The Ramsey Show - App - How Do I Prepare for Moving Overseas? (Hour 2)

Episode Date: April 13, 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. I'm Dave Ramsey, your host, Ken Coleman, Ramsey personality, host of the Ken Coleman Show, where they talk about careers and jobs and finding your purpose. He's my co-host today. So you can ask questions about life, money, careers.

We're here to help you. Open phones at 888-825-5225. That's 888-825-5225. Alex is going to start off the hour in San Diego. Hi, Alex. Welcome to the Ramsey Show. Hey there, guys. Thanks for having me on.

Sure. What's up? So I actually talked to you and Karen a little under a year ago. I think it was in July of last year. And me and my wife, we were considering buying a house, but considering moving soon. And what I didn't really mention at that time is that we plan to move for the purpose of serving in the ministry overseas in Europe. We're in our mid-20s, and we thought this was a ways off at the time because we wanted to have around $200,000 in the

bank before leaving just to the safety net because we didn't know how it worked financially. But my business has really taken off in the past year or so, and we've been able to save up a lot more. So we really want to use this as a blessing to get that ministry started sooner. We'll be providing for ourselves. The church will not be helping us, which we're okay with, but we will be taking a pretty big pay cut. So that should allow us to take care of our expenses and retirement, but not much else. My question is just kind of a rocking chair, Uncle Dave type of question. You know, can you give me any financial advice I should be thinking about and just kind of talk me through, you know, having mental peace with taking a pay cut, providing for myself and my wife, because it just kind of freaks me out cutting our salary,

kind of in, or I guess our income, you know, by more than two thirds. Yeah. Do you own a business? Yeah, I do. What are are you gonna do with it i'm gonna keep it going i have some employees um that i've been training and they're gonna help me take over a good portion of my workload so i'll be working maybe 10 to 20 hours a week instead of you know 40 to 50 why would you pay yourself less than just remotely right yeah it's going to be remotely. Are you expecting the income from the business to go down? No, I don't think so.

But, you know, I'm hoping by the time that we leave, the people that I have working for me kind of part-time, they're ready to step into a full-time. Oh, so your expenses are going to go up. Your net profit is going to go down. Exactly, yeah. That's what, okay. Now I understand. All right. Because you're hiring people to do what you used to do. up your net profit is going to go down exactly that's what okay now i understand all right because you're hiring people to do what you might come down a little bit i don't know but

you know i i don't know how long do you think you're going to be in the on the mission field uh we're looking at a minimum of two to three years but we'll reassess it with you know at that point okay well that gives me a lot of peace you ask about peace um i mean obviously if god's hand is on this and god called you to this that gives you a level of peace um but it doesn't mean that missionaries don't fade that are called don't face uh financial struggles most of them do as a matter of fact uh it's a hard it's a hard life you're signing up for. It's a tough thing. And yet it's one of the most rewarding things probably you can do on the planet if you're called to it. And you obviously are. I'm not questioning that.

But from less of a spiritual lens but more of an emotional or psychological lens, if you can see the end of something, you can walk through anything with peace. If you can say it's going to be over here it's the perpetual thing that drives people nuts the ambivalence and so even if it's pain you can say okay this pain is you know doc says i'm about i'm you know this is gone i'm gonna uh start this procedure and it's gonna really hurt for 30 seconds but obviously five years from now you're going to be well because of this 30 seconds of pain you can endure the 30 seconds of pain but if he just starts cutting on you you don't know how long it's going to be i mean that pain will eat you alive psychologically so if you can see the end of it and so i would set a time i would say we're going to commit to two years three years whatever the mark is and at that time we're

committing to moving back home and ending this mission now we will stay keep ourselves open to the fact that god asks us to stay and we feel called to stay and so on but for right now our our level of commitment is a three-year commitment at At the end of that, we're coming back home. See, if you set that, that gives you a sense of destiny, a sense, an end to this, a light at the end of the tunnel that's not an oncoming train, financially or mathematically. And then you can scrape and claw and scratch and sacrifice for that period of time. But eventually, you've got to come up for air. You can't hold your breath but for so long.

So it's the ambivalence that drives people nuts, the lack of clarity. Alex, I thought I heard you say that the company made more money so you're moving the timeline up to go to the mission field. Is that correct? Yeah. Yeah, we have a good, we have a really good safety net of just kind of our fixed amount in the bank. And I understand that, but let me ask you this.

You see money coming in month over month, and that kind of freaks you out to not see I totally understand. But here's my question for you. Do you feel God's pressed a call to move the timeline up, or are you just reacting to this timeline based on, well, we said we were going to move on and move when we hit this goal financially. I'm just wondering what's driving the increased timeline, because we hit the number we planned, or do you feel a press to go?

And I've got a follow-up question, so is it yes or no on that? Yeah, I mean, I felt a big pressure and weight of helping in this ministry for a long time. But honestly, the goal that we set financially were not necessary. It just kind of felt like a secular safety net. But even that made me feel bad. And now being way beyond that, I just feel even more of a burden on it because it feels like I have to go do this. All right, so I think you've got to listen to that.

And I think you've got to honor that. And I think what Dave said is right. But the only thing I would tell you is that I would not assume that just because you're taking on the increased cost of employees, because that's real, that the company wouldn't grow. And I would do everything I could to see if we can keep those revenues going and really dive in, and then I think God's going to bless you regardless. But I just wouldn't assume that all of a sudden the company won't grow. I'd try to train those folks and stay in tune in those 10 hours, whatever you're doing, and try to lead them and see if God doesn't bless that and grow that business.

You might schedule, you know, maybe a little bit extra. You got to schedule an occasional two-week move back here to sit around and do things for two weeks in the company and then go back and give it a little booster shot. Great point. Missionaries do that all the time. Come back. They come back to raise funds. You're going to come back to run the business that's supporting you.

Since you're self-funding. You know, that you're self-funding. That's a great point. You don't have to stay there the entire time and work remotely 10 hours a week. And so you can run back and forth a little bit. It's not that hard. But, yeah, I think if you see things less permanent and more flexible, it keeps you from losing your peace, to answer your question. And so I would add the flexibility of some returns, and I would put a deadline on it that, you know, that unless, you know, my wife and I both hear from God, then we're coming home after three years.

And so, or whatever. And you can pray and determine that deadline in prayer. I don't care. But I think leaving the door open, we're going to just stay until dot, dot, dot. That'll drive you bananas. Unless you're planning to be a full-time missionary the rest of your life, which you did not tell me that. You told me otherwise. Which means he could also, they could both come back, keep that business viable and growing, and continue to go back over time, take their kids back.

It becomes a generational thing. It's a both-and. It doesn't have to always be all-in. It doesn't have to be a one-year mission trip, and then you're done forever. And it doesn't have to be a you're on the field forever and you never come back to the States. So we just have better transportation and technology these days. So it's a cool thing you're doing, brother. Thanks for letting us participate.

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To get started with a free trial, text TRIAL to 33789. That's TRIAL to 33789. Ryan is with us in Starkville, Mississippi. Hi, Ryan. How are you? Good. How are you, Dave? Better than I deserve.

What's up? So me and my fiancee are both 22 years old, graduating college, both from Mississippi State at the end of the month. Wonderful. What are your degrees in? I'm in construction management, and she is elementary ed. Excellent. When are you getting married? November or September 10th. Good for you. I'm glad you got it straight.

Yeah. All right. September 10th. Big you glad you got i'm glad you got it straight yeah all right september 10th big day man congratulations i appreciate it my question is so neither of us will have debt uh my parents helped me pay my way through college uh and she had a full-ride scholarship through an excellent teaching program, so she just has to teach in Mississippi for five years after graduation. We'll have just under $100,000 of joint income once we're married, and we'll both be living with family, so very low expenses until then, so plan on saving as much as we can until we're married. Our question is, do we need to look at renting as our first housing option, or should we look at buying since we're both debt free and have that leg up on some? Well, you financially meet the guidelines that we give

you for buying. We tell you to be debt free, have an emergency fund of three to six months of expenses before you buy, and then buy a 15-year mortgage with a payment no more than a fourth of your take-home pay on a fixed-rate 15-year mortgage. That's the guidelines that we use. Now, I will tell you as a dad of 20-somethings and 30-somethings and as having coached folks for 30 years, I personally think you will make a much better housing decision if you wait one year and so i would be i would be looking for homes uh this time next year into the summer with the idea of closing in september one year on your one year anniversary give or take it takes about a

year of living together as a married couple to know how close to your mother-in-law to buy you have to get you have to get to know each other to make a better decision right now there's a lot of wonderful milestones happening in your life you you know you would not be human if you didn't have stars in your eyes uh you know you're getting married you're graduating you both got good careers you're debt free man what a wonderful start you've got yes everything's great here it's not going to kill you if you buy a house but i think you'll buy a different house one year from marriage than you would have today and if you start your real estate career at 23 24 years old instead of 22

years old that is not the end of the world you are still going to be wealthy you're still going to be fine you haven't thrown the money away you've just concentrated on your marriage spend the first year concentrating on your marriage a hundred percent don't there's an old thing in the old testament in the bible that they would not allow a soldier to go to war in the first year of marriage. And the first year of marriage, they had to stay home and get the home solid before they went off to war. Of course, they were often gone for years at a time when they went off to war, so it's a little different, but it's a principle coming out of 2 Kings.

Ryan, here's a little secret that when you become a homeowner, you start owning problems that happen with that home. And I think that Dave has nailed this. I think that in addition to what he said is to have a year of just renting a nice apartment. You guys can afford it and enjoy just living together and learning what kind of a home do we want. And Dave has said so beautifully there that that is going to become more clear a year later.

But, you know, you don't need the additional stress that comes with marriage, dealing with being a homeowner. New jobs, new marriage. We're sharing silverware and mustard. Yeah. Come home. Hang out at the pool at the apartment complex. Be young and married with no kids and chill. And just not have to think about, you know, the gutters.

The gutter doesn't work. I agree with that. The heat and air is not working. That's what nobody tells you. You've got to put up curtain rods, which that, by the way, is the third largest cause of divorce. Yes, it's true. That's true. Because here's why.

In Stacy's house, her dad did it. This is a true story. My wife, we've been married almost 23 years. In my house... And he knew how to run a screwdriver. He knew how to do it well. Something that... Something I don't know how to do.

Something Mr. Coleman might not know how to do. No talent in that area. But you do, you learn those things. What time do we eat dinner? I used to eat dinner at this time in my house. Who does what? My dad used to fill the dishwasher. Who knows?

You got all these cultures. You roll the toothpaste or squeeze it. I mean, there's a lot of major philosophical things that have to be solved. Are you and Sharon in alignment on how to handle the tube of toothpaste? This is what people want to know. Yeah. You are? Yeah, we each have our own separate ends of that massive master bedroom bathroom.

That's the right answer. That's where we had to go. And that way she doesn't get in my way. Yeah, right. Right. Yeah, you know that's how it went down. Yeah, I didn't want to agree with that. No, you better not. No. You, me, Stacy's how it went down. Yeah, I didn't want to agree with that. No, you better not.

No. You, me, Stacy will all be in trouble. So, yeah, you're that. But, I mean, there is nothing wrong with. And, Ryan, you're going to get tremendous pressure from all these financial geniuses that aren't. You know, you're just throwing your money away. You need to go buy, buy, buy, buy, buy, buy. And it's okay. I'm not suggesting you go just throwing your money away. You need to go buy, buy, buy, buy, buy, buy. And it's okay.

I'm not suggesting you go a decade without home ownership. I'm talking about 12 freaking months. And let this thing have a little breathe, a little rhythm to it. And that's just an opinion, and it's probably worth what you paid for it, but I feel pretty strongly about that. I tell young couples that are getting married, wait at least a year to buy a home. You've got enough other things you've got wait at least a year to buy a home. You've got enough other things you've got to adjust in your life to get square on.

Good stuff. Good question. Sarah is with us. Sarah's in Dayton, Ohio. Hi, Sarah. How are you? Doing well. My question is I want to know if I'm taking out enough money, investing enough,

so that when I retire I can have money to blow. Okay. How much are you investing? Okay. So my husband takes out, it's about $625 a month into deferred comp, and I take $300 out of a month of our paychecks into our deferred comp. How old are you? I'm 37. He's 36. He has about $120,000 in his, and I only have about $15,000 in mine.

And every year, we plan on adding an extra $25 to it. Well, it just depends on how much you plan to blow. But you should have millions of dollars with what you're outlining. Okay, just because I want to be able to, you know, just up and leave and go wherever I want or, you know, take a friend with us to Hawaii. That depends on wherever you want. I mean, are you up and leaving and jumping on your own 747 jet?

Context matters. That costs $100 million, and you're going to live on the beach and buy some of the most expensive real estate in the world? No, you're not going to have that much money. But you're going to have millions. You're going to have millions. Yeah. If you want to go to Cancun and stay in an all-inclusive with a couple of friends,

you'll be able to afford it. Oh, okay. Now that I can handle it, if we just keep adding $25 extra every year to it. Yeah, but here's the thing. Here's the thing. You need to probably reset some of this stuff, and I'll send you a copy of the total money makeover. You need to be doing deferred comp is the last one you would do.

The first one you would do is anything like a 401k with a match and anything that's Roth is second, and traditional investments in 401ks and IRAs are third. Deferred comp would be fourth. And you probably have other options available that will serve you better in these goals. And, of course, we're going to get you out of debt before you do any of that. So hang on. I'll send you a copy of the book, The Total Money Makeover,

which will walk you through exactly what to do and exactly when to do it. Hold on. Ken Coleman, Ramsey personality, is my co-host today. Ken, our favorite thing to do on the show is a debt-free scream. Our next favorite thing that's a little bit better is to do a debt-free scream live in the lobby. But the best of all debt-free screams are our own Ramsey team members doing their debt-free screams on the debt-free stage right here in the lobby with half the freaking company not working, standing out here watching. That's awesome. The only time you're happy when they're not working.

Well, that's true. We need to celebrate. We need to celebrate. That's right. But then we're going to get everybody back to work. So there you go. So Jim Nally is with us. He's been with us about four years and is a director of paid media.

Digital marketing team is here with his wife. And your wife's name? It's Amanda. Amanda. Well, welcome, guys. Congratulations. You did it. You did it.

How much did you pay off and how long did it take? We paid off $217,000 over five years. Five years. That's amazing. And you've been here four years. Yes. So you've been in the middle of serious positive peer pressure for a long period of time as a part of this. I mean, what better environment to make you do this stuff?

And so I'm so proud of you guys. That's a long slog tell us a story what happened five years ago that started the process and in the middle of or in early in the process you end up here yeah yeah so we um originally took fpu right at eight years ago and it was in the middle of a season of just hard hard times we had uh just had a baby who's born 10 weeks early we're barely making any money and we had started floating some bills between some credit cards and had a massive amount of student loan debt so of the 217 about 150 or 160 was student loan debt what was the rest of it about 40 was medical and then kind of a smattering of small consumer things on top of that so a

mountain of debt yeah no income to amount to anything. Baby comes early. It's like the perfect storm. Yeah. And then you go to FPU, which says, it's going to be okay. Yeah. And we believed it. And we started to work it, but in very like baby, baby steps.

Not even actually working the baby steps yet. Crawling. Yep. Yep. So very kind of Dave-ish. We were still floating between the credit cards, but we were trying to stick to a budget. And then when it wouldn't work, we'd get frustrated and we'd jump way back to that spot of not wanting to open the bank account again, being terrified of what was lurking kind of anytime

we'd pull that screen up. And a few years later, well, why don't you tell that part of it? Yeah. So about five years ago is when we really kicked into gear. It was about Christmas time. And I remember we were trying to get presents together. And we had two small kids at that point. And we were scraping the other pennies for a loaf of bread to eat dinner.

I mean, it was that bad. And I remember walking through the grocery store. And there were these carolers singing through the grocery store and I'm just crying why are you so happy and I was just like I went home and I'm like we can't do this anymore we cannot do this anymore

I was sick and tired of being sick and tired and so we started working it we busted out our copy of Total Money Makeover pulled out every dollar started just getting back on it again. Basically reset on our snowball because it had been in a couple spreadsheets. And then we're like, nope, let's fresh start from today. Let's get it figured out.

And then it's just been hustling ever since. Yeah. And how'd you end up here? Yeah. So we have been in the Nashville area about 10 years i used to work down the street from the old office and uh walt yates one of our uh vps now reached out to me and said hey you want to come chat have coffee and then uh and kind of a miracle of hiring here 10 days later had an offer and was starting starting my new role and since then the team

has grown from just me to a team of 10 and we're looking for a lot more digital marketers out here too absolutely it's been a been a wild ride for the last four years yeah that is a miracle of you standing out here that got hired how many of you took longer than 10 days raise your hand everybody all of them that never happens it's harder to get on with the FBI than it is us. But, yeah, we're pretty choosy because we don't want crazy in the building. So way to go, man. So cool. And you've obviously your career here.

I followed you. I know who you are and what you're doing. And you've done a great job here and have continued to advance in this place. And we're not going to ask your incomes during this time because your coworkers are standing around. That's not what'd like to do. But you guys have done an incredible, incredible job. Five years. Wow.

Yeah. How's it feel? It honestly hasn't even quite hit us yet. No. It's this, like, I'll have moments of just being busy and then things get quiet for a moment. And then I'm like, whoa everything's changed there's this just kind of sense of awe and a real sense of like god was reminding me this week i've brought you this far wait until you see what i did yeah just wait that's good yeah the next chapter is gonna be awesome yeah this is so cool yeah amanda that was uh you need to write that story of the grocery store out to be able to hand it to your daughter three weeks after she gets married.

So she can know how her family tree was changed. Because that was Sharon. Sharon used to say, people say, you know, how much money do you want? She said, I just want to be able to go to the grocery store and buy a full buggy. That's all I want. And truthfully, that has satisfied her for a very long time. You know, she really didn't change that. I mean, we bought lots of other things, but, you know, that was kind of like a measure that we weren't desperate and freaked out anymore.

If we could just go to the grocery store and buy a whole buggy of groceries. I mean, babies running around and all that. So such a great, great job, you guys. Very, very well done. Who were your biggest cheerleaders? Our parents. My parents are here today with us. Yay! That's awesome. Cheering us along the way. Jim's

parents, too. They just weren't able to make the trip. But also our church family. You know, we had a small group of people that knew. What church are you in? We've been going to well it's complicated okay just move on that's all right i thought there's several great churches in the area there's a lot of great churches just leave it alone we're good yeah okay so your cheerleaders were your mom and dad of course you had a couple cheerleaders on the team, I'm sure.

Folks on the team knew what you were doing. Yes, absolutely. We all talk about this stuff all the time. We really actually do the things we teach around here. It's pretty amazing. Pretty crazy. Our whole theme for the internal team this year is to walk the talk. We've got T-shirts everywhere teaching Financial Peace University, the team again this year,

and just getting everybody involved and everybody winning. It would be a shame to work here and not do this stuff, you know. So proud of you guys. I've got to ask you, when you do something for a year, two years, that's intense commitment. Five years is next level. And I heard you say, you know, I'm still recalling that, hey, we're actually debt-free. I want you to talk to people who feel like they're in the middle of that run. They're in that. They that run. They're in that.

They're going, we feel like we're halfway through, and it's really, really hard. And it feels like even though we know we've made progress, it doesn't feel and seem like we're ever going to get there. What do you say to those folks? Yeah. The biggest thing, even as we're just reflecting the last few days, when you hit a wall, when you have a month where you don't quite hit a wall, when you have a month where you don't quite hit your budget,

when you have something that comes up unexpectedly, sets you back, when you're on a journey that long, the biggest thing is just to keep making progress. Like, look at progress, not perfection. I can't tell you how many times we hit the- That's a great phrase. Yeah, it is.

I can't tell you how many times we hit the, like, oh, we missed it this month, and then our first instinct is to shut down and not want to look at it again, not want to pick it back up. But being able to just pick it back up time after time. And sometimes there's longer gaps on those times and sometimes it's shorter. The other thing I'd say is don't put off, especially if it's going to be this long. Don't put off the things to take care of your mental and spiritual and relational health. We've both been to see some counselors and that sort of thing along the way,

and it was critical to take care of our souls and our family while we're taking care of our finances. That's very wise. And you brought the kiddos to do the debt-free screen with you, their names and ages? We have Sarah. She is about to turn nine. She's our little preemie. All right. Here healthy today. And this is judah he's six all right very cool and i'm sure they've been practicing their debt-free school yes all right it's sarah and judah amanda and jim he's a director of paid

media here digital marketing team looking for some more team members just like him and a pretty incredible story jim we're so proud of you guys. $217,000 paid off in five years. Count it down. Let's hear a debt-free scream. Three, two, one. We're debt-free! We're debt-free! Yeah!

This is how it's done, ladies and gentlemen. How fun is that? Man, they cleared up a bunch of deaths. That was a lot. This is the Ramsey Show. We'll be right back. ken coleman ramsey personality is my co-host you jump in we'll talk about your life and your money it's a free call at 888-825-5225 calvin's in los ang Hi, Calvin. Welcome to the Ramsey Show. Hi, Dave. Huge respect for what you guys do. I've got a quick question. I'm 22 years old, recently graduated from college, and I'm just starting my career. I currently live at home,

but I've been saving everything I make, and I have a good amount saved up right now. And I want to purchase a house, but living in Los Angeles, housing prices are just astronomical, and I just don't see myself being able to afford one anytime soon. So I was wondering if you have any advice on if I should just get out of L.A. or any way I could possibly become a homeowner anytime within the next few years. Well, obviously you've analyzed the situation correctly. It's an expensive market, and in order to buy a home there, you're going to have to have a pretty substantial income. What do you do?

I'm a manager currently at a warehouse. I make about $70,000 a year. Your phone's cutting in and out. You make about what a year? I make about $70,000 a year. As a manager at a warehouse? Yeah. Okay. What's the career path? You mentioned possibly moving for your career. What's it look like moving up the ladder 10, 15,

20 years down the line? Well, the company I'm working at is expanding pretty rapidly, so there is definitely a good opportunity where I'm at. I'm enjoying the work. I could see myself, and I do believe in the next few years my income will increase. And they have a lot of opportunities out of state, so I'd be open to moving. I'm just a little nervous about living in L.A. my whole life and going somewhere new. Yeah, well, that would be human. Most people would be nervous about doing something new. It's also an adventure. It can be exciting and scary simultaneously um and um here's the thing you don't you do not have to look at a move as a permanent equation you're 22 23 years old so you could take a job making

70 000 with the exact same company in another city where real estate prices are half what they are there and start your life. There's nothing to say that five years later you don't take a job in L.A. and move back. You know, there's nothing to say you don't end up in whatever city, you know, after that. But there's, I would challenge you to say, you know, some people when they're 22 and they graduate from college, they go backpacking in Europe for a year for an adventure and don't do anything except see Europe, which is kind of cool, a little hippie-ish, but kind of cool.

But instead, you could just say my adventure is going to be another city for four years. Yep. I love that. I'm going to pile on to what Dave's saying. This is a great idea. I would take the top three cities. You said there were some opportunities for you to make money. What are those potential promotions? What

cities do those exist in? And then let's say there's three cities, four cities, five cities. You're a single guy. You've got some vacation time. Go visit. I'd go visit the cities. Yeah, that's good. It's not so scary when we actually go see it and hang out a little bit. And to Dave's point, now we go, wait, I can move this city,

move up. I'm making more money. What area of town do the 22-year-old, 23-year-olds live in? Which is really the cool end of town typically, right? But, I mean, there's some really neat cities in America. And you can enjoy some. You can enjoy three or four weeks of good travel or three or four weekends, long weekends of good travel or something and see some of these areas and then see what your company can open up for you.

You're not in a hurry, but you're not nailed down. You're more free and mobile today than probably you ever will be again in your life. That makes a lot of sense. I'll tell you this, too, Calvin. You may not believe how free it is in some other cities. Guys in Los Angeles, they've truly been on lockdown. Yeah. I mean, can't even walk outside for a while yeah it's gonna um yeah yeah yeah covid stuff aside but i yeah but

but yeah i'm just gonna see this time as an adventure i love i don't think your only path is try to make uh 150 000 so that you can afford a home in L.A. You know, it's going to be hard to do a home in L.A., you know, with a typical income, considering the real estate prices are not typical. And so, I mean, you're sitting about that household average in America. The good news is you're only 22, so you don't know where to go from here but up usually. So good stuff there. But I just thought I'd have some fun with this. Lee is in Chattanooga hi lee how are you

i'm good how are you better than i deserve what's up um my husband and i we are debt free and we are currently maxing out both of our raws and we have a um my husband has a simple um ira at work that he contributes to the match on it. And so I was just wondering what are our other options as far as investing for retirement and just regular investing in general? Okay, very good. So I would max out anything that he's got at work. If he's got a simple and he's only doing the match,

then I would go ahead and take it all out to the max that's the first thing because it's a uh a simple ira is a 401k at a small company yeah that's what it amounts to and they have a mandatory three percent match and so that that's what he's experiencing they probably offer that in a roth and i'd be doing it in a roth as well so if you can do a simple with a match, fully funded as a Roth, and do your two Roths, that's the first step, or something that sounds something like that. And you're not working outside the homely? No, I'm not. Okay.

All right. Do either one of you have any self-employed income? No. Okay. All right. Then you're left with just open market investing. Now, what is your household income? About 85. Okay. Well, we recommend putting 15% of your household income, which in your case, a couple of Roths would do it. Yeah, we're pretty much there now, but we've still got some extra that comes in. Well, I know, but is your home paid off?

It is, yes. Oh, okay. We did that in January. That's wonderful. Okay, then you're just left with investing. Okay. And, you know, at this point, what I would suggest you do is just open a probably something that's called a low turnover mutual fund. If you're working with a SmartVestor Pro, they can help you with that. Another way to access a low turnover mutual fund is just an S&P 500 index fund.

Now, I'll explain to you what that means, okay? If you buy a stock, a single stock, let's just say you bought, I'll make up a number, a $50 stock, and I'll call it Home Depot. I don't even know what Home Depot sells for, but let's just call it. You bought the stock for $50. If it goes up in value from $50 to $70, you do not pay taxes on the $20 increase until you sell it. Right?

Okay. It's a capital gain if you hold it more than a year. So it's taxed at less than regular income. And you don't pay taxes on it until you sell it. That's called realized but not recognized. You've realized the gain, but you've not had to recognize it for tax purposes. And so if you buy a low turnover mutual fund, the mutual fund has a bunch of stocks in it, and they almost never sell them.

If they have a 5% turnover ratio, 95% of them did not sell, and all of the growth on the 95 percent that did not sell is just like that 50 to 70 there's no tax due on it until you sell it so the beauty of it is is it's tax deferred capital gains growth in mutual funds but it's not in a retirement plan so it's it's a good it's a very tax efficientefficient way to grow your money. I personally do that a lot. I dump a ton into index funds, and then when I get a chunk in there, I buy a piece of real estate that I pay cash for, and then I start again.

Then I build it up again because I like real estate. But if you just wanted to just – Yeah, that was maybe an option in the future once we get a chunk of money. Yeah, if you had enough to pay cash for a little rental house there in Chattanooga, that'd be awesome, right? And get your real estate portfolio started. And that going along with your Roths and his Simple, you're going to be in really, really good shape.

And you don't have to do anything fancy. Again, a SmartVestor Pro, click SmartVestor at DaveRamsey.com. Any of you that are willing to do your investing, they can show you how to do this stuff and teach you so you understand what you're doing. Never do something you don't understand. But that's how that works, and it's the most tax-efficient way and a beautiful, beautiful way to do your surplus investing portion. Ken Goodhour. Yeah, always fun.

Good calls. Ken Coleman, Ramsey personality. My co-host today, James Childs is our producer. Kelly Daniels, our associate producer and phone screener. I am Dave Ramsey, your host, and we'll be back. Did you know you can listen to The Ramsey Show on your smart speaker? Just tell Alexa, Google Assistant, or Siri to play The Ramsey Show podcast. Check out all Ramsey Network shows on your smart speaker today. The Ramsey Show.