The Ramsey Show - App - How Pensions Impact Assets and Net Worth (Hour 1)

Episode Date: June 25, 2019

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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 am Dave Ramsey, your host. Thank you for joining us. Open phones at 888-825-5225. That's 888-825-5225. Kathy starts off this hour in Decatur, Illinois. Hi, Kathy, how are you? Hi, Dave. It's a pleasure speaking with you.

You too. What's up? Well, I have a question. I have read Chris Hogan's book, Retire Inspired. My husband and I each have a pension, and I was wondering how do pensions impact millionaire status? Well, if you could figure out if they give you a cash value of the pension, a lump sum, you could use that as an asset of yours in your millionaire net worth. When you pass away, obviously, the pension is worth zero. And so it is not an asset of yours.

It's just the income is what it is. It gives you income to work from. And the definition of a millionaire is net worth. It's what you own minus what you owe. And to the extent you could put a value on the pension while you're alive, you could include that if you want to. But it's more of just a decision on your part than it is anything actual, because you can't access that money unless they allow you to do a lump sum.

And if they allow you to do a lump sum, you should roll it to an IRA anyway, and then you would know exactly how it impacts. But if you've got the lump sum number, you can use that in your calculation. It doesn't, again, you know, if you've got two very, very juicy pensions, you would need less net worth to have the same quality of life as someone that didn't. In other words, if you've got $10,000 a month coming in, $8,000 a month coming in, that's $100,000 a year. It would take about a million dollars to replace that. If you had a million dollars invested at 10%,

that would be $100,000 a year or about $8,000 a month, give or take. So, you know, that's what that's worth, but it's not worth anything because you can't get to it other than it spits out income so um for every eight thousand dollars a month of pension you have coming in you need a million dollars less net worth to uh compare to someone that does not have that pension if that makes any sense because that's all it is it's what's the purpose of the net worth? It's to be able to live the life you want and to leave assets to your kids

and, you know, to change your family tree. And, you know, to the extent if you have an asset that doesn't create any income, it helps your net worth status, but it doesn't help the quality of your life. Let's say you owned a large piece of raw ground, just a piece of farmland, not even farmland, just woods, okay, just sitting there. It's not creating any income, but it's worth a million dollars. Well, that makes you a millionaire in the sense of your net worth. It adds a million dollars to your net worth, but it doesn't create any income for you.

So it's the opposite of where you are. You've got something that doesn't affect your net worth, but it doesn't create any income for you. So it's the opposite of where you are. You've got something that doesn't affect your net worth, but it creates a fabulous income for you. So, you know, what we're trying to do is just figure out how you can have your best possible life. And, you know, getting a million-dollar net worth is a neat goal because it indicates that you've got control of enough assets to have control of most of the variables in your life from a financial standpoint. It doesn't mean you're rich.

It just means you're beginning rich. But it's not over for sure. Good question. Robert is with us in Waco, Texas. Hi, Robert. How are you? I'm doing wonderful. And you?

Better than I deserve. What's up? Me and my wife are newly married, and we are trying to start your baby steps, and we didn't know if we needed to pay off the credit cards first or the student loans or the vehicles. You list your debts, smallest to largest, on the payoff balance, regardless of the interest rate and regardless of what type of debt it is. So take your debts and each one, each individual debt, not category, but each individual debt, and then list them smallest payoff balance to largest payoff balance. Pay minimum payments on everything so you don't get behind, except that smallest one.

And then attack that smallest one with a vengeance. And when it's gone, you take that little payment that you don't get behind except that smallest one and then attack that smallest one with a vengeance and when it's gone you take that little payment that you don't have anymore plus any other money you can wring out of your budget your extra jobs and living the scorched earth lifestyle and you attack the next one down and then you attack the next one down every time you pay off one you get this benefit of wow I just lost another pound on my diet, right? Wow, this works. You have that same benefit, and you've got a little extra money that you used to pay out in the payment on that little one. And so every time that snowball rolls over, it picks up more snow. Each time you pay off a debt, it frees up more money to attack the next debt down. And that's why we call it the debt snowball and it moves in it moves you right through in

that direction so that's what i would do get after it man you can do it jake is on the line in san francisco hi jake welcome to the dave ramsey show hey dave thank you for taking my call sure what's up um you know i'm trying to do a 1031 exchange and i've got a couple of properties I want to exchange. And I'm trying to figure out where to take the money from to do the fix up that I need to do before I put it up, put them on the market. It's over 2 million between the two properties and value. And I probably need to put at least a hundred thousand into them. My concern is, I mean, I've got, you know, including my house, over $3 million in property, but my cash is not, I don't have a lot of cash, and I'm 70 years old and retiring, and I've got like a couple hundred thousand, and I run $100,000 cash.

You said you need to spend $100,000, right? Yeah, I need to spend $100,000. Does it make sense? I mean, you know, because once I put the money in to do the fix-up, that goes with the exchange, and I never get that money back. If I want my money, I've got to borrow it from me. That's true. Or you've got to do an exchange that's not 100% to 100%. You move down a little bit in the exchange, and it'll free up some capital.

Yeah. I mean, I know you don't like loans, and I'm just wondering. Before I borrowed money, I would do an exchange of $2 million down to $1.5 million, which would free up $1.5 million once you do the exchange in cash. You pay taxes on it, capital gains on it, but it's only at a 15% rate, and that would free up some cash. Because if you've got a $3 million net worth and you only end up with a couple hundred thousand dollars in cash, that's a little scary in liquid assets.

I mean, you're pretty illiquid at that point, even if everything's paid for. Well, what I'm going to do is once I get the exchange done, I'm going to sell my house and then move down to a smaller house, and then I'll probably pick up another maybe $300,000 or $400,000 cash to use, plus I've got Social Security. Why do you have to wait on the exchange to happen to do that? Oh, I just, I want to, because I want to, I want to get the properties exchanged, get that out of the way before I move. Why don't you move and free up the cash to do the exchange with? Okay, but then still the cash goes in the exchange. Yeah, but it's only a hundred grand. Or you can move down in the exchange. No, I'm not going to tell you to borrow on this. I wouldn't, and so I'm not going to tell you to.

But, you know, move from $2 million in property down to $1.8 million in property and free up a couple hundred thousand and pay the capital gains rate on that much of it. You can do a partial 1031. You don't do 100%. And that's what I would do in this case if you want to do that. And just move ahead of time and use some of the cash from the sale of your house to do this deal with. This is big news, guys. You need to stop and listen.

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That's blinds.com slash Ramsey. Emily is in Indiana. Dave, I haven't heard you mention the LIRP, the Life Insurance Retirement Policy in terms of retirement investing. It seems like a Roth IRA, but through an insurance company with life insurance included. I'm debt-free, and I've been super approved. Oh, wow. It's always good to get super approved as opposed to just approved for an LIRP through a company.

Investing in an LIRP sounds like a good idea. Why would you not recommend investing in it? Because it sucks. That's why. It's a horrible rate of return. Anytime you get involved with a cash value life insurance policy, you are going to get horrible terms and high expenses. And so there's just no exceptions to that.

Some are slightly better than others, but one sucks and the other just double sucks. There's no point in doing this. Listen, you're much better off to do your investing in good investments. There are no good life insurance investment products.

There's none. There's none that can keep up with decent growth stock mutual funds invested in your 401k and in your Roth IRA. We've just finished surveying 10,162 millionaires, asking them how they got there. Do you know how many of them got to be millionaires, asking them how they got there. Do you know how many of them got to be millionaires because they bought cash value life insurance? Of the 10,000 that we interviewed, do you know how many? Zero.

Zero. Out of over 10,000 millionaires, not one said they used a cash value life insurance product to become wealthy. Not one said, I did all my investing in cash value, in LIRPs, in indexed universal life policies, in universal policies, in variable life policies. Not one out of 10,000 said they built their wealth using life insurance as an investment product.

Not even one. I mean, my God, you would think that a blind hog could find an acre never so often, that at least one out of 10,000 could become millionaires. But these products suck so bad that they suck the very bone marrow out of your cash flow, and they put it down a rat hole. You're flushing it down the toilet, and it virtually guarantees you're not going to build wealth. So when you're arrogant, got their glasses down on the tip of his nose, rolling his eyes about Dave Ramsey, insurance agent,

says, well, all the wealthy use cash value life insurance. Let me just tell you, I have done, our company is just doing with Chris Hogan, the largest study of millionaires in North America ever done, and not one of them not even one you would think one at least i mean there were more people that became wealthy using cds making nothing on their money than they did using insurance as an investment product. They all say, I mean, like 89%, 91% say, I used mutual funds for my Roth IRAs and my 401ks, and I put money in there, and I paid off my house in 10.2 years.

And this is almost every one of them. So the deal is this. Not one, if I made myself clear, not even one of these millionaires that we've interviewed. I cannot think of anyone I've talked to in 30 years of doing this that said, Dave, you know, I made my money. The thing that caused me to become wealthy was I invested in life insurance. I've never heard that. Not once. Now, I will admit to a bias on that because I tell people it's stupid. For 30 years,

I've told people it's stupid. So I'm not likely to run into somebody that goes, hey, I'm stupid. So if they know it's me, now the survey, the research we did did not know it was me doing the research, so they were not biased in their answers. But, you know, if I'm talking to somebody here on the air, they're not going to likely to call up and go, you know, I got rich using whole life life insurance from Northwestern Mutual. I've never heard that. I mean, buying whole life life insurance from Northwestern Mutual, it's kind of like buying

a $100,000 boat. It's a good way to turn $100,000 into $10,000. You know, it's a good way to take a billionaire and make them into a millionaire. You know, it just, so let's just not be unclear about this. There's no data anywhere except hypothetical examples by your whole life agent, by your cash value life insurance agent that says this is a good idea. It's just not a good idea, folk.

Hope I wasn't unclear. Brandy is on Facebook and says, Dave, what are your thoughts on prepaying funeral expenses? I wouldn't. I would preplan it, but I wouldn't prepay it. Because were you to take that same amount of money and invest it in decent growth stock mutual funds, you'd have a lot more money than the cost of the funeral has increased.

When you prepay anything, your rate of return on your investment is how much it goes up in cost. So what's the inflation rate of funerals? If the inflation rate of funerals is 12% a year, which it's not, then you'd be making 12% on your money by prepaying. Inflation rate on funerals, however, runs more like 3%, so you're making 3% on your money if you invested the money at 10% or 12%. And when the cost of the funeral went up by 3% a year, you'd still come out like way ahead.

You see what I'm doing. So you don't prepay anything way into the future like that i would pre-plan it and you can go down and say i want the chevrolet coffin i want the cadillac coffin i want the bentley coffin i want the thing that leaks because i never could swim or doesn't leak because i never could swim or whatever i don't know whatever it is you want with your vault and all that stuff you go down there and pick it all out and look at the costs and then your relatives don't have to do that while they're grieving, and they don't have to make a $10,000, $15,000 worth of decisions,

$5,000 worth of decisions while they're grieving because you don't make nearly as good a decision when you do that. So I do believe in pre-planning your funeral. And, you know, here's another thing. Get your will done and make sure you have life insurance in place. These are the processes that you go to. Lance is on Facebook. What's your word on points for travel earned by credit cards?

Why is it a bad decision? When you use a credit card, Lance, you spend more money than when you use a debit card. And in either case, you spend more money than when you use cash. When you lay $100 bills on the table or $20 bills on the table, you realize you spent money. It activates the pain centers of the brain, literally. MRI studies done at MIT indicate this, that the pain centers of the brain are literally. MRI studies done at MIT indicate this, that the pain centers of the brain are activated when you spend with cash.

When you spend with credit card, with plastic, you don't realize you spent money as much. And even the most disciplined that feel like, oh, I'm not really buying stuff just to get points, you are. The very fact that you ask the question tells me that you're willing to spend money just to get points. And having met with, again, thousands of millionaires, I've never met one that said, Dave, you know, I made all my money with my airline miles. The high quality of my lifestyle, Dave, is because of my airline miles.

If you spend like no one else on your credit card, later you can live like no one else on your airline miles. No one ever said that saying. If you spend $100,000 on your credit card, you can fly on a flight. It's kind of expensive. Kind of stupid. You're falling into their trap. You're not winning. This is the Dave Ramsey Show. Appreciate it. In the lobby of Ramsey Solutions, Marty is with us. Hi, Marty. How are you? I'm fantastic. How are you, Dave? Better than I deserve. Where do you live? I live in Morris, Minnesota. It's a small town about three hours northwest of Minneapolis-St. Paul. Cool. Good to have you. All the way to Nashville. Yes, sir. To do a debt-free

screen. Absolutely. How much you paid off? $49,000. Cool. How long did this take? 32 months. Good. And your range of income? I started right after college, right around $35,000 up to right around $55,000. Okay. So you get out of college and you're paying off student loans. Absolutely. However, it was a private student loan to my parents. Oh. Yes, so we had a verbal agreement that they would pay for my schooling, and the ticket was that it was going to be interest-free.

And I got out of college and just didn't have a plan. Okay, so you owed them $49,000. Yes. They didn't borrow the money. They loaned it to you. Correct. Okay. So you owed them $49,000. Yes. They didn't borrow the money. They loaned it to you. Correct. Okay. But interest free, but you had to clear 49,000 bucks straight out of school. Right. Okay, cool. What do you do for a living? I'm a farmer in the dairy and beef industry. Oh, okay. Cool. Cool. So you own a farm or what? I work with a partnership.

Yep. Okay. Very good. Good. All right. And so your degree is in what? Agricultural Economics from South Dakota State. Of course it is. Yes, of course it is. You're actually using your degree. So you came out of school with no plan, but we got to do something. So what happened 32 months ago? Yeah.

So I had been working for just a couple months, and I'm fortunate enough to work with a couple of my older brothers on the farm. And they sat me down one March, Saturday in 2015. I thought it was for a normal farm meeting. Turns out it was not. And they sat me down and they asked me a series of questions. And they asked me how much I had made since I started my career. It had only been about three months. How much I had paid off to my parents.

And I think it was right around like a measly $700 in three months. So, and it was really sporadic. And then they asked me a question and I was so ashamed Dave because I had no answer they asked me where the rest of the money went because I'm a spender and I had no answer and so that very day we made my first budget they gave me the total money makeover and took me a couple months to really get on board but then I got wired up and fired up and it wasn't long before i was i was all in wow so it was a brother intervention yes yes the brothers ganged up on the little sister did i know nothing new about that no not at all well the good news is you're not afraid of hard work and you do know how to implement a plan with the hard work that you do and with the uh the

career field that you've chosen it's anything but it's always hard work uh so you knew what to do then you just had to roll up your sleeves and get after it right yeah absolutely but it took a few months to kind of get moving huh it did because it wasn't my plan so my ego definitely got in there um but i realized they were right after a few months. Okay. So they held you accountable then, huh? They did. If I would ever, if I was ever wearing something new or had anything new, I was held accountable by not only my brothers, a lot of coworkers and family of where'd that come from? Was that in your budget? And that was the ticket for me was my plan was to tell people around me and that was my accountability team since I'm single.

And that's, I got a lot of coworkers listening today for that reason. Very cool. So you had lots of encouragement. Yes. Some of it a little over the top. Yes. Lots of encouragement. Yes.

Very good. Very good. Well, it's neat that you've got a good enough relationship with them that you could accept that from them at least a little bit grudgingly, but get it going and that they felt like they could speak into your life. That's very cool. That's a testament to your parents, too. Yes, absolutely. Very well done.

So what advice do you have to a young single lady just graduated from college with $50,000 in debt? Well, the first thing, of course, the technical piece is to make the budget. I used every dollar, and I love it. Budgeting has become somewhat of an extracurricular for me now. I really enjoy doing it. But like I mentioned before, the accountability piece, but then also contentment and really enjoying the journey and what it taught me because, you know, I was right at college, so I've really grown. I know I've got a long ways to go, but I really grew in the last three years because of that. I bet. Yeah, you do, because you have to deal with the person in your mirror every day to hit this goal and that that's a long 32 months right there yes and uh there's a lot of people

your age would be out doing other things right now with that money so uh but you completely cleared it up how's it feel uh i underestimated the feeling um really i was worried it would maybe be a little anticlimactic i paid off my my debt on Christmas Eve of last year. I gave my dad the last check for three grand because I love Christmas, and I loved getting out of debt. So it was just the perfect time to do it. Yeah. And I underestimated how good it would really feel. Yeah, I bet. Well, way to go. I'm proud of you. I know your brothers and your parents are. Well done. And your co-workers. Well done. Good job. Very good job. Very fun. So what was the hardest part for you? The hardest part was saying no. I'm a very social person. I really like to go out and do things. And I haven't really done anything for the past 32 months. I said no to a lot of things. And I had to make it really dramatic

for myself. And so what I ended up doing is, let's say I got invited to go out for pizza, right? And so that was really hard to say no to. but then I would always come back to the question, do I want pizza or do I want to be debt-free, right? Do I want to go shopping or do I want to be debt-free? And the answer was so obvious then, and I needed to make it that dramatic in order for me to stay on the plan. Yeah, yeah, you do. So what are you going to do to celebrate? Well, I'm here in Nashville with a couple of my co-workers. We're here for an extended weekend. Good. Yep. That's a good celebration. Yes. A bit of a trip there. A bit serious road trip. Yeah, good. Very cool. Way to go, Marty. We got a copy of Chris Hogan's book, Retire Inspired, for you. And that is the next chapter in your story for you to be a millionaire now. And you're on your way. You got control of one of life's most difficult subjects and that's money

well done very very well done all right it's marty from st cloud minnesota 49 000 paid off in 32 months making 35 to 55 count it down let's hear a debt-free scream three two. I'm debt free! Yeah! That's how they do it in Minnesota, ladies and gentlemen. Well done. Well done. Well played. Oh, man.

Good stuff. Very good stuff. You know, you hear over and over and over and again when i ask the question what's the key to getting out of debt she said it get your budget done she said i use every dollar budget i love the line budget has become an extracurricular activity and listen about five million people are using every dollar now so i don't know what you are waiting on but if you're really going to get serious about this and really learn how to handle money and really get out of debt and really build wealth and really be outrageously generous, it's an act of intentionality. And today, you know,

it's the first of the month, right? Here we are at the beginning of the month. You get paid. Do you know where the money's going to go this month? If you don't, then you don't have a budget. A budget is your roadmap. It shows you how to get there. It's your GPS that says turn here, don't turn here, turn here, turn around. You've gone too far. That's what the budget says. It talks to you in one of those voices, right?

Every dollar doesn't talk to you, but the numbers do. So if you've never budgeted before or you've gotten a little off track or you've fallen off the wagon and this time you're ready to really do it, go to everydollar.com, sign up for a free account. You can download the mobile app for your iPhone or your Android. You can put it on your desktop. You enter your income, your expenses. It's a customizable template. It takes about 10 minutes.

If you have the free version, you just enter your expenses as you go so you can track your spend. If you get the premium version, then your expenses show up in every dollar because they're attached to your bank account. And that premium version is really cool. And having a plan helps you get rid of debt and save for the future while making sure you have room for the fun stuff each month. This is the most robust and elegant budgeting software out there, completely free to get started, only takes 10 minutes.

If you want to upgrade and do the premium, we'd love to have you do that too. So check it out every dollar. You've got to do a plan, folks. No one accidentally wins the Super Bowl. No one accidentally becomes a millionaire. No one accidentally gets the Super Bowl. No one accidentally becomes a millionaire. No one accidentally gets out of debt. You can wander into debt, darling. You can't wander out.

It takes an intentional act to change your life, and the budgeting is a key part of that. When you get sick and tired of being sick and tired, darling, that's when you're going to do a plan, and you're going to stick to your plan. But until then, you're going to live in the land of ish. Ish. I'm doing it ish. Doesn't work, baby. Doesn't work. Check it out. Everydollar.com. This is the Dave Ramsey Show. Thank you. Gabriella is in Long Beach, California. Welcome to the Dave Ramsey Show, Gabriella. Hey, how's it going?

Better than I deserve. What's up in your world? This is just such an honor and such a blessing to just be able to even ask you a question that's going to help improve my life. And I'm just seeking some guidance right now. Me and my boyfriend recently moved from Buffalo all the way out here, and I'm originally from here. Yeah, so it was definitely something that we had planned on doing. We have plans for marriage later on, too.

So we've been listening to you for a couple of months now. My friend introduced me to the Total Money Makeover, and just in the last six months, you've just brought such a light over my life that it's just... Thank you. I'm glad we could help. How can I help today? It's amazing. So I'm currently in debt. I'm current with all of my bills, and I'm on the debt snowball.

So I have some stocks with my employers that they provide, and I'm wondering if I should take that out to just kind of like kick the debt in the butt. It's not in a retirement account, is it? It's not. It's not. Yes, I would cash it out. Okay, then. And then I also have restricted stocks coming in October.

I was wondering if I should wait because I was recently in an accident about a year and a half ago, and we're in the process of a settlement being arranged, but I don't know how much. I don't know what will occur of that, but I was hoping to use that towards the rest of the debt because my debt is just in card and student loan. I went to Buffalo for my master's in trade and development. So here's the deal. How much stock have you got?

What's it worth? The total balance is just under $2,000. Okay. And how much debt do you have? I have, including my car and my student loan, just about $40,000. Okay. So cash it out and put it on the student loan. It doesn't matter.

And then the restricted stock is how much? I guess I got it mixed up. The restricted stock is about $2,000. In October, it's supposed to be about $8,000. Okay, so you can't touch restricted stock. That's why it's called restricted. Exactly, exactly. So you can only take out what you can take.

It doesn't matter. You can't take out the restricted stock, period, until the restriction's up. And the restriction's up in October. How much is the restricted stock? I'm not sure, honestly. Okay, and how much do you have that is not restricted? $2,000. Okay, cash that out now, and then when the restricted comes up, cash it out.

Okay, then. And use it on your debt, and then if you have a settlement that you have to do, you have to work that out with the other debts that you're working on. And what that assumes is that there's something coming out of your pocket that your insurance isn't going to cover. You had a car wreck, and your liability insurance should cover any settlement that comes up. Yeah, and that's what I'm hoping to see come from the settlement because that's kind of where the card that came into place.

Oh, the settlement's coming to you, not from you? Oh, yeah, yes. It's coming to me. Oh, great. Then you'll be able to pay off a bunch of debt with that money then, too. Okay, so we have restricted stock. We have stock that is not restricted. Take it out now. We have stock that is not restricted. Take it out now.

We have stock that is restricted. Take it out when the restriction leaves. And when the settlement comes, play it. And everything else you can squeeze out of your budget, play all of that. And we're going to play towards this, you know, working your debt snowball. List your debts smallest to largest. Pay it on the smallest debt, whatever you get your hands on, whatever source it comes from.

And then knock the next one out. And then knock the next one down. And then knock the next one down. And you knock the next one down, and then knock the next one down. And you don't get to play with any of that money. This is grown-up time. We're using all of that money to clean up the messes that you've made. Dan is in Wichita, Kansas. Hi, Dan.

Welcome to the Dave Ramsey Show. Hey, Dave. Good to talk to you. You too, sir. What's up? Can you settle a disagreement for me? I'll try. All right.

I know I'm right but i need to hear it from the teacher's mouth to prove the point here okay uh so my father-in-law told my wife last night over dinner that dave ramsey would say to stop tithing to your local church until you get out of debt no dave ramsey has never said that that's exactly what i told her not one time in 30 years that's an easy one years. That's an easy one to answer. That's an easy one to answer. Now, let's talk about, you know, I think a more interesting discussion rather than Dave's opinion, which is a very interesting discussion to no one but Dave. But anyway, you know, why would I never say that?

I think that's an interesting discussion because that's something to think about is why we, you know. Well, for a person of faith, a Christian that believes the Bible, most of us would define that one way of defining a hardcore Bible-believing Christian as an evangelical Christian. Lots of Catholics also and Protestants of other kinds also believe the Bible. Certainly lots of my Jewish friends believe in the Talmud, what we call the Old Testament, okay? So anyone that is in those two groups or those three or four groups, Christians and Jewish, that are following as best we can figure out

what Scripture says, and that's our handbook. That's our love letter from God. Our Heavenly Father loves us. Then I'm going to use that, and what that says matters to me a lot more than what some goob on the radio says, like me. Okay? Yeah, and it's even funnier because I'm a pastor. Okay.

He's telling my wife that the pastor of the church should stop tithing to the church. That's downright insulting, but... Yeah, yeah, exactly. Golly yeah exactly well this guy's got nerve so uh you know so then the thing is this you know someone in this conversation might be your father-in-law is not operating from a biblical paradigm you and you and i are and so we're not arguing about what dave ramsey thinks or what pastor thinks we're just saying if two people say if we can come to agreement on this thing we want to do what the bible says right not what dave says not what pastor says not what the denominational headquarters say not what the father-in-law says i wonder what the bible says that's my guideline

as best i can figure it out and I can't always figure it out. Sometimes it's very nuanced, and I don't get it, you know. And I can't, you know, sometimes I can't tell the difference in last night's pizza and the Holy Spirit. So I'm, you know, I am not necessarily the spiritual king of all kings in that sense. But I have read Scripture on this for 40 years now. And I've been challenged probably more than about anybody you've ever met on this subject so what the only thing i can find about the tithe which is a tenth of your income by the way that's the hebrew word means tenth literally it's not a it's not five percent you can't 20th

a tenth okay it's a tenth and so it's a tenth of your income. The only thing I can find about it is that it's first fruits. And it says that several times in the Psalms and several times in Proverbs. First fruits in an agrarian culture means when we're picking in the orchard, the first 10% of our harvest goes to the Lord before we do anything off the top. That's what first fruits means. And then with what's left, we work it out. Now, why does God have us to do that? Because he's greedy and wants our money?

Nope. Nope. Doesn't need our money. He's God. If he wants our money, he'll take it. There'll be a greasy spot where you were sitting. He's God. He doesn't need your money.

He'll just take it. So why does he have you to give? Because he wants to teach us to be like him, and he's a giver. That's exactly right. And it's even more ironic that he said it this week because I'm preaching on tithing this weekend. Oh, of course. Of course. So he gave you a great object lesson for it.

You better not do that. I'm kidding. But it sure is tempting. Sure is tempting to send him a copy of the message. But, you know, so for me, what the tithe is, is my heavenly father loves me, and he says, kid, I love you. Here's how you live. First thing you do is you give. The second thing you do is you take care of your own household

or you're worse than an unbeliever. And you walk up that line. And so then I start working to get out of debt and save money and the other biblical principles of handling money. But I give a tenth of my income to my local church. I always have ever since I met God because I just believe that that's what he tells me to do. And I use the Bible as my guideline, not someone's opinion.

And so including if you don't want my opinion, you want to use the Bible as my guideline, not someone's opinion. And so, including if you don't want my opinion, you want to use the Bible. So go study it and see if you find something different. You won't, because I'm right. This is The Dave Ramsey Show. This is James Childs, producer of The Dave Ramsey Show. Did you know you can now listen to The Dave Ramsey Show on Pandora and Spotify? For all the ways to watch and listen, check out our show page at DaveRamsey.com slash show.