and yourgiving dinner will taste different till you get it paid off and so you're half of you buying them out for forty five thousand dollars it might be that you just agree to okay we're going to both pay it off we're going to clear it and we're agreeing that you're going to allow us to buy you out for forty thousand dollars sometime in the next five years you pay off your credit card debt you get your emergency fund built and then you start saving up that $40,000 in cash. All right.

Or something like that. But we've got agreement that the plan is you want to buy them out, but it's going to take you a little bit of time to get there, and no, they're not going to carry a note back. Right. Okay. Is this making sense? It does.

It does make sense. But what's happened here is you guys kind of wandered into this, and somebody's going to end up mad. I promise you. And that's why I don't like being in partners. The only ship on sale is a partnership. And one in a family, for sure. You get yourself.

And nicest people in the world end up mad at each other. And you guys are nice people, I can tell. Y'all are a little bit all too laid back. You need to get just a little bit fired up about what we're going to do with this, and let's dial it in. Thanks for the call, dude. John's with us in Tri-Cities. Hey, John, welcome to the Dave Ramsey Show.

Well, thanks for taking the call, Dave. Sure, man. How can I help? I've got a what would Papa Dave do question. So my wife and I, we are debt-free for everything except for the house. We've got an emergency fund that's been built up with at least six months' worth of expenses. Got another little fund that we were building in order to buy a replacement vehicle because our two fully paid-for vehicles are getting old. And we had bought a house about a year ago, and lucky us, Murphy came in and took out the HVAC unit.

Oh, no. Yeah. The wonderful home, the previous owners did a remodel and bumped up an area, and I really don't think that they took into account the load that they were putting on the HVAC unit as well when they did that. So, you know, the builder grade unit, all that. Yeah, so the thing's fried and you've got putting on the HVAC unit as well when they did that. So it's, you know, the builder grade unit, all that. Yeah, so the thing's fried and you've got to buy an HVAC. Well, the deal is the zone board that takes all the signal from the thermostats is the thing that I know is dead.

So it's not passing anything out to a heat pump that's outside or sending a signal to the inside furnace. So the big question is, do I band-aid it knowing that the unit was 2005 when the house was built, remodeled in 2008? So I'm not sure how much life this thing's even got in it for what's on the outside. Do I put good money after something that might be bad is my concern. The zone board should be separate. The zone board, it definitely is separate.

You've got to have that. If that's fried, you've got to have that even if you put a new unit on the outside, right? Correct. So you can put a zone board on it and let this thing power through a little while, and it's not good money after bad, because that's money you've got to spend either way. But if I end up buying a whole new set of units, I know that the way that the guys have all been marketing, because we've got multiple quotes from a bunch of different... Well, buy a zone board and install it in such a way that it is usable for the replacement when you do replace it is what i'm

saying and that's totally possible yeah i'd do that first and then save up towards the heat and air and if you want to just spend your money on that that's fine it's an emergency if you want to clean out and go ahead and then you got to rebuild your emergency fund rebuild your buy a car fund, which makes you cry a little. That's why you're calling me. But if you want to do that, that's okay. But if you want to just do the zone board in such a way you can use it on the new replacement later, you'll be fine. Thanks for joining us, America.

We're glad you are here. Open phones at 888-825-5225. Adam is with us in Billings, Montana. Hi, Adam. How are you? Oh, not too bad. And yourself? Better than I deserve. What's up? Well, I'm wondering what to do with some of my money. Okay. I'm 23. I'm debt-free other than my house, thanks to you. And in nine years, I'm planning on quitting my job, selling my house, and moving to West Virginia with the rest of my family.

So do I keep paying extra on the principal of my house, or do I put that money somewhere else to try and grow more? Interesting. Why nine years? That's when the contract with my company will be up, and they'll be going through trying the process of getting a new contract. And it seems like the right time to leave. Wow. Okay. What do you do?

I work for a power plant. Okay. Wow. All right. You're single, you're 23, and you owe how much on your house? $160,000. And what do you make a year? Between $60,000 and $70,000, depending on overtime.

Good for you. Okay. Well, you're debt-free, except the house, and you have your emergency fund of three to six months of expenses. Yes, sir. Okay. What I would be doing is putting 15% of your income towards retirement in good growth stock mutual funds and Roth IRAs or 401ks that match. Roth all the way if you can.

15% of your income. And so about $12,000 a year, about $1,000 a month, give or take. Okay. That's about 15 15 of your income above that any money that i have i'm going to start throwing other than enjoying it and giving it i'm going to start throwing spare money at the house now let's uh say that your plan unfolds exactly as you think it's going to and nine years from now you have a paid for house which you would have a paid-for house by then. And you get ready to leave Billings, Montana and move back.

You would just sell the house. And guess what? They're going to give you a check at the closing. You're going to have all that money right there. It's parked there. Your rate of return on the money is equal to your mortgage interest rate. That's what you're making on your money, which is more than a savings account pays, but less than a mutual fund would pay. But the other thing is,

is you're building up this huge equity, and it's going to set you up to where, you know, you're 30-something years old at that point, and probably when you move back, you'll just pay cash for something because you will have sold a paid-for house at that point. That's the position it's going to put you in. So the beautiful thing about

paying down your home like that is it's what in the financial world we call a forced savings plan because you're making the four percent your mortgage interest rate or whatever it is on your money but you really can't take the money out of your savings account because it's a house. The only way you can get it out is to borrow, you know, go get a new mortgage or sell the house. So it's not like you're going to impulse that money away, where if that money were sitting just in a savings account of some kind or even maybe in a mutual fund, you might use it to buy a bass boat.

You won't when it's in the house. And so that forced savings plan is really good for you and it reduces now i'm not saying you shouldn't buy a bass boat but you just save up and pay for it and you don't use money you know it's a very intentional act that you would walk through to save up and pay for a bass boat or whatever it is you want to buy ronda's with us in atlanta hey ronda how are you i'm good yourself better yourself? Better than I deserve. What's up? Actually, I wanted to know, my TSP, I am matched out at 5% through my company. And I have it set out the 80-10-10, like you say.

But just recently, my income changed as I took on a bigger position. So my question is, actually, what should I bump that up to? Wasn't it not at 5%? I'm already at 5%. I thought you said that was all they would let you do. But I know your max is 15%. I thought you said all they would let you do is 5%. No, no, they will let you go more.

My question is, I'm already at what they'll match. Oh, at what they match. Okay. Right, correct. Take the match first and then do Roth IRAs in good mutual funds out in the open market with the SmartVestor Pro. Are you single or married? We're married. And your household income is what?

$95,000 a year. Okay. So basically we're saying we want to put $15,000 into something. And what do you make a year? I make $54,000. Okay. All right. So let's see here. So you're putting $2,700 out of the $15,000 in. So we've got to do another $1,203 into something. If you both do Roth IRAs, does your husband put anything in at work?

He has a 401k and they match as well to 5%, so I maxed him out at 5% as well. Okay, so both of you are putting in 5%, and so we really only have 10, so we have $9,500. So if you both do a Roth IRA, you'll be a little bit over 15% going into retirement. If you do 5% at work, he does 5 five at work, and you both do a Roth IRA. You see how I'm doing that? I don't see it. Okay, well, a Roth IRA is $5,500 a year. Okay?

Two of those is $11,000 a year. Okay. And on top of that, and that's a little more than 10% of your income, but not much. So you're going to be around 16% of your income going into retirement if you put 5% at your work, 5% at his work, and two Roth IRAs, one on each of you. Okay, and what percent should that be? Or it's just the money? $5,500.

Okay, okay. Each. A fully funded Roth IRA. And you can set that up with your SmartVestor Pro. If you don't have one, just go to DaveRamsey.com, click on SmartVestor, and you'll find the people that we recommend for investing. They don't work for me. They do pay us for the endorsement, but they don't get our endorsement

unless they have the heart of a teacher and agree to show folks to do stuff the way that we teach you here on the air. So you'll get consistent advice with what you hear here on the air with all the ELPs or with the SmartVestor Pros when it comes to investing. Either one, ELPs on insurance and on real estate and that kind of stuff. Justin is with us in Johnson City, Tennessee. Hi, Justin. How are you? Good. How are you, Dave?

Better than I deserve, sir. How can I help? Awesome. Well, what I was wanting to know is I know you always tell people to invest in their Roth IRA and everything like that. Right now, we're debt-free. I make about $90,000 a year. And my question is, instead of investing in our Roth or retirement,

we're wanting to find out if it's better to invest in real estate and then each time we pay for real estate cash-free and everything like that, roll that money into buying for real estate cash free and everything like that um roll that money into buying another you know real estate investment and then keep rolling them over until i mean eventually we're going to have pretty good income you know 20 years down the road or something like that yeah that's what we did other than we didn't stop our roths i'd probably go ahead and do a couple of roth iras so i've got some money going, because that's small money. I mean, a Roth IRA is $5,000, okay? $5,000 ain't going to buy a piece of real estate.

And it's not going to keep you from buying a piece of real estate. So let's get your Roth IRAs and that kind of stuff going, because it's small potatoes. And then aside from that, since you're 100% debt-free, way to go. Make it 90 grand. You're killing it, man. Congratulations. Very well done. And then aside from that, build up some other stuff.

But before I maxed out everything, if you want to slow down at the 15% mark or stop at the 15% of your income mark and pass that, I'm going to save up. But I wouldn't do no retirement savings in 100% real estate because the retirement savings is small potatoes compared. It's a smaller dollar amount, and you need big chunks of money to do real estate with cash. And as you said, the first one is the hard one, and then it cash flows like crazy because it's paid for. That's a wonderful thing. And then the next one snowballs in a positive way.

Then, you know, you get three or four or five rentals all paid for. All of a sudden, you can buy another one just out of the cash flow every so often. And that gets you there, man. That starts rolling then, and it's all debt-free. Really, really cool place to be. Phenomenal place to be. That puts us out of the Dave Ramsey Show and the books. Our thanks to James Childs, our producer, Blake Thompson, our senior executive producer,

and Kelly Daniel, our associate producer and phone screener. I am Dave Ramsey, your host, and we'll be back. Hey, guys, this is James Childs, producer of The Dave Ramsey Show. I'm excited to announce that we're now carried on 600 radio stations across the country. To find one near you, head to DaveRamney.com slash show.