The Ramsey Show - App - How Do I Keep My Income Steady? (Hour 1)

Episode Date: July 21, 2020

Retirement, Education, Career, Home Selling, Business, Investing Tools to get you started:  Debt Calculator: http://bit.ly/2QIoSPV Insurance Coverage Checkup: http://bit.ly/2BrqEuo Complete Guide to Budgeting: http://bit.ly/2QEyonc Interview Guide: http://bit.ly/2BuGnZE Check out other podcasts in the Ramsey Network: http://bit.ly/2JgzaQR 

Live from the headquarters of Ramsey Solutions, broadcasting from the Dollar Car Rental Studios, it's the Dave Ramsey Show, where debt is dumb, cash is king, and the paid-off home mortgage has taken the place of the BMW as the status symbol of choice. I'm Dave Ramsey, your host, my co-host on the air today, Chris Hogan, number one best-selling author, Ramsey Personality. We are here to answer your questions about life and about money. Open phones at 888-825-5225. That's 888-825-5225. Jim is with us in Tampa, Florida to kick off this hour.

Hey, Jim, how are you? How are you guys doing? Great. How can we help? Wonderful. Well, Dave, the first thing that I'm going to ask for you is to not yell at me for making a stupid financial decision that I'm about to tell you. I have a rule. The first caller of the hour, I never yell at them.

So you're in luck. Great. Dave, you know, I have been your uh financial principles for uh for a while now uh and um right now our we're on baby step six so we're almost done paying off our home we're actually um you know probably by either the end of this year or the beginning of next year we'll be paying off our home so homes. So we're really good on that. I am very upset because we puzzled into a timeshare. You what?

And you already know where this is going. You what into a timeshare? We got, well, okay, so we got invited to one of the timeshare presentations. And, you know, I'll be honest with you. I wasn't really, I was just really ready to say no. My wife was with me and they were painting a picture to her that I'm not trying to blame this on my wife, by the way. But, you know, they were painting a picture to her that I was like, oh, goodness, you know, I mean, it's kind of hard to say no. Here's my point.

You bought a timeshare. This was last year. This was last year. And we said, well, okay, I guess we're going to get one. So we got one. And, um, I mean, I, we actually already paid it in full. And, um, you know, my question is, should I still try to get rid of it? Because honestly, I'm just upset at the fact that i even got it or should we you know since we already paid for it and i know we still have the maintenance fees and all that kind of stuff yeah should i maybe try to take a little bit of advantage to it you know the advantage of it

you know before i decide to get rid of it you probably don't hear that you know hey i have a paid for timeshare yeah we do but i don I don't hear people pay off their house to go and buy a timeshare very often. I know, no, and that's the part I'm really upset about. Jim, did you initially say that you got hustled into buying one? Well, yes. That's okay. So when we got into the presentation, really nice people, by the way,

but they were like, they won't take no for an answer. Yeah, they're just pleasant. And so because of that, it was like, well, okay, and then we're just like, okay, you're trying to be nice, but at the same time, you don't want to get ripped off. Jim, settle down. Hold on. Jim, you're rambling.

Listen, do you and your wife use this thing? Well, they just got it. You know, we just got it. Okay. I mean, it's completely up to you, brother, whatever you want to do. I think that what you're going to discover is what 97% of the people discover, that timeshares suck, and the fees are going to go up, and you're going to feel trapped into using that unit. All the stuff they promised you about being able to trade points with somebody else

is not going to happen. And the industry is scummy, scammy, and bad news. And you're not going to get, you're going to discover, you're not going to get delivered what you were promised and told by those sweet people who were pressuring the crap out of you, which is kind of an oxymoron if you think about it. But the, so, I mean, you know, if you want to play with it for a year or two and discover all this for yourself, you do whatever you want to, man. It's your money.

I mean, but I think you're going to get not only increasingly disgusted with yourself for having bought it, but increasingly disgusted with the whole process. Yeah. And I think that's what you'll discover. But it's okay if you wait until you get there before you pay time to your exit team to get you out, you know. Right, right, right. Well, initially I was hoping, oh, man, you know, maybe I can get, like,

a refund, especially during these times that I know that's not realistic. Not from those people, no. Yeah, and so I would give anything to go back in the past and not do that. They don't let fish off the hook once they got one. I think you're just going to wallow in it until you get disgusted enough to pay somebody to get out of it, but you're not only going to lose the fee you pay Timeshare exit team to get out of it, you've lost all the money you put into it.

So given all of that, you may want to, like Chris said, you may want to play with it for a year or two and just see. But I think what you're going to find is you're going to get increasingly disappointed in the organization because they're scummy and scammy. Yeah. And I would say this, Dave, I think we all have to go through our stupid tax phases. We all have to, and I think the learning thing from that is, all right, a couple of things. I tell people, you want to make two-year decisions.

You want to make a decision that you look back on in two years and you're glad that you made it. And if it sounds too good to be true, my friends, then it is. It truly is. You know, the industry, the timeshare industry, is widely known for putting you into a room and pressuring you like no one else, like no other business does, and lying and cheating and making promises that they don't keep. They've had hundreds of thousands of dollars of fines. They've settled lawsuit after lawsuit for fraud. It's a known scummy business.

Most people kind of know that. Jim knew that. And then if you know that, then there's another part you need to know. And do you know yourself well enough to know that you have trouble saying no? Now, me, I mean, I do talk radio. I eat conflict for breakfast. Yeah, you don't have a problem saying no. I don't have a problem saying no.

No, you don't. No, Chris, no. I've heard that a lot. I can just say no. I mean, I've gotten real comfortable in my own skin, real comfortable. So I'm not even going to be in the room to start with because I don't want to be in a room where people have to take a shower after I'm in a room with them. But, Dave, it's a free dinner.

And so it's a free vacation for the weekend in a crappy butt little dumpy hotel room. And so just go buy you a crappy butt little dumpy hotel room. You'll come out much better off. Cheaper. If you know about yourself, like I know about myself that I don't have any trouble saying no. I'm still not going to enter it just because I don't like being around that kind of people. They're just gross. Right.

But then, in addition to that, if you're just a person who says, you know, my wife is that way, she can say no, but she wants to avoid conflict. Let's everybody be happy. Everybody's not going to be happy. And so she would be in there. If she knows that about herself, she knows if she goes in that room, she's about to she's about to get tattooed it's going to come off bad that's right and so if you know about yourself that you have trouble saying no that's right for god's sake stay out of those rooms yep because you're going to come out of there owning a freaking timeshare hey davis like my buddy every year at the beginning of the year he would go look at trucks yeah i told him one of them is

one of them is gonna jump the keys are gonna jump in your pocket go get the payment he didn't didn't hear him for him for two weeks i said what happened we made a bet he goes i got the truck i said you got that payment didn't you i said stop looking dummy go home people will read consumer reports and study for for 73 hours which $600 phone to buy, and then they impulse an $80,000 Porsche. The same dadgum guy. It's a problem. It's a problem.

If you know this about yourself, protect yourself from yourself. That's a good rule, because otherwise you get to have these problems. Oh, I'm so sorry, Jim. Sorry you got this mess, man. But you'll figure it out. You'll get'll get through it this is the dave ramsey show most people's money problems come from not paying attention that's why before i spend a dime of my money on something i do the research and i make sure it's going to live up to what it claims. Recently, I got a great pair of sunglasses from a company called Shady Rays. When you're looking for sunglasses, it feels like your options are limited. Name brand sunglasses cost too much

and the cheap knockoffs are ugly and they don't really protect your eyes. Discovering Shady Rays is a game changer. With Shady Rays, you can count on premium sunglasses that protect your eyes and get this they're affordable they give people the best overall value in sunglasses they also replace your shades with a brand new pair if you lose or break them from day one of your purchase plus they offer an exclusive for ramsey show Right now, you can grab most polarized pairs for just $28 at ShadyRays.com with the promo code DAVE to get $20 off your first pair of Shady Rays. Thank you for joining us, America. Matt is with us in Palm Beach.

Hi, Matt. Welcome to the Dave Ramsey Show. Thank you, Dave. I'm a relatively new listener. I've been listening to about six months. I found you on my podcast. Cool. Thanks for listening. I appreciate everything you do for us. Thanks. I have a question for you. I'm self-employed. I make a very good living. My 401k, I've been

contributing a ton of money to between myself and my wife. I've got a rental property that I owe about $40,000. I have a home equity line of credit on that. So I'm paying, it'll be paid off in a year. My mortgage is about $250,000, and I've got about 10 years left on that. So I was thinking of stopping my 401k contributions for the next couple of years, pay off my main house, but then my tax implications would be, you know,

a ton of money. Not really. Well, between my IRAs, my 401ks, we contribute to the last two years $84,000 a year. You're not doing Roths? No. How old are you? I'm doing it for the

I'm 54. Okay. You probably ought to be doing Roths anyway. The tax implications are not worth what you're losing on the back end because the Roth grows tax-free, and none of this is growing tax-free. It's all going to be taxed on the back end. And it sounds like you've got a couple million in there already, do you? No, I've only got 800,000.

Oh, is that all? Okay. Well done. Good job, sir. you're a millionaire i love it uh at 54 good job yes so um what what i would tell you to do is you're not going to be touching this money maybe ever you know in depth you're not really going to go into it and so from age 54 to age 84 that money growing tax-free versus the tax uh deferral not not not not never pay the taxes but the tax deferral on the 84 000 that you're putting in now i think just the forget the house for a second just the discussion of whether you do a Roth or a regular. Because you're not going to be accessing that money anytime soon, the tax-free growth is mathematically going to kick the tax deferral on the small amount.

Does that make any sense? Okay, let me try it this way. $84,000, let's just say $84,000 a year going in for 20 years. Okay? $84,000, let's just say $84,000 a year going in for 20 years, okay? So that's $1.6 million that you put in. That would have grown, though, over that 20 years to probably close to $10 million. Because usually when you've got an account that's 20 years old or older, typically 95% to 97% of what is in the account is growth not what you have put in when you look at your contribution to get to the 800 versus how much of it is growth

you'll see what i'm talking about okay yeah so the fact that that let's say out of that 800 as an example 700 you put you didn't put in and you got to pay taxes on it if it was a roth there'd be no taxes on seven yeah i understand that i just hate coming up with an extra 20 grand in taxes yeah well do it do that or come up with an extra 200 grand in taxes later yeah that's the problem yeah and matt let me you this. What's your household income right now? It's over $300,000. Okay. You're slaying it. Yeah.

And so, I mean, the aspect of you attacking and paying off the house, you can do both. Yeah. Yeah, you can do both. It's not an easy thing. I mean, that's what I've been trying to do now, yeah. Yeah. Yeah, I would do 15% of your income going into retirement, which is probably about what you're doing, actually.

Pretty close. And then just let's knock that house out and i think you're going to knock it out probably in about five years not ten and you're you're doing so good you can't really mess this up all we're trying to do is just maximize it that's right and so if i were in your shoes i'm 59 what i would do is I know you're not going to touch the vast majority of that money. You're not going to need it. You can live off the income of some of it without ever actually accessing what has become the principal, the original amount you put in plus the growth. And if that is sitting there tax-free, it's great for the next generation,

or it's great for you if you want to access it. You've got enough taxable already at 800 if i woke up in your shoes sit down with one of our smart investor pros and run the math with them they'll show you um i i would go 100 roth absolutely and dave i don't think people understand when you utilize a 401k or 403b and it's tax-deferred, that means you pay taxes on this money later when you pull it out. And so you don't have that on the Roth side. And so people are thinking the tax deferral, and we're saying, no, no, choose the non-tax option all the way. Yeah, non-tax versus tax.

That's right. That's right. But what it is is he's saying, and he's correct about this, that when he puts in $84,000 in a traditional, he's saving $20,000 on this year's taxes. On this year's, correct. Yeah, and that would be about right. Right. Okay. But the growth on that is so much more, and that all being tax-free, you're saving $20,000 today, but you're going to lose $200,000 later.

There you go. There you go. Because you didn't go tax-free. That's exactly right. And so even though I don't want to give the government anything that I didn't go tax free that's exactly right so even though i don't want to give the government anything that i don't have to that's right they got enough right because well they don't have enough because they're so stupid with what they do have but either way it's the island of misfit toys up there but the uh so the the thing

is the um now if you have a horizon of 10 years or longer before you're going to be accessing the money, Roth versus traditional math almost always works, assuming you're using a good mutual fund with normal growth rates in the market. That's what we're doing. Will is with us. Will is in Tallahassee. How are you, Will? Good. How are you? It's an honor to be talking to you.

You too, man. What's up? So I just had a question on kind of what's my next steps in kind of my financial plan and building wealth. I'm 19. I'm currently going into my second year of college. I make around $6,000 a year, and that's before, because I work on commission, too. That's before commission. I have all my school paid for. I have a Roth IRA. I didn't know if I should go into a low-cost index fund, or what should my next steps be? The fact that you can even ask that question makes you a rock star. At 19 years old.

You're amazing. Thank you. Did your parents hold you down and have investment parties? All I was asking is what beer is on tap? So it really came from, I guess, kind of my dad came. He didn't really start getting serious about his finances until he was around 40. He was making a lot of money when he was younger like me, but he was also spending a lot of it too. I don't want to be put in that position. What are you studying, sir?

Right now, I'm a finance major and I plan to get my MBA because I'm a year ahead. So I plan to just go on a combined pathway. So I finish my bachelor's in two more years and then get a master's degree. Of course you are. Okay. And then you're coming to work for Ramsey Solutions, right? Okay. You'll take Chris's place. No, my place, because I'll just step aside and let him have it.

I'll be gone by then. You can train him up. I'll be retired. All right. Chris? No, Will, I love the path you're on, buddy. And the fact that you are using your parents' example to be your motivation is outstanding. The fact that you have school paid for, I absolutely love that.

I would point you in the same path that we would tell others. The growth stock mutual funds are going to be the way to go. You're doing that at age 19. Buddy, you are going to be an everyday millionaire on a faster track than many people ever thought could be possible the thing i would tell you is not only do you need to play offense in building wealth you have to play defense and what that is is avoiding stupid around every corner because it's out there bud and just learn to save up pay cash you can have nice things just slow down and be intentional yeah well um before you do that, I would add one thing. I want you to pile up a big pile of cash in case something goes sideways with one of these scholarships.

Because the best investment you can make in this discussion is called will. Yeah. And the return on investment of you finishing your degrees 100% debt-free because you had a little extra cash pad. You can pull it out of that no-load mutual fund if you want to. But I want you to get out of school debt-free, because, dude, you're going places. You're doing well. Way to go, man. This is the Dave Ramsey Show. Families all over the country are discovering a faith-based and budget-friendly way of meeting

health care costs, whether they're anticipated or completely unexpected. For example, take the Olcheski family from LaGrange, Texas. Jeff and Carice had just celebrated the birth of a new baby boy. Shortly after, they had another expensive medical issue come up. They could have faced a huge financial setback. But thanks to Christian Healthcare Ministries, the Olcheskis were spared from a ton of medical bills. As members of CHM, they're part of a group of believers who financially and spiritually support each other. CHM is the longest-serving health cost-sharing ministry and is a Better Business Bureau-accredited charity. It's Christians helping other Christians.

And it shared nearly $97,000 to help the Olcheskis. To be a part of Christian Healthcare Ministries, visit chministries.org. That's chministries.org. That's chministries.org. CHM is a proud sponsor of Dave Ramsey Live Events. Our question of the day comes from Blinds.com. Find out for yourself why Blinds.com is the number one online retailer of custom window coverings. You get free samples, free shipping, new promos all the time. Find out for yourself why Blinds.com is the number one online retailer of custom window coverings. You get free samples, free shipping, new promos all the time. Always use the promo code.

It's magic. The word is Ramsey. You'll get the best deal. Chris, our question. Yes, we got it here, Dave. This comes from Michael in South Carolina. He says, I'm 54 and my wife is 53 and we have $751,000 in a 401k plan. when that happens i know the funds are invested well they're performing well got a long track record of performance we're debt free except for the mortgage which will be paid off in 2023 or 2024 my wife is a diabetic

we'd like to retire in four to five years but wonder how we can acquire insurance for my wife household income is 115115,000 and we're investing 15%. Do we have a chance to retire before we're eligible to use Medicaid or Medicare? How might that happen? Well, here's the thing, Michael, you absolutely have an opportunity to be able to retire. You guys are focused, not finished, you're attacking the house, going to have it paid off in the next three, four years tops. But insurance-wise, I'm going to point you to one of our insurance ELPs so you can start to walk through and understand what's available to her. Even with this pre-existing condition, there are options that are out there.

You need to get a pro in your corner so you can walk through on the insurance side. On the financial side, keep chasing down, knocking down that mortgage. You can be debt-free completely and also be close to being an everyday millionaire. Yeah, I think you're going to, the only barrier for retirement is the insurance, and that's the way you phrased the question. I don't disagree with you. Diabetes, as you guys already know, is an insurance nightmare. Yeah. And so you'll have to find a good independent insurance broker, and our ELPs are just that. And that means they can shop among different companies in your particular situation. The phrase insurance people use is they're trying to make a market.

If you hear that phrase, then you're on track. Make a market means we're taking your particular situation and finding who wants that type of business badly enough to not charge you through the ears for it. An example of that was, you know, my home, because of its value, is an unusual property to insure. And it's an unusual property, too. It sits up on a hill, gets struck by lightning all the time, all this stuff. So when the insurance when they get ready to insure it not everyone wants to insure that house that's right not everyone wants to insure an expensive car a super expensive car and so they have to go find

insurance companies that want that type of business and yes it does sometimes come at a premium and but they're making a market That's what you're looking for. And the only way you're going to get that is with an insurance broker, not a captive agent. So you're not going to go to State Farm and get health insurance. It's not going to happen. Not reasonably priced anyway. Right. So, yeah, I think that's where you put your hustle.

And you just continue to add to your 751k ding ding you did it and you continue to um you know the house will be paid off before retirement according to your numbers here and you've done a great job and so chris is exactly right just continue to work your plan push it through and you're going to be right where you need to be baby you're doing good mat good. Matthew is in Columbia, South Carolina. Hi, Matthew. Welcome to the Dave Ramsey Show. Hi, Dave.

Hi, Chris. Honored to speak to you guys. I'm a long-time listener, and I'm excited to actually ask you my question. Okay. So I live currently in Columbia. I'm from Charlotte, and I moved down here with my fiancée from the area. And currently I have a home home and we're staying together. And right now with the coronavirus situation going on,

I've been working from home and now I'm back to working at my job site. So I'm kind of on edge about the security of my job currently and with the home that we have that we purchased. I'm just trying to think of best options of how to make sure I can take care of the home. And I know you speak of emergency fund, but I kind of want to get more advice about some things I'm going through as far as keeping that foundation together. Yeah, when are you getting married? December 31st.

Why? We won a New Year's Eve wedding to try to celebrate the New Year, so that's kind of where we wanted to kind of go from there. Yeah. You don't own the house you're in together she owns it right no i we i own it we own together you own it together both your names are on the deed yeah well my name's on the deed she's on the yeah we're both in a d yeah we're both on d oh crap okay um and you own the house from before the relationship back in charlotte right no so i moved to columbia and i own the house from before the relationship back in Charlotte, right? No. So I moved to Columbia and I purchased the house when I moved to Columbia.

Oh, okay. So do you have, is there two houses involved or one? There's one. Oh, I got confused. I'm sorry. Okay. All right. Well, I mean, you can do whatever you want to do. Obviously you're a grown man. You call and ask us what I would do. I think you're in a perilous situation legally and relationally and spiritually. And so if I were you, if you were my little brother, I'd put my arm around you and I'd say, Saturday. Get married Saturday.

And celebrate New Year's as an anniversary of your wedding six months from now and Saturday. Because you are not what you're trying to act like with your finances that you're married and legally you're not. So really what you are is you own a home with your roommate. This is a partnership with no partnership documents. Let me help you with this. She dies in a car wreck. You now own, and she doesn't have a will. I know that based on the way you all are acting.

She dies in a car wreck. You now own a home with her mother and father. Well, that sucks. Right, yeah. And this is the stuff I've gotten to deal with over the last 30 years. It's the problem of setting up house before you're married because it sets you up. And the other thing is it sets up all kinds of relational issues because it's hard to combine money when you're not have not combined your thing. So all of that to say spiritually, emotionally, financially, everything else legally.

I not real romantic, but you already cut your path here. So Saturday, I'd be married, you know, unless it's Friday. But, Chris, where do you want it? No, and you were talking about how do you keep your income steady. What line of work are you in, Matthew? I work in manufacturing. I'm actually in grad school currently, trying to get my MBA also. Okay.

That's how you get your income. You want to be super intentional with what you're doing as you're working and doing whatever you have to do. But I agree with Dave. You all going to get married, get focused, being a true team and working together, then you can be

in alignment and start to really set goals together. I'd encourage you all both to go through financial peace. Once you get that situated, get plugged in to Ramsey Plus, and if you get married in the next 30 days, I'll gift it to you. We'll just give it to you anyway. It's your wedding gift. Dave, I was trying to motivate him.

I know, but you're like Santa. Well, I wasn't in the first part of the call, so now I've got to be nice. You're soft now. I completely interfered're soft now. That gone. I completely interfered in his business. You gave him good guidance because you're right. He didn't call me about that. But here's the reality.

Him not understanding that owning the house with these two people, her parents, that he has no idea about. And we've seen this in coaching. He's going to be forced into sale. We've seen this in coaching. He's going to be legal fees. No, you're absolutely right. It is a financial nightmare.

And so, cautioning people out there just to slow down, people. Slow down and think ahead. Seriously. There's a study that talks about doing things in the right order. Yep. And how that is an indicator of wealth. And it doesn't apply necessarily to Matthew's situation exactly, but buying a house before you're married together is in the wrong order because it can cause you so many troubles. And that's all I'm caring about, Matthew.

I'm just trying to help you, man. And if I got up in your grill too quick, I'm sorry. But the whole poverty study, it talks about if you will graduate from high school before you get married or have a baby, if you will get married before you have a baby. They call that the success linkage. And almost all of your poverty data is when you get those three things out of order. Out of order. You start having babies before high school grad or you don't graduate high school. If you will graduate from high school, be over 20, 21 years old before you get married and wait until then to have babies, your chances of being in poverty go down like 94%.

Whoa. That's what the data shows. So it's, I don't know if it's cause and effect. I'm not sure which one's causal, which one's the result, but it's there. This is The Dave Ramsey Show. Thanks for joining us, America. We're glad you're here. Open phones at 888-825-5225. Derek is with us in Denver.

Hi, Derek. Welcome to The Dave Ramsey Show. Hi. Thanks for taking my call, both of you. Sure. What's up? Let's see. I apologize.

I'm a little nervous here, so if I talk too fast or whatever. My dad passed away late December of last year. Sure. And he was taking care of my mom in the house and mom is now in assisted living um that we got her in good position good place her expenses are 43 to 4500 a month but she gets a pension of about 2000 um we are selling or in the process of uh just about to close on the house that they lived in. And dad put the house in a trust that technically my sisters and I own, but we have all agreed that my two sisters and I, that the money is to take care of mom.

When all is said and done, after the sale, the long-term cap gains, loan repay, and some sale expenses, there's going to be about a little over $300,000 left. Okay. How old is your mom? My mom's going to turn 81 in October, so she's 80 right now. How's her health? Okay.

Not great, but okay. She's dealing yeah he's okay these are tough times for y'all i'm sorry i'm sorry so i'm sorry i interrupted you what's your question uh so it's a two-part question one is uh once we get the check for the house a little over 300k uh do we just put it into uh one account and pay all of mom's expenses out of there? Do we take some of the money, put it into some kind of high interest earning account and the rest in a bank account to pay our expenses? Do we distribute the money between all three kids and then say, hey, you got, you know, you have to pay this much a month to cover mom's expenses? Or I guess that's the first part of my question.

Since your sister's in agreement, my opinion would be, and I'll see what Chris's is, but my opinion would be $300,000 invested in some good mutual funds. Here's the thing. Your burn rate is about $30,000 a year from what you told me, right? You're about $2,500 a month in the hole, right? Yeah, that sounds about right, yeah. That would be $3,000. You said $4,300 and month in the hole, right? Yeah, that sounds about right, yeah. That'd be $3,000. You said $4,300 and $2,000, right?

Correct. Yeah, so I heard $2,500, and that's $30,000 a year. So your burn rate is $30K. You need $30K a year. If $300 produced 10%, it would produce enough to support without damaging the 300. Now, it won't necessarily do that every year. Some years it might produce more. Some years it might produce less.

But even if it averaged 10%, you guys are basically going to end up with close to the 300 to distribute to the three of you when she passes. Okay. If you can get the money to invest it. three of you when she passes. Okay. If you can get the money to invest it. And you see what I'm doing. If it makes 8%, it's going to eat some of the money. If it makes 12%, it's going to grow.

You follow me? Gotcha. Because you need 30 out of this money. And if you can make the 300 produce 30 or more, the whole 300 will still be sitting there. You see I'm doing the math yes i do and so that's what i would do with it is i would sit down with one of the smart investor pros and pick out some mutual funds and um try to get something that's fairly stable probably some growth and some growth and income i probably would stay away from the normal

international mix on this and i might have a littleive, but I don't know that it'd be a fourth or a third. But sit down and try to get together a portfolio. But high yield, when you say that, that usually means CDs. And that's going to high yield CDs 2%, which means you're burning $30,000 a year. And after 10 years, $300,000 is gone. Yeah, Derek, he's dead on. And I'm going to tell you this. Here's the unique thing about you all situation that I'm proud of you, that you and your sisters are in alignment. You know, that's like a rare unicorn type situation. And so rather than to wait on that, I think you take, as they've suggested,

put that in a growth stock mutual fund, have this awareness and understanding. You know, you could have the document drawn up that, you know, what happens in case one of you, whoever the executor is, you want to have the person that's the secondary. But the agreement is, the primary goal of these funds is to take care of your mother. Yeah. And whatever's left when she passes, we just distribute it three ways. Then, rather than, and you can give, you know, like, for instance, say you were managing it or one of your sisters were managing it with the SmartVestor Pro, each one of you can get a statement every month and see what's happening with the money.

You know, y'all can look at it, and you can even do a little review over the phone once a quarter right and just go okay here's where we are you know we needed seventy five hundred dollars for this quarter three months of twenty five hundred and the mutual fund made ten thousand so we're we're more we grew a little this month or it made it made six thousand and you know we just ate fifteen hundred of our money you know and you just kind of review it so that and if you'll do that incrementally throughout the year at least once a quarter every six months then later on someone doesn't look up and go well he stole all the money that's exactly you know you don't get that later yeah and if y'all don't do that but that's what hillbillies do that's me that's what people like me do and if your sisters happen to be married to crazy that that's husband or spouse could cause that rift so

stay aligned take care of your mom you guys are uh lots of communication yeah communication is key and as dave said get that copy of the statement to everybody so we all see everybody's on the same page and we can be in alignment you know what i would go further i would even just write it up a little agreement job one is take care of mom yep with this money job two is have the money invested to where it creates enough income to hopefully take care of mom without damaging it. And then job three is to distribute the money equally and have equally upon mom's passing. And in the meantime, have quarterly updates. And everyone sees the account and knows what's going

on and can discuss and has input boy that'll eliminate some drama man it just because what happens is is that people when people don't know what's going on that's when they become uh crazy oh yeah or and i'm with chris though congratulations hats off to your family's beautiful people that you you can immediately collide with your sisters and go, this is not about you getting money and going off to Vegas or going on a trip. This is about like you like anything where you could go on a trip right now. But but, you know, it's about taking care of mom, which is as it should be.

That's what it's supposed to be. By the way, it was her freaking house, you know. So there you go. Wow. Good job, man. Well done. That's just some ideas. You could go out go wow good job man well done that's just some ideas you could go out a lot of different ways but that's probably how i would do it and that's kind of what this place is about how chris and i would do it today chris hogan my co-host today

ramsay personality chris is another chris is in boston hey chris in boston how are you doing well how are you better than i deserve what up? So I have a question about investing in my side hustle. So I work full-time and essentially do firewood on the side. The issue I ran into recently was that my log splitter basically broke. So my way of earning money on the side died. Question about do I kind of just get it going again and see what I can do? I don't know what it will take to get it going again, or do I try to invest and move up and do one that will help my productivity

and be able to make more money on the side? So how much have you made splitting wood? How much money have you made? I can go on the side anywhere from $8,000 to $1,000 a month. $800 to $1,000. And what's a wood splitter cost? Probably like $4,000 for the one I was looking at. Yeah, $4,000 or $5,000.

All right. And so how long does it take you to break even? My only expenses are fuel and maintenance on it, so it'd be probably six to seven months. Yep. You're on the catches i'm on baby step number two so i'm working on paying off all my debt yeah yeah and so uh you know what i'm gonna do is uh repair the old one yep elmer's glue rubber band duct tape

i'm gonna repair the old one if there's any way you can. What broke on it? The hydraulic lines ended up catching fire. The hydraulic lines busted and it caught fire? Yeah. Yeah, it's oil-based. Yeah. Hydraulic fluid.

Yeah. It was a hot day. It caught fire when it hit the... What burned? The lines? So the lines, the engine, the air filter, so there's like a whole lot of gas on it.

I'm going to step two then. Buy used. That's exactly right. Or step three, Dave. Rent one. Rental. That one's gone, yeah. He's trying to justify buying new equipment, Dave. We're not having it. Well, I wouldn't. I wouldn't spend that kind of money on that kind of a return.

If you can make your money back in 30 days on a side hustle on Baby Step 2, fine. That's right. But not seven months. Ain't happening. Done it before, though. Splitting woods is not fun.

That's like real work. This is the Dave Ramsey Show. This is James Childs, producer of the Dave Ramsey Show. On your smart speaker, you can add our skill by saying, Alexa, open the Ramsey Network skill. From there, you can listen to all our shows.

Ask Dave money questions like, how do I invest my money? Or what is the debt snowball? Find out more at DaveRamsey.com slash smart speaker.