The Ramsey Show - App - How to Budget for Quarterly Taxes (Hour 3)

Episode Date: August 17, 2018

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🎵 Live from the headquarters of Ramsey Solutions, it's the Dave Ramsey Show, where debt is dumb, cash is king, and the paid-off home mortgage has taken the place of the BMW as the status symbol of choice. I'm Dave Ramsey, your host. You jump in, we'll talk about your life and your money. It is a free call at 888-825-5225. That's 888-825-5225.

Brian is with us in Lexington, Kentucky, to start off this hour. Hey, Brian, how are you? Better than I deserve, Dave. I hope you're doing the same. I am, sir. How can I help? Well, I feel like I don't have a whole lot of debt all i've got to my house and i've got about forty five hundred dollars left on my truck

but i'm i'm a little scared to write a forty five hundred dollar check for my truck because i feel like i'm spread a little thin as far as like over diversified and that if something wants to make a turn for the worst that i might not be able to cover other expenses i'm not doing a good job preparing for retirement i'm confused um okay forty five hundred dollars puts you in peril no not that but as far as like emergency funds and stuff like that i you know or have what i've got saved up as far as accessible cash. Yeah, how much accessible cash do you have? I've got a money market account that's got about $21,000 in it. Okay, and you think something would happen that the difference in $21,000 and $15,000 is going to matter?

Well, there's more to it than that. Like I said, I've got a couple of 401ks a roth ira i've got a life insurance policy that's more targeted for retirement than it is for actual life insurance yeah that's a piece of crap okay what else um you know of course i've got my house um i know about so what's that got to do with this you so what you've've got a retirement account. You've got a life insurance policy. So what? You've got $21,000. You write a check and you pay off your car.

Now you've got $16,000. So what? Okay. What's it matter? You're not in peril. Have you lost your job? Is somebody sick? I mean.

No, no, no. I guess there's always that fear that the that the job could go away yeah but the difference in 16 return the difference in 16 and 21 ain't gonna save you if you burn through 16 you're gonna burn through 21 okay um okay my point is your fears are emotional they're not logical. Logical fears don't touch a hot stove. But mathematically, what you're describing to me is not a logical fear. Okay.

And that's kind of what I figured as well. I just kind of wanted somebody to really just kind of put it into reality for me so I could more or less anything else. So how much is your car payment? Right now, about $180 a month. How much have you been paying on it? About $200 a month, and then I've been using the rest of that to go towards the house. What's your household income? My household income, I'm realizing about $35,000 a year.

Okay, good. Well, you've done a really good job with that income to be where you are. Excellent job. How old are you? I just turned 36 earlier this year, but I've been saving since my parents. Well, my parents have had me saving since I was about two. Well, well, my parents have had me savings in total about two. Well, good, good. Well, the good news is.

That's the other half of it is writing those big checks. You know, they don't believe in debt, but they also, you know, they also, you know, anytime you write a check that big, you better be 100% certain and no fears, rational or irrational. Exactly, exactly. And so. Yeah, so what I would do, I mean, irrational fear, we don't use that to make decisions with, but rational fears we would.

So I would, yeah, I'd write a check today, and I would be debt-free. And then if you want to build that fund up, I would stop paying extra on your house, and you don't have a car payment anymore, and I would load that back up to 21. You get it back up there in a heartbeat in about five six months you'll be back up there okay um now the other the other question i had and it was kind of a logical thing that that there was a second logical aspect that i had the irrational fear that she's talking out of the other half of it is only oh and four grand on the on the truck the interest on that is pennies, whereas doing the math, the extra money that I'm putting towards the house is about $60, $70 a month.

If you use that logic, you would go borrow $100,000 on your car to pay off your house. Okay, yeah, because I was going to say the amount of interest that it's knocking off, the final bill is more than what I'm saving on the month. Again, if you can learn to get out of and stay out of any debt, that is your shortest path to wealth, because your most powerful wealth-building tool is your income. And so you're in a really good place. You've done a really good job you're

thinking about it you're doing it on purpose um i mean for a guy with your income at your age you're doing an excellent job overall the only thing i would fine-tune is just write a check today and pay off the car and then let's rebuild your emergency fund up to a point that you're comfortable maybe it's not 21 maybe it's 20 20. I don't care. Just set yourself a magic number, raise it to there, and then start throwing money at the house after that, and keep putting money in your 401k. That's the baby steps that we teach. Darren is with us in Denver, Colorado. Hi, Darren. How are you? I am doing outstanding, Dave. I'm excited to talk to you today.

You too. How can I help? Yeah. Well, my wife and I are having a debate about tithe, and I had the idea about giving our tithe into a giving fund so that it'll keep on giving and increasing it. It'd be like a growth stock mutual fund type, and you can't reverse it so once you give in uh then you can't take it back out it'd be tax deductible and then you can choose any 501c3

to give to and so well if you want to do your charitable giving that way that is okay to do if you're discussing a tithe then that puts you in a Bible study discussion about what the tithe is. And evangelical Christians have believed and taught for hundreds of years that the tithe is a tenth of your income going to your local church. So paying your mother's electric bill is not a tithe. Right, right. is not a tithe right right so uh so then the other thing i was thinking was that we would do we we like to give and so we wanted uh so we would do 10 to our local church and then whatever we give above that what do you think about doing a giving fund that's fine there's

nothing wrong with that at all it's there's a lot of direct there's a lot of directed giving possibilities out there donor advised funds and that kind of thing and um that's an okay way to do it uh the beauty of that is it allows you to straddle a calendar year so you can dump some money in this year and not actually make the contribution this year move it move it another year but you still get the write-off because it's gone into a 501c3, into a donor advice fund. And a lot of people use those, but that would be in your offering category above and beyond the tithe if you're looking at that through the lens of an evangelical Christian. I don't know if you are or not, but when someone says tithe, that's the first assumption I

make. It could be an Orthodox Jewish person. I don't know. I mean, that's the only two places you hear the word tithe is in those two arenas. And so you just look at it through that and decide what you want to do. If you're neither of those, then you're free to give however you want to be generous. You're free to give anyway however you want. But that's your biblical guidelines. This is The Dave Ramsey Show.

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Welcome to the Dave Ramsey Show. Zach, how are you? Hey, Dave. I'm blessed, sir. How are you? Better than I deserve. What's up? So I got married earlier this year. Congratulations.

Thank you, sir. And it's going well. I entered the marriage debt-free, but my wife entered it with about $61,000 in debt from student loans. We're talking about how to knock that out, and I'd love to get your opinion on what you think is best. What's your new household income? The household income is about $95,000. Okay, and she has $60,000 in student loan debt.

Yes. All right right got it okay um i have about 10 10k in savings and she has about 20k in savings great uh in addition her parents bought her a 2015 lexus it's all paid but it was a gift to her. So I told her, after hearing your show and going through the financial class, which I love, I said, let's put all my savings onto the debt, take all your savings, let's put aside maybe $3,000 for emergency, and then let's sell the car. And she just cringed. She's having a really hard time with it. What's the car worth? Kelly Blue Book says it's about $23,000. What's your car worth?

I'm actually using that car. We're sharing that one car. She lives from home. I see. Okay. So you have one car? Yes, sir. Alright. So let's get this straight. If you do proper, according to Financial Peace University, you would keep $1,000 for baby step one,

and you would put $29,000 towards the $60,000, so we'd have $31,000 to pay off, not counting this car transaction, making $95,000 a year, correct? That's correct. Okay. No, I would not sell this car. Okay. But I would get on a really tight beans and rice budget,

and I'm not going out to eat, and I'm not going on vacation. And since we're keeping the car, the tradeoff is we're going to cut lifestyle really, really deeply so that within a year we are debt-free. Would that opinion still be there if I told you I was going to be going back to grad school later this year? How are you going to pay for it? I'm going to budget for it. I'm going to cash flow. Okay.

What does that cost uh the the total cost of the program about three years is about 36 000 so about 12 000 a year okay yeah and uh what are you studying it's gonna be uh marriage and family therapy okay and you are uh already accepted and scheduled to start, or this is theory? Well, I'm going to hear back in the next day or so for the application submission. I see. And what do you do now? Just trying to plan. I'm an engineer for the Department of Defense. You're a what? I'm an engineer for the Department of Defense.

Okay. All right. Is there any reason you can't tap the brakes and start your grad school after you finish getting out of debt? No. In fact, that's what a friend recommended I do. Yeah. Yeah. That's probably what I would do. I mean, if you can do both and if you can start grad school and pay off this debt in one year and keep the car, I'd go ahead and start.

I'm fine with that. That's just going to mean you have to cut that much deeper because you need $12,000. Okay. In addition to $30,000 out of $95,000. And that means you're going to be on, I mean, you really are going to be on beans and rice. You guys are probably picking up an extra job in order to do this. But this car is really not out of line. Your income to a $30,000 net of savings is a great ratio, the shovel-to-hole ratio. And she's really emotionally tied into this car.

You just got married. I think you're going to regret selling this car. I think it's going to come back to haunt you in the relationship and uh if it was crazy i would take that chance but it's not really crazy um you know if if you didn't have a good income and you had some other situations we might have to do it but i think you can do it here the only question then is just whether we when we start grad school and are we willing to cut lifestyle that deep. If she's unwilling to cut lifestyle and wants to keep the car, you can't have both.

You got to get rid of one or the other. That's what I would do. But personally, I'd keep this car. It's a reasonable car. And it fits in your situation pretty well. And it means a lot to her because it was a gift. Lindsay is with us in dallas texas hi lindsey how are you i'm great how are you dave better than i deserve what's up well i'm wondering

if we should sell our house do you like it um i mean we're not in love with it um but we could list it we've had realtors come over and we could list it for 190 and we owe 100 on it and then we also have 80 000 in debt okay so you couldn't quite get out of debt by selling it then you'd be a renter right while you're saving it while you're finishing off the debt and saving up the down payment right exactly okay and then uh so it would take you like two years to do that after and then you'd be buying a house two years from now. The house you bought two or three years from now, what would it look like? Would it look similar to the one you're living in? I'm not really sure.

Probably smaller or, you know, but generally in the same area. But the concern is that my husband is paid strictly on commission he's an auto body collision guy yeah and so we never know what our income's going to be and that's kind of been you don't know month in and month out but you know you're in and you're out if he works he gets paid and you've had some good years basically yeah that that's not that doesn't mean you sell your house um what is your household income so right now it's about 75 000 a year and so we've got our mortgage is 14 25 a, and our minimum payments just on debt besides the house is $2,000 a month. Yeah.

Well, there's nothing in these numbers that screams sell the house, because you could be debt-free in two and a half years budgeting through this. So nothing is screaming sell the house. If you were debt-free in two and a half years and then you decided to move, you'd have a ton of equity to move with, and you'd move once. If you move now, you're going to rent for three years, give or take, and then you're going to move again. And, no, I'm not hearing any compelling reason to sell this house.

But, again, much like the last guy on the car, if you don't sell the house house then you would want to be committed to cutting your lifestyle really deeply and be on a two and a half year game plan with your debt snowball to clear this if you don't want to do that you'd rather rent for a little bit and clean up your debt then it's okay to sell it there's nothing wrong with that there's nothing nothing in the on this list that's like in the stupid column so you're fine you're fine either way kind of like the other guy is he's fine either way with that car or without it it's just the good news is you're actually thinking about it and you're making your decisions intentionally not impulsively like most people do with personal finance these days so very very well done our question of the day comes from

blinds.com they have have a 100% satisfaction guarantee, which means even if you mismeasure or pick the wrong color, they'll remake your blinds for free. Always put in the promo code Ramsey, and you'll see the best possible deal out there at blinds.com. Today's question comes from McKenzie in Des Moines. I recently started my own business, and I know I'm supposed to pay taxes quarterly. How do I budget for those, and how much do I save? Well, when you start a business like that, you need to open a separate checking account. All of your business income, 100% of it goes into that checking account. Nothing else goes into that checking account.

Nothing comes out of that checking account except business expenses. So if only business income and only business expenses are going and coming out what's left in there by definition is profit so when you take that home set aside 25 of that for your federal uh quarterly estimates and you'll be pretty close unless you make over 60 70 000 profit at that point you may want to kick it up a little bit. Profit, taxable income, in other words. But as long as you're below that, your 25% will take care of your stuff. Now, if you are a tax person out there and you need the answer to that question,

you might want to be one of our tax ELPs. Yeah, we're looking for tax ELPs. And, you know, to make sure we're completely ready and staffed and everything for next spring when everybody's doing their taxes, you may want to get in touch with us at DaveRamsey.com and ask about being one of the tax preparers and endorsed local providers, people we endorse for taxes. One question I get asked all the time is, do I need life insurance? Listen, the whole point of life insurance is to replace your income for someone who counts on you. So if you have a spouse or you have kids, yes, you need term life insurance. It's the only way to protect them until you're out of debt and have built up your wealth. I'll see you next time. not expensive it's not complicated and zander will be there as your guide every step of the way

visit zander.com or call 800-356-4282 you need to get this taken care of i can give you the advice and i can tell you where to go but it's really up to you to take that important step to get your family protected that's zander.com or 800-356-4282. In the lobby of Ramsey Solutions, Josh and Jill are with us. Welcome, guys. How are you? Doing great. Thank you, Dave.

Thank you. We're doing good. Good to have you. Where are you guys from? Indian Land, South Carolina. It's just south of Charlotte. Okay. Well, welcome to Nashville.

Thank you. And all the way over here to do your debt-free scream. Yes, sir. I love it. I love it. How much have you paid off? It's been $119,500. All right.

Very cool. How long did that take? 20 months. Good for you. And your range of income during that time? It was 74, just over 74 to just over 100,000. That's a lot of raise in 20 months. How did you get that big raise?

Well, one of the ways that we did it was Josh ended up, he bought a business early on, and we ended up paying off the business debt, and he was able to take a personal raise too. And then what I do is home health physical therapy, so I get paid per patient. And so I just started taking on extra patients and working weekends. Working like a maniac. Yeah. Okay, cool. Cool. So you you do home health care what kind of business you got josh uh loan uh loan maintenance landscaping good for you very cool so what kind of debt was the 120 thousand dollars a little bit of it was business and the other was Aunt Sally Mae. Okay. So a lot of student loans. A lot of student loans.

And how much of it was business? $27,500. And what did you buy for the business? Lawnmowers, trucks. Feeders, blowers. Everything. Yeah. So you spent $30,000 on equipment for your lawn maintenance and landscaping business.

Okay. And then you've got that all cleaned up, plus Sally Mae. And that's it. That's it. Just student loans and that. That's it. So where did this money come from in 20 months? Right.

Wow. That's like $60,000 a year you're throwing at us. We had quite a bit saved up in savings. So over the course of 20 months, I was able to slowly part with it more and more to get that emergency fund down. Got you. So how much of the $120 came out of savings? Probably about $25,000 to $30,000. Oh, so you still did $90,000 in 20 months cash flow.

Yeah, yeah. Which is like $45,000 a year out of this income. Yes, yeah. It was about that that you've been on beans and rice pretty much my entire paycheck went out to selling all you guys have been doing is working and paying debt i mean you hadn't done anything else i mean this is this is impressive very cool so what do you tell people the secret to getting out of debt is definitely a budget communication is is key. A budget.

We didn't know exactly how much we were bringing in, and we didn't really know how much was going out before we started. Yeah, before we started your plan, we had been married about a year, and we had separate accounts still. We had, you know, our checks going into our accounts. He would pay some bills. I would pay some bills. We had no idea what was going on. So what got you started on this? Honestly, it was I knew how much student loans I had,

and I had been out of school about five years and paid off a third of my student loans. And I just thought, man, the rate this is going, it kind of scared me to think, what if something were to happen to me or what if I couldn't work? And then we've got still $100,000, and I said, Starbucks isn't going to pay this off. So I started actually getting on Pinterest and looking up budget forms, and someone on there had taken your forms and made them pink and turquoise and cute, and I thought, oh, these are nice. I'm going to, I'll start, I'll print

some of these off, and they had talked about Dave Ramsey, and I thought, these are nice I'm gonna I'll start I'll print some of these off and they had talked about Dave Ramsey and I thought you know I've heard of Dave Ramsey my dad you know growing up listened to talk radio all the time so I'd heard your name but I didn't know much about you so I started looking into that and I thought we've got to do this so cool okay so Josh she comes in and goes I've been looking at pink and turquoise budget forms, and there's some guy named Dave Ramsey that must have had something to do with this, but I promise you I didn't make those. What did you say? First, I was a little hesitant, but I do hate owing money to anybody.

We did the Financial Peace University about a year ago, and that definitely got us help, got us on track to keep pushing through. That threw a little gas on the fire. Yeah, it definitely did. And then we both decided, you know, all in, all or nothing. So we took off with that. How does it feel now? Awesome. Was it worth it?

Oh, my gosh. Yes, definitely. So worth it. I think, you know, like every day, you know, going to work, I'd listen to your podcast, and I would think, okay know, like every day, you know, going to work, I'd listen to your podcast, and I would think, okay, we're this close. I'd had a little sticky note in my car on my dash that would just, I'd cross off each payment each month and be like, we're that much closer, we're that much closer. I'm working for that.

I'm working for that. And, you know, when we first started, it was just to get out of debt. And then, actually, this year, we're now expecting. So it's kind of like a whole new ballgame for us. Change the family tree now. Yeah. You'll be the last ones in debt right yes never again i love it well congratulations you two very very well done we got a copy of chris hogan's book for you retire inspired uh that's the next chapter of your story once you'll be millionaires now and outrageously generous as you go along so have fun and have fun with money and

always be giving it as you go and we're going to show you how to take those next steps too so we're honored we got to walk with you through this part very well done proud of you guys thank you did you have some detractors or cheerleaders along the way mostly cheerleaders i would say we really didn't have anyone kind of put us down we actually have a lot of friends that have gone through the program now um amy and jennifer back home have gone through it and they're like on their way too and so we're actually here with um our financial advisor our elp from you and um our sister so all right celebrating with us too very cool so you got a whole gang to support you yes that's good brought the posse with you. Excellent. Very well done. All right, you guys. It's Josh and Jill from the Charlotte, North Carolina, South Carolina area.

$120,000 paid off in 20 months, making $74,000 to $100,000. Count it down. Let's hear a debt-free scream. Three, two, one. We're debt-free! We're debt-free! Love it! Boom!

This is how it's done right here. Man, that is absolutely fabulous. You gotta love it. It changes everything. Hey, if you want to see some of these inspiring stories, you can always jump on the youtube channel just go to the dave ramsey show youtube channel and there's all kinds of well all the debt-free screams are posted there a lot of my rants are posted there and um you know the other

thing is that we've got the app for the dave ramsey Show that you can watch the show now as well. And so you can download episodes for offline playback. You can have the option to customize the show content to however you want it done. It's an easy place to see what guests and special segments are coming up. But again, you can watch the show, you can listen to the show, and you've got complete control over it. It's the ultimate player of The Dave Ramsey Show. Oh, and it's free.

And you can get it for your Android or your Apple product, either one, your Androids or iOS, Apple Store, Google Play Store, either one. Just check it out. Get the Dave Ramsey Show app, DaveRamsey.com slash show. Shelby is with us in Little Rock, Arkansas. Hi, Shelby. How are you? Hi, I'm good. How are you?

Better than I deserve. What's up? Good. Thank you so much for taking my call. I have a question for you that I know you've probably answered a thousand times, so I apologize in advance for the redundancy. No troubles. Mine and my husband's situation is just slightly different. We had a car that we owed about $9,000 on, and it was having mechanical problems that we couldn't afford. So we made the mistake of trading it in on a GMC Terrain. So on top of the negative equity and the high interest rate, we owe about $26,000 on the Terrain. But the problem is that two weeks after we got the car we found out that we were expecting another baby which is good but we already have two children still in car seats and the third car seat will not fit in the back seat we've done measurements we've tried

different sizes of boosters and now it's five weeks until we have the baby and we just don't know what to do we don't want to be impulsive. We've just recently started following your program and working on our emergency fund. And so we really want to be wise, but we just don't know what to do. Is this your only car? No, sir. My husband has a paid-off 2000, I think, Tahoe, but it is about to buy to dust. It doesn't have much life left in it. Well, I mean, you're going to end up trading cars,

but what you need to do is you're going to have to trade way, way, way down in price by getting something large enough that a car seat will go in it. Oh, by the way, they'll all go in the Tahoe in the meantime, so there's no panic. You're just going to be driving the Tahoe with the kids. So you get these trades done. But you've got to get out of the car for a lot of different reasons. But move way down. Way, way down. Our scripture of the day is Psalm 139.14.

I praise you for I am fearfully and wonderfully made. Wonderful are your works. My soul knows it very well. Herman Melville said, It is better to fail in originality than to succeed in intimidation? Imitation, I think. Imitation. Spell check, gotcha.

Okay. It's better to fail in originality than to succeed in imitation. That's what that should read. Very well. That's a good line. I like that. In other words, don't steal other people's stuff. Make up your own stuff.

Why is that hard? Oh, my goodness gracious. Denise is with us. Denise is in San Antonio. How are you, Denise? Hi, Mr. Anthony. I'm good. Yourself? Good. How can I help? Yeah, I. How are you, Denise? Hi, Mr. Anthony. I'm good, yourself?

Good. How can I help? Yeah, I wanted to ask you, how much should we set aside for a business I want to start? I'm a stay-at-home mom, and we're on baby step number four, and we're debt-free, including our house. So I just wanted to see how much you recommend. What kind of business are you starting? A bookkeeping business. A bookkeeping business. I just want to get a few clients for right now.

So how much money do you need to start the business? I'm not sure because I've been out of school for a while, so I wanted to kind of brush up on my business and bookkeeping skills. So I wanted to take a few online courses. Have you priced them? I want to say about $5,000. Have you priced the courses? I'm sorry?

Have you priced out the courses? Yes, sir. Okay. And they cost how much? One of them is $1,000, and the other one was about $500. Okay. So that's $1,500. And what else do you need to start a business?

I would pretty much need like a laptop or a computer, and I wanted to get a certification in QuickBooks. That sounds good. And a few more books, yes, sir. Okay, all right. Have you got $5,000? Yes, we actually do. But the reason I'm asking also is because we haven't been investing anything this time.

So we started at $15,000, and we kind of wanted to up it up to $20,000. We've cash flowed our home and our vehicles, and my husband has this construction business, so he cash flows. So everything is paid for, including your home? Yes, sir. Way to go. Very well done. Well, I think you can afford $5,000 then to get this going.

Now, the trick is always when you're starting a business, you're always looking, and you know this from your accounting background, for a return on investment. If you're going to put $5,000 in, I want you to make $50,000 out. I want you to make $40,000 out. I don't want you to put $5,000 in and go, yeah, I don't want to do this. No, you need to go make some money if you put the money in there. It's not a hobby.

It's a business. A business should make a profit. So they put $5,000 in. I want you to get more than five back out. If you get $5.10 back out, you made only 10 cents. That's not worth fooling with. So you need to have a plan to go make some money, and there's nothing wrong with that. Patty is with us in Orlando, Florida.

Hi, Patty. How are you? I'm fine, thank you. Thank you for taking my call. Sure, what's up? So I just recently got $25,000 from my mom's estate. And you keep talking about mutual funds and doing the investments in them. Where do I go to find out?

Because when I try to ask questions, I don't get a whole lot of answers. It's like loads, no loads. And I don't want to spend the money. So I'm like, gee, I want to take this man's great advice and putting it into mutual funds, but I don't know the first thing about him. Okay. Well, let's start with the real basic, and if I'm too basic, you can stop me because I don't want to be insulting. But the name actually tells us something, mutual fund.

So if you and I and a bunch of other people mutually put money in something it would be called a mutual fund you see what i'm saying right exactly okay then what you buy with this fund tells you what type of mutual fund it is if you were to buy stock in companies that were primarily growing in the business we call those growth stocks, then it might be a growth stock mutual fund. And you've probably heard of that. I've heard of a lot of this stuff, but I just don't want to get into giving my money away for these people that have to manage it or and that's where i'm i'm crazy because a lot of people are telling me be careful doing mutual fund stuff because there's fees at the end of the year and i'm like well a lot of people a lot of people don't know

what the crap they're talking about you've been reading junk online is what you've been doing i've been listening to people maybe it's wrong there's a lot of whining going on so here's the thing i mean you know you may want to use a good real estate agent if you sold a house and uh but you pay a commission right and so why would you use a real estate agent well a they know a lot more about it so you're probably going to get more for the house the house is probably going to sell faster, and you won't make some big-butt decision mistake when you've got a pro standing over your shoulder that actually knows what they're doing. But you're going to pay them a commission.

And the same is true in the investing world. If you want some good advice, you're going to have someone that gets paid in that world. But that doesn't mean they're a crook because they get paid. All real estate agents aren't crooks and all investment advisors aren't crooks some of them are but certainly nowhere near all of them are and in the mutual fund world the in uh investment advisors are a thousand times more regulated than the real estate business i mean there's so many dadgum laws there they go to jail do not pass go if they screw up.

And so it's just not much shy stirring going on. And there are some fees involved. You do pay some fees. But, you know, if you put in $1,000, you get a 5.75% load. That means commission. That means you paid $57 in fees. And if it goes up 11% that year, that means you netted six that year, and you net everything after that, whatever it makes, every year after that.

You pay commission one time on what you put in. And so $57 for some advice on a $1,000 investment is not bad. $5,700 on a $100,000 investment is not bad. That's not bad at all. So our own $25,000, you know, I pay those loads. Now, I buy some no-load funds as well, some no-commission funds, but those are things that I'm real comfortable buying that I already understand what I'm doing, and I know the fund, like an S&P 500 is an example.

I do some of that. So I buy some no some no loads and some index funds but then i've got lots of mutual funds that outperform the index funds that i have paid a commission on and my local elp our local smart investor pro does that for me and so uh what you want when you've got an investment advisor in your corner, and this is your smell test for you, Patty. You want somebody that has the heart of a teacher, not the heart of a salesman. And so if you sit down with them and you feel slimy when you leave their office, like you want to take a shower, then you've got a salesman.

And you can tell they're all about them. And that should scare you off. But if you've got a teacher, I'll tell you, about 15% of the people in the business are teachers. About 85% of them are sales people. So find the 15% that have that heart of a teacher. They're going to do what I just did. They're going to break it down for you, show you what you're doing. You're going to understand, and you're going to make the decision.

And you're not going to feel any pressure at all because there won't be any pressure. They want to teach you, and only when you understand do you put money in it. Don't put money in something because I said to, and don't put money in something because an advisor said to. Sit down with an advisor, learn, read, grow, learn, read, grow, and then when you understand something, only then do you do your investing. And so that's how we vet the advisors that we endorse, and I'm very proud to endorse them. And they pay me a fee for the endorsement, by the way, so, I mean, there's nothing here

that's wrong. I mean, everybody's happy because everybody's making money in the whole transaction, including the person that's putting the money in is getting good advice. They're learning, and they're growing their wealth, And so, you know, but here's the thing. I very seldom analyze a mutual fund based on its fees. I analyze it based on how it's performed because performance is what makes you the money, not saving on fees. So check it out. Walk it through like that.

And if you want to check out SmartVestors, just click on SmartVestor at DaveRamsey.com. If you don't, it's okay. But if you want to, that's where you do it, and they'll drop down a list, and you can select one or two in the interview. That puts us out of the Dave Ramsey Show, and the books will be back with you before you know it. In the meantime, remember, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus. Hey, it's Kelly, Dave's phone screener. We finished 2017 with a bang as the fourth most downloaded podcast of the year. Thanks to all of you for listening and helping us spread the word.