The Ramsey Show - App - How Do I Financially Plan for a Career Change? (Hour 2)

Episode Date: May 5, 2021

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Live from the headquarters of Ramsey Solutions, broadcasting from the Dollar Car Rental Studios, it's the 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. Christy Wright, Ramsey personality, number one best-selling author, is my co-host today as we answer your questions about your life and your money. Thank you for being with us. Open phones at 888-825-5225.

That's 888-825-5225. Rachel's with us in Miami, Florida. Hi, Rachel. How are you? Hi, how are you? Better than I deserve. What's up? I'm so happy to be on here. I've been listening to you guys for a while. So I have a car that's worth about $2,000, but I owe $2,900 on it. And I'm not sure whether to

repair it or sell it and then get a new one. A couple of caveats, it is under my mom's name. And other than that, the car is running, but there's no AC, and I'm in Miami, and it's pretty hot, and all the Colts, the 60AC, et cetera, are running about to $1,000. What kind of car is it? It's a Mazda CX-7. It's like a mini SUV. What's your income? So right now, my income is about $2,000 a month,

but I have about $12,000 in savings. But I am interviewing for a management consulting company, so I'm interviewing right now for a job that will give me about $160,000. But again, I'm interviewing. That's a big job. That's a little change. Well, yeah. I'm normally a freelancer, so I decided I'm a freelance consultant. So I was like, you know what, let me just go for actually working for a consulting company like McKinsey or Boston Consulting Group.

Okay. Wow. All right. I sure hope you pull that off. That'll be amazing. How old are you? I'm 33. Excellent.

Okay. Well, go back to your original question on the car itself. The formula on a car, regardless of what's owed on it, do I fix the car? You ask yourself, what can I sell the car for today, and what can I sell it for if I fixed it? If the difference is not equal to the repair, you sell it now without fixing it. So let me give you an example. You said the car is worth $2,000. is not equal to the repair, you sell it now without fixing it. So let me give you an example. You said the car is worth $2,000.

If you spend $1,000 on it, does it make it worth $3,000? No, it probably doesn't. No, not according to CarMax, which I talked to them and they really said that. CarMax is buying the car from you at wholesale. Yes. They're buying it from you where they can resell it and make a profit. A car like you've got should be sold to an individual and you can make more on it so you need to go to kellybluebook.com kbb.com and look and see what this car is worth on a private sale so you put it on craigslist and you sell it to somebody okay and let's use those numbers now

you do have a thousand dollars worth of repairs to do to it. I do not think that the $1,000 worth of repairs is going to make the car worth $1,000 more on a $2,000 or a $3,000 car. I don't think that's going to happen. So you're probably going to sell it as is, and you're going to have to write a check in order to do that. If you sold it for $2,000 and you owe $2,900, you have to write a check for the $900 difference, right? Yes. And then you've got to write a check and buy a car.

Yes, which I'm deathly afraid of because I do only have $12,000, and I haven't landed the new job, and I just want to make sure that I don't put myself in a weird situation. Yeah. Well, I wouldn't. I would spend no more than $4,000 or $5,000 on a car in this situation. And then if you start making $160,000 in a year, take that $5,000 car and buy you a $15,000 car. But you save up and pay cash for it either way.

Okay. So if you sell this car and you write five thousand dollars out and you go buy another little used car of some kind um so you should probably uh if you're going to do that uh two things i think of is one find a good local independent mechanic that will pay charge you a small fee for inspecting the car and looking it over for you, okay? And number two, do you have, if you're in a church, do you have some older guys in the church that might help you in this purchase, or do you have an uncle or a dad or something that might help you in the purchase? It is not that you're not capable,

but sometimes people around the car business might treat a 33-year-old lady differently than they would a crusty old dude. Well, and if it's your first time doing it. Ask my dad. It is, because this would be the first car under my name. It's either been a company or my parents. Yeah. Yeah.

Would your dad go with you and look at it with you and give you advice and also kind of back the doobs off on the car lot to where you actually get a good deal? Yeah, I could go with my dad or my boyfriend. Yeah, either one. Or my boyfriend. Either one's fine. And I'm not being sexist, but I'm telling you that people in that business might be.

I think you're perfectly capable of doing it. I just don't want you to get mistreated, and I want you to get the best possible deal. And so I'm going to use every technique in the book. Well, and if you've never done it before, Rachel, like you're saying, then you wouldn't even know if you were being taken advantage of or not. If I bought a car when I was 22 or 23 or something when it was my first time, I didn't know the first time. I had to ask everybody to research, bring people with me.

By this point, I've bought and sold several cars. So I'm confident going into that type of environment and I know what to ask and I know when someone's trying to be shady. But if it's your first time, you wouldn't know how to do that. And so, yeah, just having all the help in your corner is a great idea. Yeah. Good stuff. Tom is with us in Scranton, Pennsylvania. Hey, Tom, how are you? Good, Dave. Thanks for taking my call. Sure. What's up? Okay. We're brand new to you. We're in baby step two. May was our first every dollar budget. Wow. Good for you. Well, yeah, I hope so. He's like, I don't know. It's a wild ride, brother. Yeah. So my question is, I got something that doesn't plug in real well. I've got some loans on my

tax-deferred profit-sharing account. The account's worth about $400,000 in company stock. Well, it was. I just moved it and diversified it, thanks to you. But it should be $450,000, but I took these loans out. I'm paying myself 5% interest. Yeah, they always do. And I'm taking it. It's taken out of my paycheck sure bi-weekly um do i treat that as debt yes it is put in line and paid down yep put it in your debt snowball okay all right yeah wherever it goes the thing is when you get to it you will not be able to pay extra on it every month. You'll have to just save up and pay it off in one lump because they won't take extra payments.

I think they do. Really? Yeah, the program that I've seen. But my other option, just to make sure, because of COVID, I might be able to put those payments on hold for six months. No, we want to get rid of the debt. So you treat it as debt and just put it in line? It is debt. Right. Yes, yes.

Treat it as debt. It is debt. Because it is debt. And get rid of it. Because I want you to have your $400,000 without anything leaning against it. So, yeah, yeah, definitely. You'll make more money on your money than you're paying you on your money when you don't have this lien against it. So it's a much better deal.

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AO's books, everybody's there. They're all there. So jump in here. We'll talk to you. 888-825-5225. Jessica is in San Francisco. Hi, Jessica. Welcome to The Ramsey Show.

Thanks, Dave, for taking my call. It's an honor to speak with you. You too. I'm on Baby Step 6, and I'm about to inherit about $330,000. I have a loan balance of about $338, coincidentally, with an interest rate of 2.75%. My principal and interest every month is about $1,400. And so I'm considering using the inheritance to either build an accessory dwelling unit or an in-law unit to get rental income as opposed to paying off the mortgage balance. And I just wanted your thoughts on that. For 30 years, we've taught people the shortest distance between where you are and wealth is to invest steadily in your 401ks and Roth IRAs and stay out of debt and get out of debt. that hypothesis in that we found the typical millionaire has a paid-for home and a million dollars plus in their mutual funds and their retirement.

That's the typical thing. I mean, they didn't make money by doing an in-law apartment. They paid off their house. So what would I do if I were in your shoes? I would pay off my house. The home is worth about $1.2 million. Great. And when my dad passes, which hopefully he doesn't anytime soon,

I will probably inherit upwards of $2 million. Wonderful. A wonderful position here. Being in the San francisco bay area obviously i could build a shed in the backyard and rent it out for more than fourteen hundred dollars a month so you you can do whatever you want to do honey okay if i woke up in your shoes i would pay off your house and then i would use my increased cash flow in your income to save up and do whatever additions you want to do. And then when you inherit the other money,

I'm going to buy real estate that I pay cash for and or invest it in mutual funds. I think you're – I don't want you making a dumb decision based on what you may receive in the future as an inheritance. That doesn't change the answer. And staying in debt on your home, I mean, you're going to be free. You'll be 100% free. You do not understand how that's going to feel when you do that. And let me tell you, if you pay off this house and you hate being debt free, you can go get

your mortgage if you want. And the other thing is, it's not that we're saying not to do it. It's just the order in which you do things. I think people miss that. Sometimes I feel like when you say do this first, then do this, all they hear is no. It's not no. It's just not right now. It's right now you're going to pay off your debt and then save up, pay cash,

and do that shed mother-in-law deal you want to do for extra income if you want to. It's just the order in which you do it. Oh, by the way, you've got $100,000 left over. I mean, what kind of shed are you building here? So, you know, how much you spend on this mother in law apartment and be careful that you don't spend money on an improvement on a property that is not going to increase the value by what you spend. And some mother-in-law projects don't increase the value by what you spend. Matter of fact, sometimes they just mess up the house and make it where it's not marketable because a lot

of people don't want a house with a big mother-in-law thing attached to the side of it. Some do, but the typical family doesn't want that. And so you could actually harm the marketability of the house if you're not careful in this process. So be very thoughtful, get some real estate people, look at the idea with you and make sure you're not turning your property into a white elephant, we call it, meaning something very hard to get rid of. Well, and even just think about the implications of what you're suggesting to do, because aside from the financial, which we're talking about, you're talking about essentially building this mother-in-law apartment to be able to rent it, to create the income, to pay for the

debt, when you could just pay the debt right now and avoid the headache of having a renter. And so it's like, this is a much quicker path to where you want to be, which is debt-free and not having the headache. And then like you said, in the future, if you just want to do it for fun, to have that extra income, fine. But right now, it's almost like you're suggesting it as a means to pay off this debt, and you don't need to. Jonah is with us in Pittsburgh. Hey, Jonah, what's up? Hi, Dave. It's Jonah. Sorry, I'm nervous. So I'm calling because my husband and I have about over $270,000 worth of debt in student loans and much stuff. And we paid about $100,000 of that. Good Lord.

For what? I'm a nurse practitioner, and my husband had a couple of things he wanted to do. I'm having trouble hearing you. Your voice is all over the place. Can you speak directly into your phone, please? Yes. I said I'm a nurse practitioner, and my husband's a social worker. And you have $270,000 in student loan debt.

I mean, a bunch of other. Like, there was $30,000, $40,000 worth of credit card and consumer debt too, but mostly it was all student loans. Okay. So my question was about $20,000 or so is about a parent plus loan under my mom's name. And I wanted to know in terms of like Baby Step 2, is that an hour snowball or is it something we should do later because i mean we plan on paying it but i didn't know if we should you know go through the steps first and then come back to it at some point or just slowly pay it so you have taken you have taken emotional and moral ownership of this debt even though it's

legally not yours correct yes but my family's never been great with debt and money so yeah they're you're great with debt that's for sure you got a bunch of it yeah i hate it i'm trying to get rid of it we've been doing this since 2019 now okay so cool you're you're just going to put this in your debt snowball because you're going to pay off the parent plus loan okay that's good to know you're treating it like it's your debt right yes i'm treating it like well the problem is is that my sister took out paraplexums too so they all kind of like mesh together so i'm not really sure like which one's mine and well you need to get a real sure accounting so you know when you're done yeah i definitely even if it's not a certain loan you

just come to agreement with your parents that I'm paying $20,422, and after that I'm done, or whatever the number is. Okay, that's good. I've always just wondered this question. Yeah, because this is a never-ending thread you're going to pull on this sweater otherwise. Yes, and I want it gone forever. Amen. Yeah, $270, 270 000 i can't breathe it's just so normal now it is and and

and just the amount of time and income you have to dedicate to paying backwards uh it's just such an uphill climb yeah we uh climb we just finished, the Ramsey research team just finished a survey, a study done, and they found that 44% of the people with debt are losing sleep at night. Oh, I believe that. Because of debt. I believe it. I'm like, that means the other 65% are sleeping good. They are.

55% are sleeping good. They are feeling good about their situation. I just, I understand. Neither are good. 78% are worried about it. What's the other 22% doing?. I'm just trying to understand. Neither are good. 78% are worried about it. What's the other 22% doing? I don't understand. I always wonder about these statistics that we come up with around here.

Of course they're losing sleep. I remember being that scared. Couldn't breathe. Wow. This is the Ramsey Chef. Thank you for joining us, America. We're glad you're here. Christy Wright, Ramsey personality, number one bestselling author, is my co-host today. You can join her on the Christy Wright Podcast.

You can join her on her Instagram, which you should do because she's pretty busy on Instagram. She's like an addicting poster. You and Anthony, Ayo and Christy have the most posts going of anybody around here for sure. That's what our social team tells us works. They say frequency is good, so we're trying. Well, you know, yours is actually good. Anthony's I'm kind of sick of. You can give him a hard time about that.

I'm kidding. Not much. But anyway, yeah, it's everything in the world. And one of the things you've done is you've taken your devotional and have led people through it, the 40 days to get back to you. That's right um and uh best-selling devotional book a 40-day devotional and you've gone through it several different times on instagram right yeah we're in the middle of it right now on the 40 days following easter when in the bible jesus appeared to people on the earth

and the 40 days following the resurrection so just once a week i go live and read the day um you know the excerpt from that day in the scripture. And it's been fun. So at Christy, be right if you want to follow along. Absolutely. Jump in there. Carol is with us in Joplin, Missouri. Hey, Carol, how are you?

I'm good. How are you, Dave? Better than I deserve. What's up? Well, I was calling to get some of your advice. My husband and I had purchased some property last summer with the intent of building on it. And as you know, I'm pretty sure this is how it is everywhere, but the costs have went up. And we recently found out that we have the opportunity to make some money

on it. We purchased the property for $50,000 and we could make at least $25,000, if not more. So my question is, would you recommend that we sell the property and make money on it or wait for prices to go down or just to go ahead and build? Do you have any opinion on that? Why are you leaving the property you're in? Well, we currently rent. So when we found the property, it was a rare find. It's a couple acres in town from where we live. It's not something that we usually come across. So we purchased it because it was a good opportunity.

What's your household income? $95,000 a year. What price range home are you thinking of building on this property? The property and the house would probably end up costing altogether about $240,000. Say $240,000 max. Okay. All right. With everything we'd have in it. Yes, building materials have gone through the roof.

And, yes, in a lot of areas there's a shortage of subs and labor and builders to do the work because there's a building boom. And there's a shortage of everything because the factories weren't making it during COVID. And now there is the shortage is causing the prices to go up. For instance, lumber has gone up dramatically regardless of what area of the country you're in. And labor in a lot of areas has gone up because there's a shortage of labor because the real estate is just white hot in a lot of areas. So all of that is true. And so what you've got to do is you have to figure out if you build now, can you put together a manageable situation?

A manageable situation is can you somehow lock in some prices with a builder that you trust and that has the financial wherewithal to ride this out and go ahead and build it. A builder that is financially set and has enough profit margin built in to absorb some of these increases can pull off building for you right now. And you may be able to find one of those, and that's fine. This sounds like your first house. It's actually not.

We sold our house about four years ago to pay off debt. So the only debt that we own right now would be on a property that we just recently purchased. So we've been renting for about four years, saving up and going through the baby steps. So that's kind of where we're at right now. Yeah. So that's one thing you could do is to find a builder then that had the margin to give you a locked in price. And that's going to mean you're paying a pretty good profit to that builder, obviously. And there's nothing wrong with that. That's just you know what you're getting into. Second thing is you can wait and just sit there and rent a while and let this thing calm down a little bit and then build. And basically what you would have spent in increased lumber packages you might spend on rent.

So I'm not sure you're gaining a lot by doing that. And then the third thing is what you're talking about. Do you guys, you know, is this particular piece of property, it sounds like it's a little bit unique. It's not just a track lot of some kind. It's a unique property that might be hard to replace later if you sold it. I mean, if you sold it, what I would do is go buy an existing home. Okay.

If you're going to sell it. I would say, you know, is there a house somewhere that we could look at that we can find without getting destroyed on price that we would like as much or more than we love the idea of building on this? Because it's just a very difficult time to build right now. Very difficult. Right. So is this lot worth the hassle?

Is this particular uniqueness of this worth the hassle to you? Because, you know, the least stressful path is sell it and buy a house. Okay. That doesn't have a lot of stress to it. You see what I'm saying? Yes, I agree. And even the waiting, it feels like to me the waiting, if you are going to wait it out because you want to hold on to this property

and see if the lumber prices go down and all that, even that feels so unknown. It's like when? When will that happen? I don't mind doing that if you owned, but while you're sitting there renting, I'd be tempted to, and you're ready to get back in the market. You know, you got out of the market, you're ready to get back in the market. I'm tempted to just go buy a house.

Yeah. And just be done with it. I have a friend that they're building right now. And they, you know, locked in the contract, all the stuff. This was, you know, I don't know, a month or two ago, several months ago. And the contractor just came back and said, we've never had to do this in 20 years in business,

but we have to use the clause, the addendum, that says we can increase the price based on the materials going up. We're so sorry, da-da-da. And she's like, how much? And she doesn't know.

And it is, it's such a stressful time. People think like, well, the real estate market's crazy, so I'll build. Building is not a less stressful route. No, no, no, no, no, no, no. It's not.

It's not. It's not the, it's,, so I'll build. Building is not a less stressful route. But add to that then ever-increasing prices. And, you know, on a home it's even worse because it's more emotional. Yeah. Like we're building a conference center up here on the hill. We're breaking ground on it next month. And here on our, you know, in the Ramsey complex or whatever you want to call it here, whatever this is, campus. And, you know, they just gave me the steel prices doubled. And that's like millions of dollars i mean it's a lot of money but i wasn't nearly as emotional about that as i would have been if it was my house it was you know because it's like my house you know right and sharing

and be going you know and all this stuff so yeah it's you know it's just like oh crap that sucks but you know so quickly by the steel so we don't go up again on us but but yeah it's the same thing but it's it's more detached because it's a commercial deal you're not living in it yeah yeah and um still a lot of money but it's still it still piss you off but it's not as bad it's something more emotional when it's your home because part of building a house is just like a dream right you're doing you don't build something you don't like it's very unique to you i'm customizing it. I'm picking the colors.

I'm doing whatever and all the maybe the floor plan and everything, you know. And so part of that is that the emotion of that is just building a dream. And the danger is people think they're, you know, building their forever home, their dream home or something. And if it takes 12 months to build it, by the time you finish, you have new dreams anyway. Right. You can never keep up. But, yeah, it's a hard time emotionally to go through that right now. And there's a lot of those clauses, like you're talking about, are being activated for the first time in 20 years.

And nobody ever thought about them being in a contract before. Right. It was standard. We just looked over and went, ah, whatever. Yeah. You know, they're not going to do that. Right. And they never have.

Right. But when something goes up stinking 25%, 30%, they have to look at it. And they do look at it. Because, for instance, lumber is the largest item on your budget. By far. By far. The highest of all the things in the components of the home. And then when it says 25% on that, that's like a stinking

10-15% on the whole house. Right. It's a big deal. Right. This is the Ramsey Show. We'll be right back. Christy Wright Ramsey personality number one best-selling author is my co-host today this is the Ramsey show Louisa is in Charleston South South Carolina. Hi, Louisa. How are you? Hey, y'all. Thank you so much for taking my call. Our pleasure. How can we help?

All right. So here is my situation. I am sitting on in my savings about $110,000 that does not include my emergency fund. And at the end of the school year, I am resigning and I'm starting a new career totally. So I'm wondering what to do with that $110,000. Where should I invest it? So if I need that cash quickly to replace my salary, I can get it. But also I don't want to just be sitting there not appreciating which direction, which type of investment could do that for me. Well, what are you going to be doing? I'm going into real estate full-time.

You're already licensed? I'm going into real estate full-time. You're already licensed? I'm already licensed. I've dabbled, but the market is hot, and you have to have time to commit to that, and I don't with my current position. In dabbling, have you sold any houses? No. I've listed a few, and then no. that's the quick answer did the listings not sell no the people did not want to sell they ended up changing their mind and they wanted to buy

an investment property and so we're we're looking okay So you had one listing? Yes. Okay. All right. So you're starting really from scratch in the real estate business, having never really done a transaction. Never. Not once. Real estate is in my family, so I've been around it, but brand new. You married?

I am. What's your husband make? He makes conservatively $52,000. Can you guys live on that while you're getting started? We... No, no. We would need about $8,000 more to be in the clear to break even eight thousand you don't make eight thousand now no no no no that would be just on his salary

just to live on but what we i'm sorry eight thousand more than his income? No. On top of his income, we would need $8,000 more. In a year to live on. So you could live on, what did you say? Oh, a year. Yeah. Oh, geez. Okay. I was like, we're missing something here.

Okay. I thought a month. Sorry, a year. I thought a month. No, no, no. No, no, no, no. Well, we don't need to worry about a year because surely to God you're going to sell a house in a year.

I'm worried about a month. Do you all combine your finances, Louisa? We do. Okay. Just checking there. Okay. We've got two kids. Yeah.

Take care. Okay. So you're a few hundred dollars short a month of being able to cover it with his is all. Yes. Okay. 700 bucks. Whatever. Something like that. All right right um well there's a

couple things you can do one is you can just leave it all sit there it's not going to earn anything and it's it is truly your backstop uh but we need to budget out and say okay we're going to go six months with no income and what are your real estate expenses so you need six thousand dollars to cover that and your real estate expenses. So, I mean, if we set aside $20,000 and we leave it sitting there to make sure that you can supplement your household income, your husband's income in order to cover until you get some coming in and cover some of your expenses because you're going to have some expenses in the real estate business. Agreed?

Yes, I've already paid for most of those. Yeah, but you're going to have ongoing expenses every month that you haven't calculated in your household budget here. So I'm going to set 20 of the 100 aside, and I'm going to put the other 80 in a no-load mutual fund, no-commission mutual fund. I use for stuff like this an S&P 500 fund, an index fund, because there's no commission coming out so you put it in there the only downside is if the market goes down before you pull it back out right and it could

and so if you take that 80 000 and put it in there and you lose uh eight thousand dollars is that going to kill you no no. No. Probably piss you off, but it ain't going to kill you. Is there anything we should watch out for? Well, I mean, if you buy an S&P 500 fund, it's going to do exactly what the stock market does, and the number of times the stock market goes down 10% in a year and does it consistently year after year after year is almost zero. So it does go down, does go up, does go down, does go up.

But the time, you know, and 10% of $80,000 is $8,000. So really you're putting, you know, $8,000 or $10,000 at risk for the hope of making more than $8,000 or $10,000 a year on this money instead of letting you sit there at 1%. Right. That's your tradeoff. Okay. And you've got your other money sitting over here to do your transition with. Right.

This gives you an opportunity to do both. This gives you an opportunity to make some money on the majority of that savings you're talking about and still have some backup for this in between while you're working on getting your real estate business going. It's the best of both worlds. Yeah, and then just keep the pressure on yourself to get some dadgum transactions going and uh once you get the rhythm of the transactions going then you have a steady uh more predictable income based on your performance not based on the fact that it's a guarantee because it's never a guarantee but if you say all right i think i'm gonna make 50 to 100 000 a year i'm pretty comfortable doing this. I'm doing transaction, transaction, transaction.

Then you take this money and you apply it wherever you are on the baby steps. You cash it out of that mutual fund and any money you didn't use in your location fund, it's over and above your emergency fund. Take all that cash and we throw it wherever you're on the baby steps, which would probably be baby step six in paying off your house early, unless your home is paid for. We didn't get that far, but that's what I would look at. Andrew's in Rock Hill, South Carolina.

Hey, Andrew, what's up? Hey, Dave, two calls from South Carolina back-to-back. There we go. I've got a HSA account through my employer, and every year they contribute $300 after we complete some steps as employees. I'd like to take the money from my hsa though about 4500 and put it into a health savings brokerage account what is the best way to do that without triggering all kinds of extra suspicion from the irs uh we endorse a company and i use them personally

called health equity that does just exactly that and they they handle all of our hsa's here at ramsey i've got my personal hsa in there look those guys up and um there's no triggering it's not a problem at all it's a very standard transaction it's not an audit flag or anything like that and uh mine are invested in good mutual funds i started an hsa when george bush first put them in place a thousand years ago and i've done them every single year and I've never taken a dime out and so it's in there growing completely tax deferred tax-free and guess what uh it basically is an additional retirement account for me because I don't use it so moving money from one because my employer only contributes to their preferred

bank but moving money from that bank to, for example, health equity solutions is not going to be any issues there? We've never seen it do that, no. I don't have any reason to believe it would. It would be like just rolling over an IRA or something. That doesn't trigger an audit. It's not a suspicious thing, because it's just very often done where people have large amounts of money. I mean, my HSA's got several hundred thousand dollars in it now and um you know because i've just put up fully funded every year to keep the government's hands off the taxes and then i'd

never use it i just whatever medical we've had out of pocket we just paid it and um i'd rather have that money sitting there growing with no taxes or tax deferred on it. And so that's, again, and I pick just good mutual funds in that, just like I did in a 401k or a Roth IRA. Are you using the HSA here? And we do the same. We did the same way. We just pay medical out of pocket and just let it grow. Yeah. And you've got health equity, of course, as well.

So you can pick mutual funds with it. Same thing. Same exact thing. Very good. Yeah. So the HSAsa the savings portion of the health savings account is what we're discussing here the insurance portion is basically a high deductible health insurance plan that gives you a much cheaper premium and you cannot fund the

savings account if you if you're not in a position to. But once you're in a position to, you can fund it and use it, or you can do like we're talking about and take it as yet an additional tax-sheltered investment account. Very good stuff. That puts us out of the Ramsey Show and the books. We'll be back with you before you know it. Our thanks to James Childs, our producer, Kelly Daniel, our associate producer, and phone screener. I'm Dave Ramsey, your host, and we'll be back with you before you know it. Our thanks to James Childs, our producer, Kelly Daniel, our associate producer, and phone screener. I'm Dave Ramsey, your host, and we'll be back.

Hey, it's Kelly, associate producer for The Ramsey Show. This episode is over, but if you heard about an event, product, or service and didn't have a chance to write it down, don't worry. We list everything you've heard about during this episode in the podcast show notes section or head to theramsyshow.com. Thanks for listening.