The Ramsey Show - App - How Do I Know How Much Life Insurance I Need? (Hour 2)

Episode Date: January 2, 2023

Dave Ramsey & Ken Coleman discuss: Term life insurance, Internships, Selling a home vs. renting it out. Have a question for the show? Call 888-825-5225 Weekdays from 2-5pm ET Want a plan for your money? Find out where to start: https://bit.ly/3nInETX Listen to all The Ramsey Network podcasts: https://bit.ly/3GxiXm6 Learn more about your ad choices. https://www.megaphone.fm/adchoices Ramsey Solutions Privacy Policy

Live from the headquarters of Ramsey Solutions, broadcasting from the Pods Moving and Storage Studio, 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. We help people build wealth, do work they love, and create actual amazing relationships. Ken Coleman, Ramsey personality, number one best-selling author and host of The Ken Coleman Show, is my co-host today.

On Ken's show, he talks about careers and talks about the idea of getting a job, getting a, you know, actually getting employed, number one, but then doing it in such a way that you're working for people you love and love working with and making actual money doing something you care about. It matters a lot. It changes the whole formula, doesn't it, Ken? It really does. If you think about our relationships and then our work, those are the two most important things to us as humans. And sadly, so many people still think that work is just something that we have to put up with. I'm just going to deal with it. I'm going to deal with crappy leadership or toxic co-workers or just being bored doing something

because it's a good check because it's the only thing I can do. And we slog through a week just feeling like, well, I'm duty boundbound and not realizing that there's a unique contribution you can make where you get paid really well and you enjoy your work. And it's possible. And you know, listen, getting out of debt many times is the greatest step to stepping into that dream job because now you have no limitations. And so this all works together, not to mention, as you've said many times, your income is your greatest wealth-building tool. So we want to help people win at work so they're winning in life. Open phones, you can talk about that or whatever you want to.

This is the Ramsey Show. The phone number is 888-825-5225. Josiah is with us in New Hampshire. Hey, Josiah, what's up? Hey, Ken and Dave, how are you both? Better than we deserve, sir. How can we help? Glad to hear it. I'm 25 years old, married, and debt-free in baby step four, and applying for term life insurance. So I'm going through Zander and got approved for $500,000, but I'm wondering whether I should go with a 20- or a 30-year term,

my thought being if we're debt-free now, in 20 years I'll be 45. Will I have a net worth high enough to not require that insurance? Or should I go with the 30 and stay insured until 55, at which place I can be more confident that we'd be there? How's your health? Health is good. You smoke? No, nope, non-smoker.

Are you obese? Nope. Okay. I would buy a 20-year. Okay. Now let me tell you how I did that, okay? Here's what actually happened with me. Knock on wood, I've been healthy as a horse my whole life, okay?

Hardly seen the inside of a hospital unless I was visiting someone else. So, um, what happened was I bought my first term life insurance when I was your age and, uh, I bought a 15 year level, but then what happened was we added kids, we added income and I wanted to upgrade the insurance. And so I had a choice then of buying yet a new policy and getting rid of the old one or just buying additional. So like I bought $500,000 in your case, okay? Later on, I might buy another $500,000. But that might be three years from now or five years from now.

And as you've noticed, it's not very expensive. Doesn't cost much money and so what's going to end up happening is you're unless you lose your health along the way your ability to get insurance you're going to end up adding policies or buying whole new policies and starting the clock over gotcha so you don't need a 30 you're going to end up buying a series of policies or replacing the earlier policies as you want more and more and more depending on which way the math works the best and um then you're going to be in a position to begin dropping them later or when you look up and you're 45 and you go we're 100 self-insured you just cut the cord on the whole thing and let them let them float away.

But what ended up happening in our case was I've added policies every five years or so from 25 all the way up to 60, not 60, about 50-something, and I kept some policies even though I didn't need them recently, just SWI Sharon wants them. And it really didn't have anything to do. I mean, it wasn't like she's not, that policy is going to make the difference whether she eats or not. It's kind of silly. But even those policies are starting to expire now,

and we're definitely not going to buy them even if she wants them. I'm done with this. So we have convinced her that she's okay. I think I've got an acronym for that one. What? If Sharon wants it as SWIi you just came up with a new one d dc dave doesn't care ddc you're not doing it you're done well i mean it's it's you know she's okay and she knows she's okay now and that's gotten rid of the that need but what ends

up happening is you're not buying one policy that's going to serve you throughout your entire life you end up adding that's incrementally as you go along and so five years from now if you buy another 20-year policy or another 15-year policy you just started that clock over on that portion the other one when it expires you're probably not going to renew it you know 20 years from now that's where i am at you're describing our journey as we begin to have kids three kids you added as you went along yes added as i went along obviously we were able to to upgrade in-house over time and so sitting with our smart investor pro we determined what that right amount was and i it was like three or four years ago i just did it and so that'll probably be the last one obviously i mean we shouldn't need it at all so that you describe exactly the journey that that i'm in and i'm i'm 23 years older than him now but the way

our brains work and i did the same thing josiah when i was your age i'm thinking well if i want to just get a 30 and i'm done it's over but it really it's it's more life that comes at you in layers rather than linearly like well explain to young folks so if they're getting ready to start a family what you recommend when you go from a couple no kids to one kid or two how you the whole time i'm just saying you know 10 to 12 times your income because when you're 25 if he's getting 500 000 then maybe he makes 50 grand okay if something happens to him you know she's got 500 000 bucks if she's got one if she got a little baby she's still got 500 000 bucks invest that at 10 in a good mutual fund if it's making 10 it would pay off pay out 50 000

bucks we've replaced his income without even touching the principal and so that's the idea of 10 to 12 times your income on on you and guys you got to go to zander insurance to get a quote if you haven't done this because the deal is people are blown away how cheap term life insurance is and it's gotten cheaper over the years oh yeah i mean i bought some one time at 45 and i came back in my 50s to buy more and even though i was seven or eight years older it was cheaper yeah because the rates had come down because they're using better and better and better actuarial tables that are more modern and reflect the health improvement. They were using tables from the 1940s. Oh, yeah.

And then they started using tables from the 1960s, and now they're using tables because life expectancy has changed. Yeah. And, I mean, it's already cheap, but if you have the preferred health designation, I don't know if that's what they call it, it can make a lot of money. I like to recommend this to dudes. I dropped weight like a wrestler three years ago when I did it. Super disciplined, Dave. Yep.

And I got the preferred rate and saved. Got more, but still saved. If you smoke, it's double. Oh, yeah. It's double. Yeah. Double. That's why I asked if he smoked or he was obese. Yeah,. If you smoke, it's double. Oh, yeah. It's double. Yeah. Double. That's why I asked if he smoked or he was obese.

Yeah, that's right. Because it's double. All you got to do is just quit smoking, and it cuts your insurance in half. Oh, and it saves you on all the cigarettes. Oh, and it saves you on all the health problems. And no quarter pounders within three days of taking your blood test. There's some world-class advice, Dave, right here on The Ramsey. That sounds like that came from experience.

Oh, yeah. This is The Ramsey personality, number one best-selling author of the book Paycheck to Purpose is my co-host today. Corey is in Dayton, Ohio. Hi, Corey. Welcome to the Ramsey Show. Hi. Thanks for taking my call, guys. Hi, Corey. Welcome to the Ramsey Show. Hi. Thanks for taking my call, guys.

Sure. What's up? Okay. So I'm a 31-year-old debt-free intern who only makes about $800 a month and living with my parents while I finish my associate's degree. I was wondering if I'm making the right track with this internship or if I should be focused on something that makes more money. Well, what is the internship?

What area is it in and what could it lead to? Oh, well, it's a software development internship and it leads to a job in software development. I haven't been offered any position, but the other people who have done this path have all been given the job afterwards for a software development position making about $72,000 a year. Okay. And how long are you into the internship and when will it be over? I'm about six months into the internship right now, and it's going to be over when I graduate in about a year. Okay. Are you doubting that you should stay with this? Is that why you called? And then why are you doubting it? I'm not necessarily doubting it. Well, I guess I am.

I'm doubting because of how low the money is. It's hard to make ends meet making only $800, and I'm wondering if I should be doing something else. Well, I think the first question I have is can you supplement that? So I understand why internships don't pay very well. That's just the nature of them, despite a lot of snowflakes thinking they should get full pay for internships. So I love your spirit, but that's the nature of the internship so the question is between the internship and then your schooling do you have any time to where you could be working 20 30 hours a week to supplement that uh not not a whole lot of time but i'm sure i can find some time um i could probably do uber or something are you are you already writing code? Yeah, I'm already gifted with code.

I know several languages. Why can't you not do some side gigs with code on contract? I've never really thought about that. I'm not sure how I would get into that. Ask anybody sitting around you at work. That's right. They're all doing it. But there's another question I have.

And I'm not asking you to or telling you to, but if you were to pause this internship today, That's right. They're all doing it. But there's another question I have. And I'm not asking you to or telling you to, but if you were to pause this internship today, okay, and you just went out into the marketplace, based on the code that you're already able to write and the experience you have, could you get something that's near the $72,000 that would also put you in a position for growth, or do you feel like this is the best way to get into this work?

I think without a little bit more experience, I, it would be very difficult to, um, definitely possible. I have a great resume, but with just some more working experience, I think it would be much,

much easier. What's a, what's a great resume. I don't understand. Um, I have good credentials. Um, on coding.

Uh, no, I just mean for a job. Oh, in general, like you show up and you bathe and stuff. Yeah, yeah, essentially. Okay, I got you. Okay. Yeah.

Well, I think you have to weigh what your other options are. So, for instance, what's the best way or what's the only way? And I don't think this internship is the only way, but it feels like you believe it's the best way. Is that true? Yes, that's true. Well, then we got to go supplement our income. Thankfully, mom and dad are spotting you and you've got a finish line that's in sight, but I would be getting after it, man, and making as much money as possible so that you're not struggling while you're getting qualified. I don't think that's the right choice. There's nothing wrong with doing

what you're doing. I would do two things along with what Ken's saying don't think that's the right choice. There's nothing wrong with doing what you're doing. I would do two things along with what Ken's saying. I think he's exactly right. Number one, I would investigate and get – do you have anyone in the coding world outside of work that knows the world that you can talk to? Professors of mine, I could. Okay. Number – maybe. That might give you an answer i'd like to i'd rather talk to a practitioner somebody who's actually my brother is a software

developer oh there we go all right let's call brother and ask him how some of the guys do freelance work how you put yourself out there for contract on freelance work and would you be considered maybe a dev one which is an entry- level software engineer okay okay and uh we've got uh i don't know 150 dev ones in the building here so i know i know them well yeah i know your project every dollar that's i wish i worked on something like that well maybe maybe someday we'll get you over here we always need help but uh anyway the the thing is if you can if you can qualify in your current skill set as a dev one, you're worth more than 70 grand today. Wow. Okay.

Or if you're not quite qualified, but you can write some basic entry-level code, maybe join a small team of freelancers that are doing stuff at night on the side, and you can help them by providing some of the grunt work as just a good side job. Okay, that's a minimum. We need to do that as a minimum. But what I want you to figure out is how marketable are you already? And if you discover I'm not, no one will hire me as a coder at this stage. I'm not good enough yet. Then you stick the intern thing out for sure okay but if you discover hey i'm already doing almost dev one work and i can get

a job making 70 with upside of 110 today without waiting another year and a half then you go do that if you've investigated that it's good and either way you're going to get peace because if you discover i'm not ready yet it answers your question i can be all in on the internship if you go i am ready today then there's no sense in making 800 bucks when i could make 80 or 90 grand that's right and so that's the thing it's about expanding your horizons uh i tell you what dave i want to give him my book from paycheck to purpose and having focus on stage three which is is get connected. Yeah. He's got to just dive deep. There are seven stages. You're already clear. You're qualified. I think you need to get connected to see what's left for you.

You know, if, if you were to contact or be in touch with people like our senior dev guys in the, in the, in the building, they could tell you in 30 minutes, if the level of code you're writing is marketable or shut up and stay an intern until you get this crap figured out, right? And that's all you want to know. That's all I want to know if I'm you. Tell me to shut up and put my nose down. I'll do it.

That's right. Or tell me you're done. Man, you can get out there and get moving. Let's get out there and get swinging now. That's it. And I have a formula for feedback, Dave, that if anybody this applies to you, I would get three to five of these conversations that Dave's been talking about. Three to five of them.

And professors are my last choice because they're not doing it. That's right. Three to five practitioners, okay? And that's what we want to do so we can get a wide variety of input and go, where are the averages? What are the consistencies? Don't just go to one person and get one person's opinion. It's not enough. Yeah. Dev ones are entering the market. It's above 70. So you're, if you're playing right around there, you should be fine. And, um,

you know, but you may not be yet and that's okay. You're then you need to stick with the internship and push it on through. But it sounds like that you've got your path. It's just a matter of whether you need to use this exact methodology to stay on that path that's right yeah he knows where he wants to go now it's just what's the best way to climb it anthony is in california hi anthony welcome to the ramsey show hello hey what's up hey how's it going Dave? Thanks for taking my call Sure, how can we help? Hey, so yeah My wife and I, we moved From Orange County about an hour Inland, it's like an hour and a half with traffic

And We bought a house And we're kind of in a point Where we want to move back Because, you know, the commute's just It's kind of killing me I don't really get to see my family too often. And then also the area we were in, we had family there or we have family there, but

it's just, we're realizing why we lived in Orange County in the first place. So- Did you realize that you couldn't afford it? Yeah. Yeah. Yeah, that's part of the reason why we bought an hour inland. Yeah, because you can't afford to buy in Orange County. What do you make? What's your household income?

So, I mean, base is $75,000. And, you know, usually I kind of make somewhere between, like, you know, $90 and a little bit more, depending on the year. Okay. And how old are you? I just turned 30. Okay. So if you sell your house and move back, you're going to be, you know,

you make good money, but you don't make good money for Orange County. You just make enough to survive. Pretty much, yeah. I mean, we do have, you know, family that would be supportive. My family, you know, we're not going to set up a life that's not sustainable, that our family has to support us. Yeah, you're right. That's not a life.

No, you need to have a plan that's sustainable where you have dignity. You stand on your own. I'm not saying you can't live in Orange County. I'm just saying that that's the tradeoffoff it's why you left in the first place so yeah definitely if you're if you're done move back but know that you know home ownership is probably going to be many years out if ever until you get your income up and get your career going and definitely sell the property that you're leaving behind we're not going to stay in the rental property business you're not going to stay in the rental property business. You're not going to have money.

This is The Ramsey personality, is my co-host today in the lobby of Ramsey Solutions on the debt-free stage. Christina is with us. Hi, Christina. How are you? Good. Thank you. How are you? Better than I deserve. Welcome. Where do you live? We actually live just south of here in Spring Hill, Tennessee. Oh, your neighbors. Okay. Wow. Big long drive for you. Yeah. Yeah. Well, good to have you. Welcome. How much debt did you pay off? So we paid off $170,000. Wow. And how long did that take? It took just shy of three years. Wow. Good for you. And your range of income during that time? Well, it actually is a little different from probably what you're used to hearing. We had one more family member, and so we started off with about 117,

and now it's one less family member, and I'm making around 55 to 75 because part is commission. Ah okay what do you do for a living? I am an insurance agent. Oh good for you. Yes a Dave Ramsey loving insurance agent. We're not mad at all insurance agents we just want you to buy the good kind. Yes. Good for you welcome okay so it sounds like there's a story here. Yeah. One less family member. What does all this mean? Yeah, so we started out a little while back, and I guess just during COVID, that one less family member started making some really funky decisions. And it was a little bit of a break of our family.

And unfortunately, that just gave us quite the hard time. And he went in one direction legally, and we kept on moving forward ourselves. Wow. Yeah. I'm sorry. Thank you. You've been through a lot of pain. Yeah.

And actually, it happened during my last semester about two years ago. I just got this really strong impression to go back to school. And so right in the midst of my last semester getting my bachelor's degree, this all happened. And then I just felt God saying, no, no, you can keep this. This is this is it. Just keep going. This is the plan. And you're going to be OK.

So I finished. I graduated in May. And a degree in what? Organizational leadership. Good for you. Yeah. And where'd you graduate from? Middle Tennessee State University.

Awesome. Yeah. They got a great program there. And debt free, too. Yeah. I bet you did. Yes. Yes.

And so you, unbeknownst to you, were getting prepared for this breakup. Yeah, had no clue. It was very, very sudden. No plans, no family arguments, nothing. A lot of silence. And the cool thing, I guess it's cool and not cool at the same time, is I didn't realize how much of our journey we were actually I was actually doing by myself with the kids and because I had a spouse that was like sure whatever whatever you

want okay fine yeah that that's good so I didn't have any pushback no fight but I realized afterwards that I was I was running it with my kids alone but But we did a good job. We did a great job. You were already carrying it, so when you had to carry it, you didn't notice as much. Actually, no, that's totally true. God was just directing, and it lightened the load a lot. Yeah.

And you've got a couple of kids. Yeah, times three. Wow. So two, four, six? Six kids. Wow. Yeah, times three. Wow. So, two, four, six? Six kids. Wow. Yeah, yeah. Always wanted a big family, and we made one, and I have no regrets.

And they've been amazing. They've been on this journey with us. We put up a kind of a thermometer up on the wall with really cool chalk and colors and all that. And we just started just filling it up as we were paying off debt. And they were supportive. And my teenage son was helping babysit while I went to deliver people's groceries. And some of them helped me to clean offices and just make everything we could to just pay off all the rest.

And it was amazing. They were literally on this with me. It was amazing. I mean, you have walked through hell and you're joyful and bubbly about it. It's amazing. They were literally on this with me. It was amazing. I mean, you have walked through hell, and you're joyful and bubbly about it. It's great. I mean, your attitude is amazing. Thank you. I'm quite honestly stunned.

And I guess the only question that's popping in my mind right now, I'm rarely speechless, but the only question that pops in my mind is, how much does the financial piece come into play in the world you're in right now? Well, I mean, had I not been, you know, listening to God this whole time, I would have with everything that occurred, I would have no degree. We'd have debt. I don't know what we would be doing, but instead I was prepared to be able to go right into a great job. One that I love, by the way, because I followed a lot of your principles, John. And very, very happy. And we don't have any debt, no car payment, nothing. And so I was able to be

able to maneuver us upward without going into debt because we needed money. We were like, oh my gosh, no more paycheck. So that was a big deal. Huge, huge deal. What kind of a ladder do you have financially now in this new role? I'm sorry, I don't really understand. How much opportunity for you to grow your income? Oh, I'm sorry, ladder, of course.

A ton, actually. Where I'm working, I work for a very, very supportive team that thinks very much like I do. And we're, it's amazing, but I'm really good at my job. And so they put me in what's called the aspirant program. So, you know, give it five, 10 years and I'll have my own agency. I'm not going to go into debt for it, obviously. You're going to be crushing it. Wow. Yeah. Yeah. It's going to be great. But it really all came down to, you know, when you said before, you know, kind of going through hell, I'll tell you, it really shows you kind of like money in a way, shows you what kind of person you are. You either sink or swim. You

either get negative or you get positive and you just and it's what you feel like doing. And we felt like surviving and having a nice, happy life and not going downward and not digging a hole, and so we did. Well, let me tell you, you have a spine of iron. Thank you. Ain't no stopping you. Yeah, you're a force of nature, girl. Thank you. I love it.

And you're taking the high road, obviously, by staying vague, and I'll respect that. Thank you very much. On all the crap and everything. But the good news is you just kept smiling and kept pushing and kept smiling and kept pushing, and God has rewarded that. So proud of you. Thank you. You have to feel accomplished.

You have to feel powerful. Yeah, it really kind of gave that um when you say spine of steel on john um it really did because when you get to that point you don't it's it's not a pride thing on the wrong side of pride but it's more like oh i can see now that i really am able to do this and um i was just uh telling somebody when i was when we're driving over here you know the kids are listening to you guys on the radio with other people's debt-free screams, getting them ready. And there's someone talking about credit cards. And I looked over at my son, Ben, and I was like, hey, you know, some people really do use credit cards.

And I just thought he would be like, oh, yeah, that's true, Mom. But he was like, oh, really? And I was like, yeah. And he goes, oh. I feel sorry for them. mom but he was like oh really and I was like yeah and he goes oh but I will tell you though we really didn't do it completely alone we've had a Ramsey financial coach uh Mr. David uh Gibbs over here um he has just stuck with us this entire way he's been with us almost three years that's good yeah what a wonderful story we're very very proud of you thank you okay what do you tell people the secret to getting out of debt is

oh um working really hard take every single side job you can just keep smiling about it tell yourself this is right and you're strong no matter what you've got going on. And that's the reason I wanted to do this today to single moms, to people who have lived through crap, people who think they've got too many kids, they can't do it, whatever it is. That's absolutely incorrect. And I've got three kids who are special needs, and we pushed everything, everything. So anybody who says they can't, that's absolutely false. Wow.

Well, you just proved it. Yeah, you just proved it. Thank you. Mic drop. Wow. We got a copy of Baby Steps Millionaires for you. Financial Peace University one-year membership and total money makeover. Read them, give them away, whatever you want to do.

Bring the six kiddos up on stage. Let's introduce them right quick before we run out of time. So what are their names and ages? So just going from top to bottom, this is Daniel, and he's 14. Benjamin is 12. Julie is 11. Joshua is 9. Rebecca is 7.

And Elizabeth is 5. Amazing. Christina and the team from Nashville, $170,000 paid off in three years. Count it down. Let's hear a debt-free scream. All right. Ready, guys? 3, 2, let's hear a debt-free scream all right ready guys three two one we're debt-free wow wow

now you're a young couple 25 years old making 160 000 a year and you can't figure out how to get out of debt, shut up. This is the Ramsey personality, is my co-host today. Open phones at 888-825-5225. Gary is with us in Chicago. Hey, Gary, welcome to the Ramsey Show. Hey, Dave, how are you? Better than I deserve. What's up? Thanks for taking my call. It's really a pleasure. My question is this. My wife and I, we're 50 years old. About 10 years ago, we figured out what we wanted our retirement to look like. And I should mention we found you about one year ago. So pre-Dave Ramsey, we developed a plan. And we wanted our retirement to look like a vacation property in Keough Island,

a vacation property in Park City, Utah, and somewhere else, a third primary home. And so what we did was we went out and bought a rental property in both of those two locations. Took out a mortgage on both of those two. While we still had a mortgage on our primary residence as well. For five years, as we bought those properties, we got them about five years ago. We've been short-term renting them. They cash flow positive. They've been great.

We have better than 50% equity in all three of our properties, our primary residence and the two rentals. But we realized that's not the Dave Ramsey way, but we've got a good income, a good net worth, the cashflow and positive. We're about 10 years away from retirement and it's like our dream. So I kind of want to know what you would do. It sounds like based on your personal experience, we've got some risk. Well, I think everyone would agree that debt equals risk and more debt equals more risk. Agreed? Very much, yeah. We have no other consumer debt.

That means you have less risk than other people who have a lot of debt, but you have some risk. So, I can't tell what it is. So how much mortgage debt do you have? So, to keep the numbers real simple, we owe $500,000 on each of the three properties. Our primary residence. So you have a million and a half in mortgage debt.

Correct. Better than 50% equity in each of those properties. I heard all that. I got all that. Yeah, okay. And your net worth is what? One point, I'm sorry, 3.3 net worth. So what's the other one and a half in?

Or 180? So it's 401ks and brokerage accounts. Okay. And how old are you guys? We're 50, and our household income is $400,000. Okay. I'm not panicking about this. The only thing I would adjust is, you know, here's the thing, okay?

It's not a Dave Ramsey thing. It's just when you scour the people who have a net worth of $1 to $15 million, we find in the data, and we did one of the largest studies of millionaires ever done a few years ago, we find in the data and we did one of the largest studies of millionaires ever done a few years ago we find in the data some commonalities meaning that they're causal okay these things caused people to have this net worth uh one is they did what you did they built a really nice retirement plan nice 401k they usually a million, million and a half like you've got in your 401ks, your brokerage accounts, your retirement accounts, okay? Two is they have paid for real estate, their home. So as an example, a scaled down version of where

you are, what we found in the millionaire study a lot was a guy or gal, a couple with a $600,000 paid for house and a million dollars in a 401k. So I got a million dollar net worth or 1.5, 1.6 net worth, and they have zero debt. And we find them at 52 years old, a lot like that. Like we found thousands of those that were millionaires. It sounded just exactly like that. So what we've figured out is is that paid for real estate going into retirement having zero debt real estate or anything going into retirement is a stabilizing factor and it makes your retirement a lot less stressful so you said you're 50 we're 50 yeah and so if i woke up in your shoes, would I panic and go,

oh, Dave Ramsey says I've got to get out of debt? No, this is all real estate debt, okay? But you make $400 freaking thousand dollars a year. So how fast do we pay off with all these rents coming in too? How fast do we pay off this million and a half? I'm definitely going to do it in a decade. Yeah, so they met you and online, what we've been doing, we've created a little debt-free chart,

and what we've decided to do is we've taken the rental property with the highest interest rate on it, and we're going very intentional with that one. So all extra income, whether it's household or whether it's rental, is going to court against that one, and then we're going to pay off the other rental. And then what we plan on doing as we retire is whatever equity is in our primary home, we're going to downsize into something that size And then what we plan on doing as we retire is whatever equity is in our primary home,

we're going to downsize into something that size so we have no primary mortgage on our primary home. Well, or here's the other thing. Your $1.8 million will be $3.2 in seven years if it's in good mutual funds. Yep, which it is. And so you reach in there and touch it when you hit 60 and just pay it off and keep it if you like the primary. You don't necessarily have to downsize the primary how quickly can you pay off a million dollars of the million and a half well i've got the one house planned at four years it's a half million on that one so i would think two we could do in eight years probably quicker because we'll get one

paid off exactly yeah yeah yeah i'd like to see you do the whole thing in about eight i think we can i think we can. I think we can. Yeah, so if you get to 59 and a half, you got anything left, just take a little out of your retirement account and pay it off. If you like all three properties still and you still like your plan, the only thing I did was disturb you about the debt, setting you up on a decade or less to be clear of the debt. If I'm in your shoes, I think that's fine.

And let me tell you what will end up happening you're going to get obsessed with this you're going to end up doing it quicker i've already i've already got a side hustle with my income i'm going he's doing driving uber making 400 guys what is your side hustle do you mind us asking uh yeah it's logistics so there's companies around chicago that will help you deliver you deliver, it's logistics. So there's companies around Chicago that will help you deliver things. It's like doing DoorDash, but just not DoorDash. That's hilarious. $400,000

and he's got himself a sign-off. My wife thinks I'm nuts. She absolutely thinks I'm nuts. Well, you kind of are. What do you do for a living? We're both in sales management. I hear you talk about the virtues of sales careers. We've been living in sales our whole life and couldn't change it for a living? We're both in sales management. So I hear you talk about the virtues of sales careers. We've been living in sales our whole life and couldn't change it for a thing.

It's great. Well, that's the other thing. Here's what happens, okay? Now you have a new goal that's got you fired up. Your sales are going to go up. Yeah, but the level we are in sales now, we're out of the commission world. We're in the salary and bonus because we're in management now. So it's salary and bonus.

So going up helps a little bit bit but not as much as it would if you're commissioned you know i'm saying yeah you know you could do a side hustle with sales training for non-competing companies you make a whole lot more in doordash thanks exactly just what do i know but yeah anyway you're doing great man i'm so proud of you it's so cool i appreciate you getting fired up on our stuff and all it's going to do is just increase your peace level as those debts start dropping off and even putting them in the crosshairs and knowing when they're going to drop off the piece comes just from doing that even though you hadn't gotten there yet just knowing you're going to be able to pull the trigger and knock them out that's the thing so yeah that that's

beautiful yeah you'll probably end up doing the whole thing in about six years that's going to be my production my prediction and uh just just this guy, his mind is already moving. So that's what, I mean, we see people do it all the time. Very seldom do you hit your goals on this stuff. You almost always hit them early. That's right. Well, and when you're focused, right, whether it's losing weight or relationship growth, when you're focused towards a goal, then what happens is things begin to move in your favor

that you didn't see. And we hear that all the time, and it's just a function of intentionality and hyper-focus activity, and just things fall your way. And I actually would say, you know what, you're getting bonus probably on team performance. Instead of the DoorDash, I'd be working with these individual team members that you and your wife manage and lead. Help them grow. Help them hit new goals. Boy, is that going to be fun,

and it's probably going to fatten those bonuses, I would guess, if I was leading a sales team, you know? Yeah, I think there's a lot of stuff you can do. It's fun. It's fun. I mean, but your overall plan is not out of control, but keeping those debts forever would not be my recommendation. So let's just develop a plan for getting rid of

them in some reasonable period of time and uh and or when you hit 59 and a half cash them out cash out because you're going to be sitting on in excess of three million dollars probably in excess of four million dollars in those retirement accounts at that point not counting your real estate and the real estate will have continued to go up too so you're going to you know you're going to retire at 65 with a seven7 million debt worth, give or take. Wow. That's a trek you're on. Especially if you continue to make a freaking $400,000.

That does help the equation a little bit. But up through some number of those years. So it's going to put you in a great, great place. Well, Dave, I can't be a baby steps millionaire. I don't make a baby steps millionaire. I don't make 400 grand. 33% of the people that we found that became millionaires in North America, starting from nothing with no inheritance, did so with an income less than $100,000.

The third most likely category of career to become a millionaire in the study was teachers. Number one was engineer. Number two was accountant, number three was teacher. So there you go. Those are facts. They're not wishes, and they're not a political statement. So if you don't agree with them, you're what's known as wrong. This is The Ramsey Show. Dave here. You can find all of our shows with the Ramsey Network app on your smartphone.

It's the only place to listen to the entire back catalog of episodes. Download the Ramsey Network app in your favorite app store today.