The Ramsey Show - App - Finding the Freedom to Work From Home (Hour 2)

Episode Date: September 27, 2018

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Music Music 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 am Dave Ramsey, your host. Thanks for joining us. Open phones at 888-825-5225. Ken is in Dallas, Texas, starting off this hour. Hey, Ken, how are you?

Hey, how are you doing today? Better than I deserve, sir. How can I help? Well, I was introduced to you by Chris Brown. He came to my church a few weeks back. Oh, yeah. And my mind's been kind of blown for about three weeks, so I have to bear with me. It's okay. We love Pastor Chris.

How can I help? Well, I have a home mortgage and I owe $110,000. It's on an 80-20. I owe $105,000 on the 80. And it's at 7.5%, and I have roughly 18 years on it. Then I have a $5,000 that's 3.5%. And I probably owe about another two years, two or three years. What's the house worth?

The house is worth $280,000. Great. And what's your household income? Household income, $80,000 a year. Your credit clean? No. Since I saw Chris, I've paid off all my credit cards except for one. I have a big credit card that has an $11,000 balance on it.

So I'm getting ready to tassel it. Everything else, I had a total of six credit cards, and I paid all of them. I mean, is your score messed up from paying? Yeah, no, it's right at $700. Okay. Well, I'd refinance this in a heartbeat, dude. Seven and a half percent? I was wondering about that i mean should i pay the

no the 20 just call church just call churchill mortgage today i mean you can pay off the five thousand if you want to but um you know if you can't that's okay just roll it in get your 110 000 loan because you can get about a four and a half percent rate right now on a 15 year fixed okay that's going to save you like three thousand dollars a year in interest right okay and put it on a 15 year okay and that'll save me three years too yep okay and your payment probably won't change at all or might go down a little bit but we're going to pay extra on it anyway after we get up through these baby steps. Right, right. I'm reading the Financial Peace Planner.

My wife gave it to me two days ago. I'm on Chapter about 10. Okay. So, like I said, I've kind of had a rude awakening on a lot of things. Well, you got the wake-up call, and you answered the door. That's cool, man. I'm honored to walk with you. Hang on.

I'll send you a copy of our best-selling book. It's called The Total Money Makeover. It outlines all of the baby steps in detail, probably better than the Financial Peace Planner does. That's an old book you've got. And let me send you a copy of this one that's newer, and it'll give you exactly what to do, when to do it, and why to do it. But call Churchill Mortgage today and get started.

They've got a good branch there in Dallas, a good bunch of guys down there. I know them well. And they'll get you a refinance going on this. And you should be able, with the details you gave me, you should be able to get a four and a half or a little bit below fixed rate, 15-year, and that ought to save you about three grand a year in interest. And then when you get up to the point that you're paying extra on your house, you can even pay more on it. So perfect.

Well done, sir. Christian is with us in Los Angeles. Hi, Christian. How are you? Hi, Dave. Thanks for taking my call. I appreciate it. Sure.

What's up? A little over a year ago, my father passed away. And long story short, he left me a bit of money he had in a retirement and conventional IRA account, as well as some life insurance. And just after he passed away, I bought the family business, so I used a lot of the life insurance for that. I just don't know what the right decision to do is. I have about $70,000 in debt, and I don't know where to go from here. How much money do you have? In the bank?

Left, yeah, after buying the business. Nothing. I mean, I have some in the bank. I have about $5,000, but not half. And you have $70,000 in debt? Correct. And how much was in the inherited IRA? About $350,000.

Okay. There is no penalty cashing out an inherited IRA, only taxes. Okay. So I would pay the taxes on enough to get that $70,000 paid off. That is assuming you're willing to get on a written budget and never go back in debt again. Yeah. Fifty, I should mention, fifty of that debt is to my grandfather for the business, so I don't owe any interest on that.

I don't care. I'd still pay it off. Yeah, yeah, that's my intention. Yeah, I would take out enough to pay that all off and be done. What kind of business did you buy? I'd say produce companies like food delivery, that type of thing, the restaurants. And you were already involved in the business? Yeah, for about the past four years.

Okay. All right. Well, I'm sorry for the loss of your dad. How old are you? About 22. Oh, okay. Oh, man. Yeah, yeah, I definitely would take out enough and be debt-free, 100% debt-free.

But the problem, Christian, is this. Personal finance is 80% behavior. It's 20% head knowledge. And so if you continue in the behaviors that you were engaged in that got you into the debt before your dad passed, you'll go back into debt again. Right. So you have to raise your right hand and swear, I'm never borrowing money again. I'm cutting up these stupid credit cards, and if we can't pay cash for it we don't buy it period and if you're willing to do that and get on a written budget to stick to it again you know jump on every dollar download the every dollar app

it's free to use it'll put together you help you put your budget together and then you live on less than you make but if you're willing to do all of that, then, yeah, I definitely would clean this out, clean out enough of the money in order to be debt-free. And you'll have to pay your taxes, too. So, you know, in order to get 70 out of it, you're probably going to have to pull out close to 100. You'll still have $200,000 left laying there.

It'll be growing. Get that invested well and leave your hands off of it. And then from there, let's just move on up and get this business going and you should be able to run it beautifully with no debt hanging over you at all so good question thanks for joining us our question of the day comes from blinds.com they have a 100 satisfaction guarantee even if you mismeasure or pick the wrong color they will remake your window blinds free. Use the promo code Ramsey when you go there. Nick is

in North Dakota. Last year some things got mixed up and I ended up getting sent to collections for a health bill. Shows up as a derogatory account on my credit bureau. It's hurting my score like crazy. Went from 730 to 615 and now I'm just at 646. I'll go back getting that removed from my account.

If it is an accurately reported event, you cannot get it off your credit bureau report. And by the way, Nick, you're spending way too much time analyzing the wrong thing. Let's spend time analyzing how to actually end up with some money, not how I end up with a credit score. The credit score is an I love debt score. The only way you have a credit score is you borrow and pay back money all the time. It costs you a lot of money to maintain this score that means absolutely nothing except you like borrowing money. So stop it. Quit worshiping at the altar of the great Fico.

I want to set out to destroy him, but my goodness gracious, you're spending a lot of your energy on wrong stuff. 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 accredited organization chm members share to pay each other's medical bills.

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chministries.org. Megan is in Buffalo, New York. Hi, Megan. Welcome to the Dave Ramsey Show. Hi, Dave. Thank you for taking my call. Sure. What's up? I'm 32, and when I was in my early 20s, my family used to pay for everything for me.

They used to bail me out financially. I kind of lived off of that for a long time. But in the last couple of years, I've made a complete 180. Your show and all of your stuff is really, really helpful. Good. But they keep trying to bail me out of everything like lately my mom doesn't like my new apartment and she offered to pay your phone is breaking up honey you have to stand still or something speak directly into it i can't hear half of what you're saying oh can you hear me now yes Yes, I can. Thank you. Okay. So my family keeps trying to bail me out financially.

Right. But you don't need bailing out anymore. Did I understand that part right? I mean, I am in slight debt, but I don't want them to help me anymore. I don't want to accept any of their help. So I wasn't sure if you could recommend like a productive conversation, you know, that I can have with them, or if I should just sit down with them and kind of go over my finance plan.

Okay, so what do you make a year? I work on vehicle commission and F&I and I do service. So I can make anywhere. Your phone's breaking up again honey okay um you work on commission and you make what um i can make anywhere from 60 to 80 thousand dollars a year and you don't and they don't think you can live on that they don't and it's not frustrating um okay well i i mean that's that's just weird yeah i mean we're yeah well i guess they just got accustomed to taking care of

you and she doesn't like the apartment you live in but if you're paying your own bills it's none of her business yeah so i guess i mean i don't know i'm i don't my point is is there being so weird i'm not sure there is a productive conversation that's going to work you can try and the thing you try is just say listen thank you so much for all the help all those years ago i really appreciate it listen i'm making you know close to 60 maybe even up to000, and I don't need any help. And you should be excited for me that I don't need help. And thank you, but thank you for your generous offer, and no, I'm not going to receive any more help from you.

But thank you, you're very kind, and I appreciate you offering it. No. And then what would the response be if you said that to your mother? Oh, they get very angry. Okay, then they've got issues. Yeah. See, they want to run your life still. Right?

Mm-hmm. Yeah. I mean, is there some reason they should have control over your life? I don't know, and that's why I wasn't sure if that was true. I know, and you know. Yeah. You mean, is there some reason they should have control over your life? I don't know. And that's why I wasn't sure if that was true. I know. And you know. Yeah.

You do know. Is there some reason that they need to have control over your life? I think they think I can't do it. So, you know, I guess that's what frustrates me. Okay. Well, I mean, okay, let me do this. The book you need to pick up is called Boundaries by Dr. Henry Cloud. Because your parents don't have boundaries.

They're weird. Yeah. Okay. I agree on that. They're sweet. They mean well, but they're weird. Okay. If you have a 32-year- old daughter making 80 grand and you insult her

by continually offering money to her and if she doesn't take it you get mad you're weird by definition okay just just when you run that out in a sentence like that it just sounds strange doesn't it yeah yeah you're not crazy they are okay you're just to be normal. But they got used to helping you somewhere back there. They've got, maybe they, I'm guessing they make a lot of money, right? I mean, they, you know, they make decent money. It's not, you know, upper class sort of thing. No, it's not that. Okay.

They're not like uber rich then. Right. Well, then this is really weird. I mean, if they had millions of dollars or something and they're like hey i can throw you a bone here it's not a big deal that would even make a little bit of sense right but they don't even have the money that they're trying to give you yeah and i i won't i just think if you had run into this sort of thing or if it was normal no it's it's not normal. It's weird.

And they got issues. So read the book Boundaries, and you'll begin to understand. Now, here's the problem. You need to know this up front. The book is going to tell you this. When you set boundaries with people who don't respect boundaries, you can expect them to become angry because you put up a fence and they were used to walking through your yard but it's your yard and you put up a fence see i don't get to get mad about not getting to walk in your yard but they do sometimes so that's the problem they don't respect the guidelines they

don't respect the boundaries and so the book is the boundaries. And so the book is called Boundaries by Dr. Henry Cloud. It'll help you out a bunch, kiddo. All right, Chandler's in Houston, Texas, where the marriage and money event is going to be tonight. Are you going? I'm not. You want to go? Sure. I'll give you a couple tickets if you want to go.

Okay, I'll have to actually have a group at our house tonight, so we won't be able to go. Oh, you want to take the whole group? It's students. I'm a student pastor. Oh. Oh. Marriage and money. It's up to you.

How many students? It's probably about 10 or so. Up to you, Pastor. If you want to take them all, they'll learn something about relationships, and they'll learn something about money. I'll give you tickets for all of them. But anyway, you think about it, and we'll talk about it at the end. How can I help? Okay.

So recently we had some foundation or are having foundation issues at our house. So we got a bunch of quotes on that. So the quote that we are leaning towards going with is $25,000. So the cause of the foundation is pipes under the ground, which is $11,000. So total $36,000 plus there's interior piers. So interior piers will cause a need in new floors. Your house is falling in. In Sheetrock.

What's up? I said your house is falling in. Yeah, essentially. So we think we caught it early, but so that's the work that's going to need to be done. We try to do an insurance claim, but they won't cover it. So in total, the cost is going to be about $40,000 in repairs. We only owe $149,000 left on the house. And so in addition to that, I just got in a wreck like two weeks ago,

so my car is totaled, my truck is totaled, and so I'm assuming they have full liability, the other driver did, so I'm assuming that I'll get like $6,000 back on the truck. Okay. So cash flow, we have $17,000 in emergency fund. What's your $17,000 in your emergency fund okay correct all right uh we were saving for a car um and we have 13 but we were going to use that to the house so the house happened before the car happened um and then in a general savings we have three so total 33 okay so you don't have the money to do the $40,000 repair.

Correct. So my question is, we've been talking about either pulling some equity out of the house. If so, how much should we pull? Should we drain? I wouldn't. I would attack this problem a different way. Do it in stages. Try to find two phases that you can do the construction in and break it apart so you can cash flow it. You've got almost enough money.

The truck doesn't throw this off. You've got a $6,000 truck. They give you a $6,000 check. You get another $6,000 truck. It does not count in this equation. You don't upgrade the truck because your truck got totaled. You just break even. Right.

So I know that with foundation companies like one of the big expenses is uh like kind of the entrance and the tunneling and stuff and so we would have to probably do how many bids did you get what's up how many bids did you get we got five okay so you've really studied this then good yeah no we really haven't we have one more coming next next friday but my assumption is that they'll be kind of on the higher end as well. Well, talk to the contractor. Talk to the contractor and say, listen, I got 33, so I can't do 40. How can we break this up so I can do half of it now and another portion of it later? And that's the only way you're going to be able to do it,

because I would not tell you to borrow money for this. I think you're going to end up being broke when you're done anyway. So, you know, the last thing you want to do is be broken in debt further. That's not a plan. But I think you can break this construction up into two phases and get it done. I get asked all the time, when in the baby steps is the right time to buy life insurance? My answer is typically now. Life insurance is not part of the baby steps because it's needed when your family has debt and not enough savings to provide for their financial needs.

That's when they're at the highest risk. And no matter where you are in your baby steps, it's a necessity, not a choice. This includes working husbands and wives, as well as stay-at-home parents. It's pretty expensive to replace those stay-at-home parent responsibilities. I only recommend term life insurance since it's the most affordable way to get the right amount of coverage and not break your budget. Go to Zander.com or call 800-356-4282. These are the guys I personally use. Term life insurance is inexpensive, and your family needs this no matter where you are in your baby steps. That's Zander.com or call 800-356-4282 zander.com Steve's with us in Baton Rouge. Hi, Steve.

Welcome to the Dave Ramsey Show. Hello, Dave. Thank you for taking my call today. Sure. What's up? I had a question. I'm in baby step two, and I've got three kids, and one of them has taken up gymnastics. I had some questions about the season, what maybe 2, and I've got three kids, and one of them has taken up gymnastics.

I had some questions about the season, what maybe you thought I should do in Baby Step 2. She started out as a doing recreation gymnastics, and it was $70 a month, which was fine. But she's been excelling ever since she got in there. She's done really well, and they asked her to be on team gymnastics, and they told us initially it was going to be $170 a month. And I agreed to that and I said, we'll go ahead and make it work. We'll make it happen. So I went ahead and we did that

and it's been slowly creeping up from the $170. I'm spending about $300 a month now for the gymnastics. Plus, it seems like every once in a while they throw extra fees in there, and it's just killing my budget. I'm trying to get a baby step two. And I'm trying to decide what to do. My wife, we're kind of on disagreement on what to do on that.

I'm starting to think maybe it's just a little too much. What's your household income? Well, I've got two jobs. Since I started your baby step two, I've got two jobs. Since I started here at Baby Step 2, I picked up another job. My main job is about $85,000, with my second job it's around $100,000. I've been working the last, I've been Baby Step 2 for 18 months now. I paid off $44,000 in debt, and I've been working 65 to 90 hours a week, and I'm ready to rein it in a little bit so I can be home more.

That's nothing to factor in. How much debt have you got left? Right now, I've got $23,000 left, and I'm hoping to be done with Baby Step 2 in a year or less. Okay. Your wife is not participating in this? You're doing this by yourself?

No. No, she is trying to follow the program with the exception of gymnastics. How old is your daughter that's in gymnastics? She is six, six years old. Okay. Your wife is not going to like me. Okay. Spending $300 a month on a six-year-old

while you're having to work 90 hours a week is asinine. It's ridiculous. Really. I mean, that's $4,000 a year. At least.

If you weren't working overtime and you guys were debt free and all and you wanted to spend this that's fine i still think it's asinine but it's fine it's up to you to do that at that point but dude this is not right yes another thing too is she has needs where she has to travel, and sometimes they're out of state. We might be able to make a drive. Listen, you're not training an Olympian. Yes. This is a child that's supposed to be having fun.

And your family right now is trying to get out of debt, and you are working like a madman. You're working a bazillion hours for a six-year-old to travel and do gymnastics. Now, I'm probably going to get hate mail off of this, and you're probably going to get hate mail when you get home. I know. We've been going back and forth about this and i and i feel bad because i haven't agreed to it you know yeah no no wait a minute you you didn't agree to it they changed the time they moved the needle on you you got you got sucked into the vortex man i heard the story it went from 70 to 170 to 300 and now we're traveling and so now we're up over 300 way over

300 when you include travel. Yes. I mean, you don't know how much it's going to cost, you know, once you have those geeks in these cities that have all these. Yeah, I know how much it's going to cost if it's my kid, zero. We're done. We're done. You can do tumbling in the backyard, kid. Okay.

Just do your little somersault there. I'm sorry i that's just it's you know my my son you know when we were i coached him playing ice hockey he started playing when he was four okay and we didn't even play travel and it really wasn't because uh he was good enough to play travel, but he was not good enough to get in the NHL. I understand. And so we just made a decision at our house. A, we weren't going to spend the money, and B, we weren't going to spend every weekend running around all over the U.S. to watch a kid play hockey when I can drive down here to the rink and watch him play hockey.

And he had just as much fun doing that, and he wasn't going to be in the NHL, number one. Didn't want him to. Number two, he wasn't good enough. And so neither was his old man, okay? So, you know, I mean, this is about kids having fun. I understand. She does love it. I know if we do pull her out with this, she's going to be mad at me.

She's six. She'll be done mad at you by the end of the week. Okay. You know? I mean, she's six. How long is she going to be mad? A 16-year-old can remember something a year. A 6-year-old can't.

And so I'm just an old guy that's raised kids and now got grandkids running around, and they're just more resilient, and it's just kids having fun. It's okay to spend money on stuff like that for your kids if that's what you want to do and you have the money. But you guys don't have the money. The dad is working himself into oblivion so a six-year-old can tumble out of town. There's just something wrong with that, man. I mean, I'm sorry. Again, I'm not going to be popular at your house, and that's okay.

I'll have to live with that. I'm not popular at some people's houses as it is. And a bunch of you are sending me a bunch of tweets right now. I'm sure something raising cane with me right now. That's fine. Have at it. I don't care. That's the beauty of this show. So, hey, I'm sorry, man. I'm not trying raising cane with me right now. That's fine. Have at it. I don't care. That's the beauty of this show.

So, hey, I'm sorry, man. I'm not trying to be mean to your baby. I want your baby to have fun. But I'm kind of taking up for you. You're being a good man. You're serving your wife, your kids. You're trying to do the grown-up thing and getting this debt cleaned up so your family can have a future. And you're working 90 hours a week to do that. and it's being offset by the kid doing tumbling it just doesn't

make sense to me so hey thanks for the call open phones at 888-825-5225 i am not against all kids organized sports i'm not against i'm against parents who get completely freaking out of control or they get sucked into this. We did that. Which one of ours was doing it? Oh, it was Rachel. Rachel and Denise were both cheerleaders. Rachel more so than Denise.

And Rachel was little, and so what was it they called her? She was the one that jumped up on top and then they would throw her off. Oh, the flyer. She was the flyer. She would fly and so then she goes down here and takes cheerleading class which never made sense to me at all but i did i went along with it we had the money and and then they wanted to do competition cheerleading class and the kids like 13 years old and it was hundreds and hundreds of dollars i'm just sharing you have the money i don't care if i have the money it's just dumb to me we're not doing it so we didn't do competition cheerleading either so we might have

for a month or two but it just didn't last i just can't you just you just gotta decide where your values are it's okay if you guys want to do that and you have the money you can do whatever you want to do. I'm not mad at you about it. But the thing is, when you're having to make financial choices like working overtime and working extra jobs because of stuff like that, that's when

you've gotten the thing out of control. It's out of balance. And so that's my story and I'm sticking to it. Again, if you don't like it, it's okay. Turn the dial. Get you something else to listen to. Open phones at 888-825-5225.

You jump in. We'll talk about your life and your money. It's a free call. I forgot Rachel was a flyer. I have a reminder of that someday. The flyer will be tonight in Orlando. Not Orlando. She left Orlando and went to Houston.

They're doing a money and marriage event tonight in Houston, Texas, her and Les Parrott. And so number one best-selling author. Now The Flyer is number one best-selling author. And Rachel Cruz will be with... I'm going to be in so much hot water. We'll be with Les Parrott in Houston, Texas tonight. There are still a few tickets left. You can jump online at rachelcruz.com and get them, or at davramsey.com and get them.

This is the Dave Ramsey Show. Thank you. Jamie from our Ramsey Baby Steps community on Facebook said, Woo-hoo! We called an ELP. We got a quote that would save us a staggering $877.18 a year. Sorry, lifelong friend and agent, you're fired. Live like no one else. There you go. You can save like Jamie by simply bundling your auto and home insurance together with one of our independent insurance agents

who will shop a bazillion companies and get you the best policy at the best prices. Just go to an insurance-endorsed local provider, and that's an ELP for insurance at DaveRamsey.com. And you save money, really, and any harder than that, is it? All right, Rebecca is with us in Fargo, North Dakota. Hi, Rebecca. How are you? Hi, Dave.

Thanks for taking my call. Sure. What's up? Well, two years ago, before my husband and I started your plan, he had an emergency open heart surgery. He had an undiagnosed condition and came out of his overnight surgery with an artificial heart valve and a synthetic aorta. Wow. How old is he?

Now, he was 36 at the time. Okay. And how long ago was this? Two years. Okay. How's he doing? Great. Doing awesome.

Good. Okay. But he can't get life insurance. I suspect. He had it through his company, and he has since changed jobs, and now the most we can get a hold of is, like, a $40,000 plan, you know, through work. Mm-hmm. We worked with a few brokers. Did you try Xander?

We tried Xander. They couldn't help us. Okay. Yeah, I suspect. I think that's probably accurate. Yeah, because this is a pretty extreme surgery on a very young guy. And so I suspect over time, though, he will become more insurable. Is that what you've been told?

We're hoping that. And we did finally find a broker who was able to get us in touch with Prudential, and they could do a $500,000 policy on a 20-year term for $215. And we're just wondering, is that, you know, it seems like such a high amount for a term. That's ridiculous. It's up to you guys. I mean, do you have children? We have a 2 amount for a term. That's ridiculous. It's up to you guys. I mean, do you have children? We have a two-year-old.

He was three months old when all this went down, and then we have one on the way in January. Okay. And what does your husband make? He makes about $47,000. And what do you make? Right around that same mark. Okay. Here's the thing.

What you're balancing this off against is that's a very, very expensive policy. And then the risk is if, God forbid, something happens to him, you've got to raise his kids. So I would pick the $ the 40 000 up for sure and i think you can pick up some other odds and ends policies that are no met non-medical meaning they don't we we actually got an email from a letter from a previous employer saying that he could continue the policy that they had with them if we just start paying that company directly it would just be another 40 000 but it's like eight dollars a month do it do it okay definitely do that that's a lot better deal than the other one right and so uh in the other place you may be able to pick it

up that's cheaper than we're talking about with prue is uh do you own a home we do call your mortgage company and see if they sell any mortgage life mortgage life is about 5x normal but proves quoting you more than 5x normal okay and um then you can just look at it so we're talking about 2400 a year out of your income of 90 000 and you could have a half a million dollars in insurance it's up to you as to how worried you are about that. But I'm with you. It's up to you. How are you going to feel if, God forbid, something happens to him?

And you've got to raise these kids. That's what we're worried about here, right? Right. Well, we got on your plan a year and a half ago, and over the next nine months we did get debt-free, $21,300 in nine months. And we listen to your radio so much that our son calls you Uncle Dave. So, yeah, we're just trying to make sure. Well, I mean, if you did do the approved policy, I would say let's do it, and let's just plan on keeping it a couple years and during that time you know finish off being out of debt have your emergency fund

start really building wealth and maybe he starts to become insurable with some distance between the event and you know the the longer it's been since he had the surgery the more insured more likely he is to be insurable at a reasonable rate. So I might go ahead and take it as a temporary thing. It's not your permanent answer, but I might take it as a temporary thing. Just say, you know, we're going to do this, we're going to do it for two years, and then we're going to look at it again. That's with a baby and a two-year-old. Yeah, I probably would.

You're making $90 household. I probably would spend $2,400. I probably would. And I and i'd pick up the other two too just for the fun of it just have them in place uh because they're not that expensive and you have another 80 grand right there and then then let's just decide two years from now try again see if we can get a policy and look at your situation we're debt free've got this pile of money. Oh, I feel a whole lot better now, you know, and that changes the equation. Thanks for calling in. See, folks, that's what happens.

You want to not only have you want to have insurance that's not only at your company because of what he just experienced. You lose the insurance when you leave the company. In this case, they're letting him go back and get it for some reason, but that's unusual. But, you know, you have an event, and then you leave the company, you lose the insurance. You get a cancer diagnosis or a heart diagnosis or something like that. And the second thing that we get out of that call that you need to learn is this idea that as you decrease your debt as your children get older and as you increase your wealth your need for insurance is going down as you decrease your debt increase your wealth and your children get older in other words if you've got an 18 year old you have, you have $500,000 in mutual funds, and you

have no debt, your need for insurance is a lot less than if you have debt and a 2-year-old that you've got to raise for the next 18 years, right? Or 16 years, or however you want to measure that. But the point being, the older the children get, and or leave home as they grow up, and you'd have zero debt, and you build wealth, you do away with your need for life insurance over time. And that's just from good financial planning, is all that is. So, good question.

Thank you for joining us. I'm sorry you're facing all that. I'm glad he's doing that is. So good question. Thank you for joining us. I'm sorry you're facing all that. I'm glad he's doing so good. That's great. It's pretty amazing if you think about it. So that's why we don't buy whole life life insurance, which is roughly 20 times more expensive because you take the other 19 times

and you do your investing there and you get out of debt there. So as you invest over time and you say for 20 years, I'm going to invest 15% of my household income because I paid off all my household debt, not counting my mortgage. And during that 20 years, I get my house paid off. And during that 20 years, the kids grow up and leave. And so now you're not 30 with a 2-year-old.

Now you're 50 with a 22-year-old. And you're debt-free. And you've got $500,000, $600,000, $700,000 in mutual funds. Now, if your husband dies in that situation, your wife dies in that situation, you know, you're debt-free, no kids at home, and you've got $700,000, if you had no insurance, you'd be just fine. And so by increasing your wealth, increasing your net worth, decreasing your debt, increasing your investments, and by raising the kids and they are grown and gone, or closer to grown and gone, your need for insurance dissipates every year so in her

situation as they hang on for two more years you know the kids are two years older they're two years further down the pike saving and investing and they've finished up getting rid of the debt except for the home and the house is even starting to go away see their need for insurance two years from now is less than it would be today. Now, we buy a 20-year level term to take you all the way out to give you a comfort level, but it changes everything if you start to look at the insurance through the lens of actually financial planning instead of the lens of what your insurance agent wants you to do, which is give them a commission. This is the Dave Ramsey Show. Hey guys, this is Blake Thompson,

Chief Production Officer for the Dave Ramsey Show. Here's a tip. To keep from missing Dave's classic facial expressions to some of those calls, make sure you watch him live. Just visit DaveRamsey.com slash show each day from 2 to 5 p.m. Eastern.