The Ramsey Show - App - How to Deal With Financial Infidelity (Hour 1)

Episode Date: October 1, 2019

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

Music Music Live from the headquarters of Ramsey Solutions, broadcasting from the Dollar Car Rental Studios, it's the Dave Ramsey Show, where debt is dumb, cash is king, and the paid-off home mortgage has taken the place of the BMW as the status symbol of choice.

I'm Dave Ramsey, your host. You jump in, we'll talk about your life and your money. It's a free call at 888-825-5225. That's 888-825-5225. Starting off this hour is going to be Nathan in Michigan. Hey, Nathan, welcome to the Dave Ramsey Show. Hey, Dave. It's great to talk to you. How are you? Better than I deserve, sir. What's up? Awesome. Well, I got a question. I'm in baby step two, me and my wife. We have a household income of about $105,000, and we're about $17,500 in debt. I want to be able to quit the job now because I travel for work,

and I'm tired of being away from my wife, and she's tired of being away from me. So I want to start things closer together. But I'm wondering if you would advise that we pile up money before I quit this job and before I find a new job. That way we have more of a cushion to do this. Why don't you just find a new job? Why do you have to quit cold? Why can't you just find a new job? Why do you have to quit cold? Why can't you just find another job and then quit?

That's what most people would do. Yeah. It's a little difficult because I travel for work, so it's hard to get the time interviews right. Yeah, so is being broke because you don't have a job. That's difficult, too. You're right. That's why I plan to have a job lined up before I quit. Yeah, that's being broke because you don't have a job. That's difficult, too. You're right. That's why I plan to have a job lined up before I quit. Yeah, that's what I mean.

Find a job and then quit. Why do you need a cushion? Okay. Just in case, because we're moving as well. We'll be finding another place to rent. You're moving towns? No, we'll be in the same city. Why are you moving in the middle of this job change?

It would be a little bit after the job change. Okay. So towards maybe a month after I have the new job. Is that because of the new job, or you just want a different place? Well, we moved out of our house, and I've got my wife staying with my parents right now. We rented out a portion of their basement. And why did you do that? Because the rent is rather expensive, and it was kind of hard for me to find a place to rent while I'm traveling.

So it was kind of a temporary thing just for the next maybe three months or so, three, four months. Okay, and so you made that move into the basement. The only thing you'd need is first month's rent and a couple of deposits to make the move out of the basement, right? That's correct. Okay. So under no circumstances am I – listen, I get you. I travel a lot, and the best place is home, and I get you. Being home, especially you've got little kids and a wife, I get you.

Let's get a new job, okay? But let's don't just say, well, I really want to be home, so I i'm just going to quit because you're going to be in your basement for a long time if you do that you don't and you don't create a mess so get the other job lined up as difficult as it is it's more it's less difficult than being broke get the other job lined up quit your old job take the new job move into mama's basement save for a month and then and then you've got the money to make your move. But you don't need to worry about that until – because you're not moving until you're going to get a new job is what I heard you say, right? Yes, sir. Okay.

So let's get the job, and then let's save for a month and make the move. They're two separate equations. But this is not a real big i need to stop everything and save up twenty thousand dollars because you're not going to need twenty thousand dollars gotcha you're just going to move into another rental until you get and get settled and get settled into the new job and get your seventeen thousand dollars paid off am i missing something here no you're absolutely right okay cool hey cool. Hey, you can do this, man. But please don't, don't, listen, I know what happens. You get tired emotionally, relationally, physically, the road wears on you.

I mean, just TSA alone is enough to make people just, so, yeah, I mean, just that. Airline service is an oxymoron. You know, it's just, seriously, I get it. But you cannot just leap off a bridge because of that. You've got to hold tight until you land the other thing and then make a gentle step in your career rather than a leap and hope there's water in the pool. That's not a plan, man.

You've got babies and a wife, and you do want to get out of the parents' basement as quickly as possible. I'm with you on that, too. Kristen's with us in California. Hi, Kristen, how are you? Hi, Uncle Dave, I'm doing good. Thank you. What's up?

Well, I am on baby step two. I started in August with $42,000 of student loan debt only. And it's like Newton or Newton's Law or Satan, I don't know, knew that I was about to try to pay off this debt. Because a week before I started my pizza side hustle, I needed some car repair. And it went from, you know, just an oil pan leak to needing a new engine. So it's an older car. It's been doing me good for 10 years. So I replaced the engine. A couple weeks later, it's an older car. It's been doing me good for 10 years, so I replaced the engine.

A couple weeks later, it's needed something else. So I haven't put any money into the student loan. It's been going into my car. I racked up a little bit of debt, credit card debt. I hadn't cut them up yet. So yesterday, the car isn't starting, and so it just seems like time's up for it. My mechanic's happy to take it back and do some more work. Yeah, I think so.

He kind of likes you. I think so, too. Go from an oil pan to a new engine? I think this mechanic's in love. I don't even want to give up on it yet. It could be a couple hundred bucks away from fixing it. But I'm driving an 07 Honda with a new engine and new rotors and some other things, but it's still making noise. So I took the day off today to look for a car.

Everyone I speak to, even my financial peace buddy, is encouraging me to go a little higher than a 2.3 Gantt Beater. Do you have the money? I wanted to know. You know, beater. Do you have the money? I wanted to know. You know, I just deposited some money. I'll probably have about a grand by the end of the week. Pass the value of your current car. You have $1,000 plus your car, right?

Right. Is someone encouraging you to go past that? Yes, everyone. Well, this isn't a financial peace buddy. This is an imposter. A financial peace buddy would not encourage you to get a car payment. By definition. That's the definition of a financial peace buddy. No car payment.

That's right. I didn't know what a financial peace buddy was until a minute ago, but now I do. So, yeah, there's no situation in which the words financial peace and car payment should be in the same sentence. Okay. So you buy a car with whatever cash you got in your beater, and that's cool. I'd move up in that. Okay.

And I might look for a new mechanic. I really might. I'm joking around about him, but I'm suspicious. Okay. Because every time you see this guy, he likes you. And that just, I'd rather him run you off or vice versa. So, you know, move up in car a little bit if you want. But, you know, you're paying cash for it.

And then here we go again. Listen, until you get this mess cleaned up and you move up about $10,000 car you're still gonna limp with car when we drive a three thousand dollar four thousand dollar car it just limps that's just part of the deal i've done it part of my life most people listening have done it part of their life it's not fun uh but you're just getting started and it's like it's like god is saying this is a test don't flunk the test and you need a new financial peace buddy too or we need to give them a new name, one of the two. This is the Dave Ramsey Show. You know, I get asked all the time, at what age should I buy life insurance?

Let me be clear. If you have a family, if there are people depending on your income, now is the time to have term life insurance. I don't care if you're 20, 30, 40, 50, or whatever. Your age is less important than your financial situation. If you have debt and a lack of savings, it makes no sense to risk your family's financial well-being based on the cost of a term life policy. Term life rates are just plain cheap, even if you're not in perfect health. And the best way to compare those rates is through Zander Insurance. Zander only sells the plans I recommend and shops among the top companies to find the best rates and the right coverage for you.

Call 800-356-4282 or visit Zander.com. You got no excuse to put this off, folks. Bad things happen to people all the time, regardless of age, and it's your responsibility to deal with this. That's Zander.com or 800-356-4282. Daniel is with us in New Hampshire. Hi, Daniel. How are you? Oops. Got to push the button, Dave.

Try again. Daniel, how are you? Not bad. How are you, Dave? Better than I deserve. How can I help? So I guess to make a long story short, a while back, I've been listening to you for the better part of a year now, and I heard everything, and it made sense to me, and I wanted to jump right in.

I brought it up with my wife, and she immediately shut it down, had zero interest in participating. We went back and forth for a while, and we appear to see very differently on how to use money. We can't really agree on finances at all. Fast forward to last week, she asked me if we could buy something for the house, and I said, well, I don't have the money for it right now, I don't have the money for it right now. We don't have the money for it right now. And she said, well, I have $12,000 in a savings account that you didn't know about. Can we use that money? And I'm not really sure how to deal with that situation of her hiding that amount of money from me.

Well, I can tell you that most people would think that that was under the level of deception. In most marriages, I would. I would have a serious problem of integrity breach if my wife were to do that. And I think most people view it that way. And so you're probably having a little of those feelings. When a spouse hides debt or a spouse hides savings, in our world, depending on how extreme it is and how long it's gone on and those kinds of things, a lot of people in our world call that financial infidelity because it's a breach of trust and it feels almost like infidelity. And so, you know, you're probably having at least some of those feelings, aren't you? Yes.

Yeah. So the thing is this. Money problems are never the problem. They're always the symptom of something that's going on, including if I'm just a single person, I'm having money problems. What's causing the money problem? Because the money problem is usually revealing something else that's going on and so what's this revealing in your all's relationship that's what i would really be digging on rather than the actual tactical fact that there's twelve thousand dollars over there is she planning her escape is uh are you controlling

to the point that she thinks she can't breathe um Is there a breach of trust in the past that's never been healed between you all? Is she having an affair? I don't know. Who needs to hide $12,000 from their husband? You need to find out why, right? There's some reason that someone would do something that's that dysfunctional, because it's dysfunctional. And, you know, it may reveal something about you you don't like that you've been a twerp and overbearing control freak or something you know i'm not saying that

i'm just saying these are the types of things that could enter into that does that make sense to you yeah and so uh i would treat this uh like she was having an emotional affair with her personal trainer. Maybe they hadn't slept together, but this is a major breach of trust. And so we need to be in the marriage counselor's office to survive and to cause our marriage relationship to prosper. Because something's broken here that the two of you haven't been dealing with probably for some time. Good. You think I'm overstating that? No, I think that sounds correct.

We've been fighting about it a lot recently. A lot of other things, too? Yeah, pretty much everything. Yeah, okay. How long have you been married? A little over a year. Oh, okay. All right. What's the nature of most of your fights uh a lot of money uh and a lot of um she feels like i don't do enough around the house okay i would say the main two yeah so if you were just going to have

a two-minute conversation which is all we've had, not enough to really find out what the flip's going on, but if you just tell me those things with that pieces of information, this $12,000 is security for her because she feels very insecure in this situation. She's not sure this is going to last. So it's an escape pod. That's what it is. And then you got in a real heated argument, and she's really trying to force her will on the situation,

which is this item she wants to buy. And so she probably revealed something she never had any intention of revealing in the heat of the moment. So, I mean, I talked with my pastor probably a week and a half ago about all this. And he said, look, you need to, you need to keep your cool, stay calm, show that you care, show that you're not trying to be a jerk. You're not trying to be mean. You're trying to make things better and let things cool off before we're going to be able to fix anything, which is what I've been doing. If things have cooled off,

we've been way more civil with each other the past week. So now I don't know how to approach this one specific thing without undoing, you know, I mean, it's only a week. I wouldn't approach the one thing. Ask your pastor what he thinks. But my guess is if I were in your shoes, what I would probably end up doing is just saying, hey, look, this money thing is one thing. This hidden account is another thing. All our other disagreements are another thing. I mean, we have to both agree this has not been a dreamland marriage in the past 12 months.

And I'd like to go to the pastor and the two of us sit down and start putting some tools in our belt that neither one of us have for doing better for each other. I know I can certainly be a better husband, and I want to go sit down and begin some marriage counseling to do that on the overall thing rather than I'm going to drag you before the pastor and have you slaughtered for this $12,000 account. That line won't work. The other one might work uh but yeah i mean really because you just you guys need some help and she probably is in agreement on that but if she thinks she's being drug in to be shamed for this one event this one thing she's not gonna go and she's not gonna want to participate i wouldn't go in on the singular issue i would just say the singular issue is what caused me to realize that the overall thing is really getting bad and you know it's probably part my fault probably part your fault uh you may may not think that but i really do know we need some help because this is beyond our ability to fix by ourselves so let's

begin some good detailed marriage counseling um let's let's start meeting with the pastor and talk to pastor see if he thinks that's right but i would sell the the marriage counseling, let's start meeting with the pastor and talk to the pastor and see if he thinks that's right. But I would sell the marriage counseling as an overall thing because you do need it bad. Yeah. Hey, man, I'm sorry. Sorry you're facing this. I'm just a regular guy.

I'm not a therapist or a counselor or anything like that, but I've been through a lot of what you've been through. And Sharon and I tried to kill each other when we went broke, so I've got experience with that. And I've been a jerk more than once in 38 years of marriage, I can promise you that. Sharon says out of 38 years of marriage, we've had 25 good years. That's probably a little too real for radio, but there it is. Open phones at 888-825-5225 Open phones at 888-825-5225.

That's 888-825-5225. Well, the Borrowed Future podcast has launched. It is huge. The response is absolutely amazing. If you don't know what this is, it is an eight-episode podcast that we launched on Monday, and it is all about the student loan crisis. $1.6 trillion in student loan debt, what to do to keep from becoming one of the statistics, what to do if you are one of the statistics, and all the behind-the-scenes stuff.

Now, this is not a typical Ramsey Network podcast where it's a personality. One of us that's just barking and chasing our tail in circles and doing all the little tricks we do for you. That's our normal podcast, right? Like you listen to this podcast as an example. It's me yakking, right? That's not what this one is. This one has like 25 or 30 different guests in the first episode. Experts from all outside the industry, inside the industry, whistleblowers on the industry,

students, parents, experts, and Ramsey personalities are in there. But Borrowed Future. Borrowed Future. It exposes the broken system that is the federal student loan program. It should be stopped, and we're going to make the case for that, but we're also going to make the case on how to help you. Subscribe and listen to Borrowed Future wherever you listen to great podcasts. More information at BorrowedFuture.com.

This is the Dave Ramsey Solutions, Michael and Stephanie are with us. Hey, guys, how are you? Good, Dave. How are you? Hi, Dave. Welcome, welcome. Where do you all live? Cincinnati, Ohio. Cool. Well, welcome to Nashville. Thank you.

And all the way down here to do a debt-free scream on the debt-free stage at the Ramsey Solutions headquarters. Yes, sir. You betcha. Wow. How much do you pay off? $191,428.15. Woo-hoo! How long did this take? 32 months.

Whoa! And your range of income during that time? $124,000 all the way up to $153,000. Very cool. What do you guys do for a living? I'm a safety director for a transportation and logistics company. And I'm an outside sales rep for a nutrition company. Very good.

Very good. And what kind of debt was the $191,000? It was probably around $5,000 in credit cards and then all of the rest was student loans. Whoa. Yeah. Whoa. No doctors or lawyers either. No doctors or lawyers.

No. So what are your degrees in? I have a bachelor's in kinesiology. I have a bachelor's in communication and also a grad degree in sports administration that I'm obviously not using, unfortunately. Okay. No problems there. I don't care. The whole thing is, so what, private schools maybe? Yeah. Okay. All right. Cool. Very good. I did a lot of stupid with those student loans. I know I purchased a triathlon bike with mine. It was not a school expense, so we learned the hard way. Oh, you were in kinesiology, though.

Bikes move. Yeah, exactly. It's all about movement, right? Yeah. The stuff we rationalized. Oh, my gosh. Good for you guys. So how long have you been out of school?

Oh, geez. Well, for 10 years. I'm 15 years. So what happened two and a half years ago that got you guys, three years ago, got you guys on fire? Well, it was Michael's birthday, November 9th, 2016. It was also Election Day. And as a sales rep, I'm out driving a lot. And I remember tuning into AM radio trying to find updates on the election.

And I came across your channel and you said, if you're looking for election updates, this is not the place for you. And I was like, if he couldn't be talking about the election, what could be more important than that? So it really intrigued me and I kept listening. And the very next story was a woman sharing how she was in a massive amount of student loan debt. And I just remember thinking, this is what we need to do. And it actually took me back to a conversation that Michael and I had early on when we were dating. And we knew we wanted to have open communication. We definitely saw a future for us getting married, having kids. And I remember him

saying, you know, I just don't see how we can own a home of our own. We have too much student loan debt to, um, to be able to afford a house of our own. So to me, this was the perfect solution to bring to him. And I got home that night and shared the episode on the podcast, and we bought total money makeover that night. We both listened to it within two days and cut up our credit cards and never looked back. Wow. Game on. Game on. Hair on fire.

When the student is ready, the teacher will appear, huh? Yes. Wow. It made so much sense, and everything just clicked. After listening to that book, and in no uncertain terms are you yelling at us, basically, in the audio book. It's tough love. The audio book is not recorded in volume. It is yelling.

There is no cuss words in it. It is true. It just felt like we had a chance to clean this up. It felt like you were taken to the woodshed. Exactly. And then we just never looked back. The first part of our plan was like we could do this in four years, and that seemed like forever. But not long after that, I got a promotion, and we got some raises along the way.

Isn't it funny how that happens? It just all kind of clicks. Once you have something smart to do with it, it starts happening. Exactly. So what do you tell people the key to getting out of debt is? This is pretty impressive numbers you all did. Definitely having a budget. And I will share, I thought I was the nerd in the beginning.

And I showed him my little puny Excel sheet that I had. It's before we got every dollar. And I showed it to him. And then I saw an Excel sheet on steroids that projected out the next four years of our life based on past bonuses, past paychecks. And once we realized we could do it in 36 months or less, we just knew it was something we had to stay focused on. Yeah. And so then the raises and everything dropped it down to 32 months. It always goes faster than your first projection. Yes. It always does. Gladly, because that seemed like it was so far off in the future. It is. It takes a while.

It does. Two and a half years, almost three years is a long time. It is. I mean, you guys have been grinding. That's real. We've been very fortunate to have good support from our family and friends. Obviously, those are big cheerleaders. Who are your biggest cheerleaders? Family and friends, for sure.

They thought we were a little crazy in the beginning until, you know, the first couple months wore off. And then after a year, we were still very intentional and focused. And they knew this plan wasn't going anywhere. We were going to see it through to the end. So how old are you guys? 31. 35. All right.

So because there's all the data and the surveys going around that, you know, people your age are not wanting to buy homes. Like you said, they're not wanting, not thinking they can. And not wanting to start a family and those kinds of things delaying all because of the student loan debt yeah and uh but you you found the antidote which was you right you're the you're the solution and a good teammate yeah that's that's for me the key was those conversations we had early on while we were still dating before we were engaged and married um on how we were going to actually make a life together. She's worth spending my life with,

and I wanted to make sure that we were going to be happy and successful together. So that's the key for me is having a partner who is sharing that same vision of what we're going to do with our money and how we're going to be. Do you remember back there 33 months ago, 34 months ago, when you pull that audio book out or you're listening to that particular episode of the podcast do you remember what happened in your brain that moment was there a particular moment when you went you know what you go from hopeless to hope there's a moment where you go i think we can do i think that's not just that girl i think

we can do it you remember that i do i don't remember exactly what that was, but I remember the feeling of that hope just kind of wash over you. Like, this all makes sense. I was mad at first. Like, why didn't I know this? This all seems so common sense. And now, and then just when that clicked, it all changed for us. And that's when we got really intentional with it. And that's when we started the budget.

And it just snowballed from there. I think for me it was hearing other people's experiences and their stories through the podcast and hearing people say they had X amount of student loan debt. And I remember one specific episode this woman called in. She's like, oh, we have $170,000 in student loan debt. And that's one specific episode, this woman called in, she's like, oh, we have $170,000 in student loan debt. And that's before we had our conversation. I was like, that is so much. And then I realized we got home and started talking about it. That was the same amount that we had. And it felt so defeating. But once we wrote that budget out, we were more

empowered and we felt like we had a choice in this. I think in my mind, there's a lot of times, at least two things that happen, and they happen in stages. Stage one is you hear someone else doing it, and you think, well, maybe. Maybe. Man, I sure wish. That'd be cool. And then when you write out your plan, and you do the spreadsheet on steroids,

or you do every dollar, and you lay out the full debt snowball, then you start looking at the actual math. And the actual math says if I behave, if i cut i can do this and i and so it's kind of two stages of hope i think that happen at least maybe more and probably probably another one as you get a part of the way through and you're starting to get some momentum and you're going whoa this i think this yeah yeah this is gonna work yeah that's exactly what happened it was really hard seeing my bonus checks come in twice a year and writing a payment to our student loans for that exact amount. It was really hard, but we knew we were making the right choice.

Yeah, absolutely. It's all worth it. How's it feel now? It's more real today. It's sinking in today. I think that's what we talked about. It's sunk in today because when we first listened to the book and the podcast, we're like, we're going to do the show.

We've got to come to Nashville and do the show. And to be here today, it's almost surreal. But, you know, when we do the Scream, I think that's when it's really going to set in and sink in. When did you send the last payment? End of June. I think it was June 27th. Okay. All right.

So you've already lived a month without it or two. Yes. But then this makes it real being here. Yes, it does. Absolutely. Very cool. Very proud of you guys. Thank you. Congratulations. Yes, it does. Absolutely. Very cool. Very proud of you guys. Thank you.

Congratulations. You're a sharp young couple. Thank you. You've got a bright future ahead of you. We've got a copy of Chris Hogan's book, Everyday Millionaires. You're going to be wanting about 20 minutes the way you're going. That's the next chapter, for sure, in your story. So very, very well done.

Michael and Stephanie, Cincinnati, Ohio, $191,000 paid off in 32 months. Little Zoe joins the picture. $124,000 to $153,000 income. Count it down. Let's hear a debt-free scream. Ready? Three, two, one. We're debt-free! I love it

that's how it's done right there it's your turn this is the Dave Ramsey Show Thank you. Tony is with us in Idaho. Hi, Tony. Welcome to the Dave Ramsey Show. Hey, Dave. Thanks for the line. Sure.

Hey, my question is around the only debt my wife and I have is two homes, our primary residence and a vacation home in the mountains. And I just want to know how you look at those debts. Do you look at them the same way we pay other things off, the smallest first and then knock out the biggest second? But my biggest quandary is I know we're not going to be keeping our primary residence. We are going to be keeping our vacation home. And I owe less on it, and it's actually worth more. So we're thinking that's the right direction to go pay that off first and then when our son's out of college we're going to sell our

primary residence and downsize so how do you look at that and am i looking at it the correct way um unless that's going to happen in 20 minutes it doesn't really matter it sounds like that's several years off right yeah we're we're eight yearyear plan. Yeah, okay. So both other pieces of real estate fall in what we call baby step six. So you should be debt-free except those. You said that. You've got your emergency fund. You're saving 15% of your income. You're covering college. That's baby steps four, five, six is pay off the house or pay off the real estate. Now, so when we come to those, which one do we pay off first? Generally, I pay off my personal residence first, all things being equal, meaning that the thing. But if you've got a tiny little debt over on the vacation home and a big debt on the personal home,

I might reach over and knock the little one off just for the satisfaction of it, right? So how much is owed on your home, personal residence? I just double-checked the numbers. I owe $272 on000 on my primary residence. And the vacation? $227,000. So it's about the same. And your household income?

Yeah. We averaged about $265,000 for the last three years. Okay. So $500,000 out of $265,000, give or take, to pay them both off, right? Right. So what are you thinking how many years um well i met with one of your smart investor pros and uh the plan we came up with was eight years uh pumping an extra thousand into our vacation home and it would be paid off why so you make 265 000 why does it

take eight years to pay off 500 000 100 000 a year for five years and you still got265,000. Why does it take eight years to pay off $500,000? $100,000 a year for five years, and you've still got $165,000 to live on. Yeah, that's true. And that's where I want to get your perspective, because I looked at, do I really want to put money into this house when I could be putting it into? Well, you're not. When you put money onto your personal residence, you're not losing it you're not consuming it when you sell it you get the money back all we're doing is reducing the area we should just yeah i

would just treat it we should just double up yeah just pay it off i mean because when you pay it off let's say they're all paid off in five years and the kid gets out of school in eight years and you sell the residence at that point uh You downsize to whatever you want to move. You pay cash for that, obviously. That's easy to do. And you're going to have some money left over to do some other investing then. Sure. But it all just comes back out of your personal residence.

And if your plans change, you've got that option because everything's paid for. But you should not be – here's the thing. Baby step four is 15% of your income going into retirement. You shouldn't be investing anything else until your real estate's all paid for. Paid for. And so something's got to – you're either going to consume the rest of this $265,000 or you're going to use it to pay off these properties. And so I would consume some of it.

I'd have a good life. I mean, you make great money. Sure. And so I want you to have some fun with that and do some giving with that but i mean 100 grand you probably can do that really and if you just watch what you're doing and not put a big strain on your lifestyle or something and you'd be done in five years with both of them that'd be a real cool place to be in five years and you got three more years to till the kids out of college and then you're going okay now what do we want to do whatever the flip we want to do because we have a million dollars

worth of properties alone paid for not to mention the other uh nest egg that you built you probably net worth up over two million dollars in eight years maybe more i don't know what you got in the 401k now already so you know that's you're gonna be in great shape you just done a really really good job it's really more just kind of a discussion of, you know, fun stuff. But, you know, don't look at paying off your personal residence as the money is gone, like you've consumed it or something. You haven't because it comes back. It just becomes equity.

It's just a forced savings plan is all it is. All right. Diane is with us in D.C. Hi, Diane. How are you? Better than I deserve. How are you? Better than I deserve. What's you? Better than I deserve.

What's up? Thank you for taking my call. I was wondering if you could explain to me what a wraparound annuity is and whether you would advise having one. Well, they come under several different versions of wolf in sheep's clothing. What were you explained on this particular one? I think part of it is I just sort of shut down while they were explaining it to me because I'm sort of naturally suspicious. And when I heard the word annuity, it just sort of caused me to shut down.

But they said it was a way to have investment funds with very low fees and that there would be a five-year commitment or else there would be penalties if I withdrew it. And I would be moving two 403Bs into that wraparound fund for about $100,000. I'll pass. Let me tell you why. Annuity, your 403Bs are already tax-deferred. They're already sheltered. And the only reason to buy an annuity is to3bs are already tax deferred they're already sheltered okay and the only

reason to buy an annuity is to create a shelter uh meaning annuities you can you can grow tax deferred money inside of annuity like you're doing a 403b or 401k it's tax deferred growth but when you've already got something that's tax deferred and then you pay an annuity fee also to create tax deferral that's already there it's redundant right and so you can you this money's already sheltered you can roll it to a 40 i mean you roll it to an ira on a direct transfer rollover and not have to pay an annuity fee to keep it sheltered and it's completely liquid in the sense that you don't have to wait five years to get your money or anything else and so, this is a dipsy doodle they're doing to try to tie it up. Probably, I mean, typically an annuity,

the wraparound is going to fall under the heading of the variable annuity class. And a variable annuity is simply a mutual fund inside of an annuity. And they've got some extra fees. They're not that bad. They're not super bad. But it's just not. I'm 59. I don't have a dime in any of that. I've got it all in retirement, and I've got it extra fees. They're not that bad. They're not super bad, but it's just not. I'm 59. I don't have a dime in any of that.

I've got it all in retirement, and I've got it all in mutual funds, and I've got it all in real estate I paid cash for in the open market. And I've got plenty of tax-deferred growth and plenty of good feelings about the historic value of the stock market and what it's going to do and what it has done. So I think you probably need a new – here's an idea. Let's do this. Number one, you never invest in something you don't understand, even if I told you to do it.

Okay? And you shut down when you heard the word annuity and you didn't understand it, so you walked away. Very wise. Very wise. Number two, you smelled a rat because there was a rodent in the room. Okay? That's why you smelled a rat because there was a rodent in the room. Okay? That's why you smelled a rat.

And so then number three, that tells me that I'm going to talk to someone else and get another opinion and start learning more about, you know, what it is that you were saying you wanted that activated them to try to sell you this because this is a high-commission item that they're trying to sell you. So just check with one of the SmartV smart investor pros and sit down with them click smart investor at dave ramsey.com and with the heart of a teacher have them sit down maybe they can walk you through what it is you're trying to do and how to get there but don't put money in something if they say to until you understand it but um i I only use annuities, rare circumstances for rare people, and they're not super bad, all of them,

but there's plenty of them that have extra high fees and plenty of reasons to stay away for the word to curl your hair, the word annuity when you hear it. So there's lots of other things you need to be doing with money long before you get to something like that. Hey, thanks for the call. Monique is with us. Monique is in New York. Hi, Monique. Oops, wait a minute. You're going to be on in another hour because I just looked up and saw what time it was. You'd think I know how to talk radio after 30 years, but oh, well. Anyway, thanks for being with us. Open phones at 888-825-5225. Jenna is on Twitter.

Dave, what are your thoughts on online banks? Are they safe as a neighborhood bank? Well, if they're FDIC guaranteed, they are. And, you know, what I would want to do is check out the track record on the bank, how long it's been open, what the size of the deposits are, if it's not a name brand that you recognize. But today versus 10 years ago, online banking doesn't scare me at all. Almost everyone does their banking online now.

Very few people go in a branch anymore of a bank. I mean, those of us that are dinosaurs, some of us do, but most people do their stuff online anyway. So as long as the bank is a valid reputation and sufficient deposits to have some strength and it's FDIC guaranteed, I wouldn't think anything about it. This is The Dave Ramsey Show. This is James Childs, producer of The Dave Ramsey Show. Once again, you made The Dave Ramsey Show one of the top five most downloaded podcasts last year.

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