The Ramsey Show - App - How to Determine Your Return on Investment (Hour 2)

Episode Date: July 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 am Dave Ramsey, your host. Thank you for joining us. It is a free call at 888-825-5225. That's 888-825-5225. Jamie is in St. Louis. Hi, Jamie. How are you? Hi. We are in the middle of our baby step number two. We've paid off about $15,000 so far.

We still have more to go. Okay, you're muffled. I can't understand you. You're going to have to speak directly into your phone, please. Is that better? Yes, ma'am. Thank you. Okay.

We have paid off $15,000 in debt so far. We still have more to go. Good. How long did that take you? We've been working on it since December. Good. So, yeah. But we were really dumb.

Well, I would say we still are dumb. We're still learning. So, I mean, we've still got a lot more to go. But recently, I'm noticing our electric bill is going up and up and up and up. And we're on budget billing, and I never really paid attention to our bill before until just recently whenever it was brought to my attention that we're like $615 behind our budget billing amount. So every six months they evaluate this and, um, Amron told me that, um, that amount is going to go up another a hundred dollars. We're already paying $250, um, a month on our budget billing.

It's going to go up to $350 come November. Um, and it will continue to rise until we're meeting the amount that we're supposed to be paying. So my concern here, I asked Anden what I should do. They told me, according to their energy yardstick, my house is rating a 0.5 on a scale of 0 to 10, 10 being the best. So my house is very not efficient. So they told me the best thing to do would be get a new furnace and AC, new windows, and insulate my attic. Again, we're on baby step number two.

All for $100, huh? All for $100. Yeah, I'm just trying to figure out should I move forward with an AC in front of this or should I just keep paying what I'm paying and doing what I'm doing? I mean, we don't have the money for one, so I don't really know what I should do. Yes, you do. Yeah. You're trying to get out of debt.

Yeah. You can't get out of a hole while you're digging out the bottom. You can't go spend $15,000 to save $100. Okay. Think about it. Yeah. Windows, a new furnace, a new heat and air, and new insulation. It's $20,000.

Yeah. Yeah. We wanted to get goods to see what we're looking at yeah what's your you don't need to i just gave them to you what's your house worth um it's we bought it for 115 um so i won't say it'd be Yeah, okay. Well, how much debt do you have left? How much debt do you have left? I would say at least $20,000 left. $20,000 left, and you've already paid off $15,000 since December?

Yes. So that means by spring you're debt-free, right? Yes, that is the goal. Good. That's where you're headed. That's where you're headed. What's your household income? $84,000. the goal. Good. That's where you're headed. That's where you're headed. What's your household income? 84.

Okay. All right. So what would I do if I were in your shoes? I'd pay my light bill, and I'd get out of debt. Okay. Now, when you're out of debt and you have your emergency fund in place, if you want to do some upgrades on your house, then you look at return on investment. Return on investment means if I spend $1,000 and I make $1 a year back on my electric bill,

that means it takes me 1,000 years to get my money back. Right. If I spend $1,000 and I knock $1,000 a year off my light bill, it takes me one year to get my money back. Do you see what I'm doing? Yes. And so then you would break this down into three categories, windows, heat and air, and insulation. And you would get bids after you have the money to pay cash, and you would look at the bid. And the bid is $26 thousand dollars to do all of this

stuff no break it down how much are the windows going to lower the light bill and get the actual lower the electricity bill get the actual numbers okay most of the things you're describing are probably not going to give you a return on investment while you live in that house you're not going to live there long enough you may not live life long enough to get all the money to give you a return on investment while you live in that house. You're not going to live there long enough. You may not live life long enough to get all the money back. Okay. But you can look at it.

Look at it and go, okay, I can do a heating and air system here for $7,500, and it'll save me $100 a month, so that's 75 months. Okay. And you go, you know, are we going to be here, what, five, six, seven years? Because it takes you that long to break even. Gotcha. You know, how fast am I, if I put this money out, how fast am I going to get it back? Because it's not going to increase the value of your home equal to what you spend. Gotcha.

Nothing. And that was my question. I didn't know. It doesn't, no. I'm like, okay, that makes sense. Because all the homes in your neighborhood have the same heat and air system, the same windows, and the same insulation, unless someone's upgraded them. So if your home is worth $115,000, it's worth $115,000 as it sits.

And then when you start spending this money on it, the question is, is a buyer going to walk up and go, oh, these people spent $28,000 on this energy package, and so we're going to not pay $115,000, we're going to pay $140,000. I don't think so. That's not going to happen. And you can talk to your real estate agent and start doing research on that. But all of that happens when you're ready to pay cash. Today, you don't have the money.

So your light bill is going up $100. Oh, well. Life goes on. And you're still going to get out of debt next spring and you're still going to build your emergency fund and then you're going to look at the analysis and say how quickly do i break even on these purchases what is my return on investment and that's how you look at it and because you know if you're not careful you go oh god the library would have 100 bucks and you just you just go spend 40, 50,000 bucks, 28,000 bucks, 18,000 bucks, whatever, that you'll never get your money back on. Or maybe it has a great return on investment.

You get your money back in 18 months. And if you did, that would be like awesome. But that would be saving your entire light bill plus money they're going to pay you. So that really wouldn't work. That's not going to happen. So anyway, you just got to back it out so that really wouldn't work. That's not going to happen. Anyway, you've just got to back it out and look at what your savings is versus your cost. And it has to be real.

And then you do the analysis. And some insulation packages are worth that. Some window packages are worth that. But today, you don't have the option because you've got to get out of debt. You've got to build your emergency fund. You've got to build your emergency fund. You've got to save up money to pay cash for this.

The stuff you've got is working. Run it through. Thanks for calling in. One of the biggest challenges to getting out of debt is to make the decision to never borrow again. You can't get out of a hole while you dig out the bottom, people. This is the Dave Ramsey Show. Can you believe this real estate market? Home shopping has become so competitive. There's a ton of new buyers in the market, and bidding wars are the new normal.

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You get free samples, free shipping, and with the new promos every month, you will save even more. Use the promo code RAMSY to get the best possible deal. Today's question is from Monica in Minnesota. I have $45,000 in debt plus an additional $3,000 in medical debt. I've been using my HSA to pay off the medical debt. I've already stopped contributing to my 401k, but should I stop contributions to the HSA as well and just cash flow that debt? I would pour as much through the HSA as you can and pay it directly on the medical debt

until it's cleared, and then I would stop my HSA contributions. Every $1,000 that you put into the HSA is pre-tax. So if you take $1,000 of your income and bring it home, it looks suspiciously like $700. And so if you run the $1,000 into the HSA and then pay $1,000 of your medical debt, in a sense, the government has paid $300 of your debt and you paid $700 because it's tax-free

because you ran it through there. So it saves you about 30 cents on every dollar. So, yes, I would run, you know, until I get the medical debt done, I would run that HSA up and then run it right back out onto that medical debt as soon as you run it in there. But pay it through that, run it through that, because it saves you by being pre-tax contribution into that, and then a tax-free use of that is to pay medical bills. Chris is in Utah. Hi, Chris. Welcome to the Dave Ramsey Show.

Hey, Dave. It's an honor to speak with you. You too. How are you doing? Better than I deserve, sir. What's up? Good. So here's where I'm at, Dave.

I'm a recent listener and i i can't tell you man i am amped up and i'm charged up by a truck driver so i listen to audible i've downloaded financial piece of visited total money makeover um my talk my life and using the every dollar budget app this month and it's phenomenal and i'm just pumped up so i'm just trying to get her as on board as I am, maybe. And I'm just thinking I'd ask you any suggestions with your past listeners. I thought about it with you, but I don't know how available it is out here in Utah on Saturdays and Sundays. Those are the days I'm home.

So maybe just some suggestions to kind of get her pumped up with me. Okay. Well, the mistake most guys make when they get amped up about this is they start talking about what we're going to do and she doesn't care what we're going to do until she knows why we're going to do it so don't talk about the what talk about the why if we didn't have any payments what could we do we could build wealth if we didn't have any payments what could we do we could fund the kids college fund if we didn't have any payments we could travel if we didn't have any payments we could be more generous if we didn't have any payments what is the

thing that lights her up that you could do if you weren't broke and that's the thing and so that's your why that's your why you need to dream with her and come up with your why and go, okay, now, then what's the best way to not be broke? Get rid of the debt. Now we have a reason. There you go. If it lights her up and she says, you know, I really am scared that we're not going to be able to send our kids to college,

and you go, well, that's right. I think you're right. I don't think we're going to be able to send our kids to college unless we get out of debt. But, you know, if we didn't have any payments, we could send the kids to college unless we get out of debt but you know if we didn't have any payments we could send the kids to college couldn't we yeah well then let's let's get rid of these debts let's work together because now you got the why in front of the what because a lot of guys just get excited and call her up and go hey honey i'm selling your car which of course goes over like not at all right you know yeah and so you we're we're desperately bad most guys me included are about talking about the what rather than the why.

If you get the why right, everybody else will follow along. That's true when you're leading inside your organization. If you're a leader and you're listening to me out there running a business or running a nonprofit or whatever, it's true when you're in a household. You got to get the why before you do the what and when you get that in the right order you'll be fine and that's what's happened to you by the way you started to believe that this was possible and that's what amped that's what amped you up and before you didn't believe it was possible. And so we have to talk about it is possible, and here's why we're going to do that. That's what I would do.

And, yeah, I would check into Financial Peace University. I'll put you on hold. We'll pay for you to go, you know, to get into Financial Peace. We'll pay for your first year and get you set up. It's a membership, and you go to the class nine times. You go to nine lessons, one-hour lessons with a local group. And, yes, there will be some in Utah. They're all over the place.

There's about 14,000 groups operating right now. And so they're fairly easy to get into. And it's all online as well. And so will you be on the road? If she goes to a class on Wednesday night, you could watch the same class online after you park the truck in the evening and turn around and email or talk back and forth on the phone about it. And, you know, it would be as if you were there, in other words. And so getting that together, getting it on the everyday,

every dollar budget was a great move too, by the way. That was a good direction. So the online works for, you know, people that travel a lot and for the military and that kind of people that travel a lot and for the military and that kind of stuff uh got a lot of military folks one of them's in the sandbox the other one's back home and they're taking the class together because they're doing it all online you have a one-year access to that uh with what i'm going to give you and a one-year access to every dollar plus will upgrade your every dollar to have the bank connectivity too i'm going to give you all that

that comes with your financial Peace University membership now. And join a local group if you can, or at least have her do that at a minimum. But it would be best if you went with her. That's the best thing. If you physically can sit in the group together and take the lessons together, that's the best way to do it. So hold on. I'll have Kelly pick up, and we'll get you signed up for a year membership

for Financial Peace University. Stephanie is in Pittsburgh. Hi, Stephanie. Welcome to the Dave Ramsey Show. Hi. Thank you for taking my call. Sure. I am questioning.

I am on Baby Step number two. I have a lot of student loan debt, a lot, six figures. And I want to know, but it'll be forgiven in 10 years because I'm a teacher. I wouldn't wait 10 years to be out of debt. I know that's a struggle, but that's the challenge. Do I wait 10 years or not? No. Okay, because that was my next question.

What should I do while I'm waiting for 10 years? Because I have $40,000 in the beneficiary IRA. I have about $9,500 in my bank account. I've been saving money because of the EveryDollar app. I've been putting money away. What do you mean beneficiary? What do you mean beneficiary IRA? An inherited IRA?

Yes, yes. They call it, yes. That's a digital life insurance tax way, and so I have that money. Okay. It's taxable, so I would pay the taxes on that and throw it at your student loans immediately. What do you owe on your student loans? I owe about $185,000. To be a teacher?

Yes, yes. Yes. And it's because I didn't, it's my fault, I didn't work. Well, I worked, but I didn't work full-time, and so some of the money was used for spending, like rent, and just daily living costs. Okay. All right.

So you didn't work extra while you were in school. So guess what that means. Now you get to work extra. Yes. Yes. I do have a second job now. I do. I have, like, three jobs, so, yeah.

Good. What is your household income with your three jobs? My household income is about $60,000. What do you teach? I am a special ed teacher. Okay. I would recommend you open up a side business in the special ed community, offering your services to parents who are of means,

who have special needs kids to have you around, and they will pay you very well by the hour, better than any Mickey Mouse part-time job you would get. And let's try to double your income. Okay. Because you have a deep hole and a medium to small shovel right now. Yes. You're not afraid of hard work.

I heard that. I'm proud of you. But you need to make some money. $185,000 in student loan debt, you need to make $100,000 a year. And if you're single and you do $50,000 a year, then it's going to take you four years to get out. Wow.

This is The Dave Ramsey. You know, most of us have gotten behind on our bills at one time or another. That's nothing to be ashamed of. It happens. And many of us know the embarrassment that comes with those harassing calls from collectors. Some of these guys are just scum. But then there are the collectors that are just plain crooks. These are the guys that take it a step further and they violate the Federal Fair Debt Collection Practices Act on a daily basis. They're breaking the law and they

need to be stopped. The truth is debt collection is the most abusive, out of control industry in America today. But you don't have to put up with it. If you have collectors calling you multiple times a day, calling you at work after you've asked them not to, cursing or threatening you in any way, then you need to visit CollectionBully.com. These folks will connect you with an attorney who I know can help you. These attorneys know how to stop collection agencies from bullying and threatening you anymore. CollectionBully.com. Go to CollectionBully.com today. That's CollectionBully.com. In the lobby of Ramsey Solutions, Phil and Vesta are with us.

Hey, guys. How are you? Hi. Good. How are you? Better than I deserve. Welcome, welcome. Last time we saw you, we were at the Rock and Roll Half Marathon, and we ran right by you.

Oh, you ran right by me. Yeah. That was not much of a task. The old man was moving slow. We managed to snap a quick picture of you running. Oh, if you call that running, yeah. You were in the zone. I was trying to survive.

Trying to breathe. Hey, good to have you guys. Thank you. So where do you guys live? Columbia, Missouri. Cool. And how much debt have you two paid off? $58,000 in 14 months.

Wow. Good for you guys. Thank you. Very good. And your range of income during that time? $145,000 to $150,000 in 14 months. Wow. Good for you guys. Thank you. Very good. And your range of income during that time? $145,000 to $150,000. All right. Good for you.

What do you guys do for a living? I'm a software architect. I teach kindergarten. I also teach group fitness classes. Very good. And what kind of debt was this $58,000? It was student loans and a car payment. Okay.

How long have you two been married? Coming up on eight years. Yep, eight years in August. So what happened 14 months ago? Well, so we had just signed a contract to build a new house, and my gut feeling didn't match up with the math very well. So I was thinking we could afford the house we were going into on a 15-year home loan, and started to do the math and figured out we were going to be breaking even every month. Which we shouldn't have been. We were making

plenty of money, so we shouldn't have been breaking even each month. So it was out of fear, basically, that we decided something needed to be done. Absolutely. And so I asked around with a few friends and family members and your name came up and I started listening to your podcasts and I was on fire after that. Okay, cool. So Vesta, he gets a little bit freaked out listening to the podcast. And how did the conversation go with you? Well, he came on very energetic. Imagine that.

Yes. It was kind of like that call you had a few minutes ago. This is what we're going to do. Aren't you excited we're going to do this? And for me, I don't deal with change well. So when he told me this is what we're going to do, I'm like, no, this is not what we're going to do. Aren't you excited? We're going to do this. And for me, I don't deal with change well. So when he told me, this is what we're going to do, I'm like, no, this is not what we're going to do. I like to spend my money how I like to spend my money.

So I don't think this is going to happen. But the more he kind of focused on, well, wouldn't it be great if we could send our son, Augie, he just turned two. Wouldn't it be great if we could pay for his college? We, he just turned two. Wouldn't it be great if we could pay for his college? We could go on all these great vacations. We could give generously. And when he kind of took that approach, I'm like, yeah, that does sound nice. And I think the thing that really turned me around was he kind of looked me in the eye and he said, Vesta, this is so important to me.

One out of ten, this is a ten. This is so important to me. And once I saw, wow, this is really important to him, it became important to me because I out of 10, this is a 10. This is so important to me. And once I saw, wow, this is really important to him, it became important to me because I love him so much. So I'm like, okay, I'm on board if this is what you want to do. And then once he started explaining it more, I'm like, well, this makes sense. So yeah. So did you cancel the contract on the house or did you close it? No, we closed on it. Yeah. And still sucked it up and did this in 14 months? Sure did. Wow.

Very cool. Well, congratulations. Thank you very much. So what do you tell people the key to getting out of debt is? I'd say being on the same page and just really paying attention. Like before we started your program, it was a lot of like, maybe we'll come home with more money this month, or maybe we'll go a little negative money this month, or maybe we'll

go a little negative this month. And just not really knowing where our money was going and paying attention and just having an intentional plan of these dollars are going here and these dollars are going here was really big for us. I loved having the budget, seeing where everything was going in each place. It was kind of freeing. And I didn't feel, when I went and spent a little bit of money, I didn't have to feel guilty about it because, okay, this money's for that and I didn't feel when I went and spent a little bit of money I didn't have to feel guilty about it because okay this money's for that and I bought it Rachel says the budget is permission

to spend yes absolutely yeah and it is it's you know because you know you're not spending your kid's college fund you know you're not blowing up the house by buying this thing so you don't have the guilt associated this sense of dread or regret when you buy something and before the budget I had that sense. Anytime I'd go buy much of anything, especially for myself, I always felt guilty. And so once we had that, well, it's in the budget, so it works. Yeah, it's in the budget. We can actually eat this month.

Yes, exactly. We don't have to feel bad about eating. That's the way it is. I mean, you're going through the checkout at the grocery store, and you don't know if you can pay the light bill. Right. Because you don't have a plan. Right.

But once you've got a plan, you go, go we can buy this and there's no trouble i can buy this this you know this piece of clothing and there's no trouble absolutely whatever it is once you've got a plan well way to go you guys thank you very well how's it feel feels great yeah it feels awesome yeah i uh i feel like i know where my money's going i feel like i can see the future and how bright it's going to be for retirement and uh i'm just really excited about it. It's funny how many people we run into, they're just so surprised when we say we're debt-free. You're only 30. How are you debt-free already? And so once we kind of explained to them the process, and Phil made this really cool app, actually, where it shows all of him explaining it. I call it the Snowball Motivator. But basically, since I'm in software, I do nerdy stuff like that.

And basically, it was something to kind of visualize. If I put in these debts and want to put this much extra on the payments each month, how fast can it pay off? And how many months does that calculate down to? So it was kind of proof for people that were naysayers maybe to, hey, look, this is the math. If you watch it and put this much extra there, it really does pay off. He's a math nerd. I love it. Well done. Good for you guys. Thank you. That is fun. Very,

very good. So you've been married eight years. Have you ever been debt free? No, sir. Wow. Not in your adult life? No. And you're 30 years old. You're paid for everything and a 15-year mortgage on the new house. Yes, sir. And you ran the country music marathon. Yes, we did.

Half marathon. I beat him just putting it out there. She always does. How bad did you beat him? No, not by much. Ten feet? No, it was a few minutes. Oh, you did?

You left him? No. She just turned around and said goodbye. She said, go. Go without me. I mean, like minutes. Two minutes is an eternity. I mean, you just left you.

No. It's like you guys left me. That's the same thing, right? So what was your times? Oh, I don't even remember. I think they were just shy of two hours. It was hour 55. I was way behind you. I ran like a 228.

It was the worst one I've ever run. You finished. It got hot by the end of that. It got hot fast. Yeah, we were just trying to afford it. It was hard. Yeah, it was fun. There was a bunch of us

out there together. There was about 400 of us ran. I looked at every Dave Ramsey shirt. I said, I'm going to find him, Phil. I'm going to find him. I said, there's no way we're going to see him.

There's 30,000 people here. I said, there he is. I said, no way. And I turned and I was like, that's Dave Ramsey. Put it on my phone. Took it quickly. He's that guy puffing over there.

Puffing and puffing. I love it. Well, congratulations, you two. Thank you. We got a copy of Chris Hogan's Retire Inspired book for you. That's the next chapter in your story. Making $150,000 a year. You don't have any

debt except your house. You're going to be millionaires. Thank you. You're well on your way. You're going to be one of our everyday millionaires. I'm proud of you. Well done. Well done. Well done. Phil and Vesta, Columbia, Missouri. $58,000 paid off in 14 months, making $145,000 to $150,000. Count it down.

Let's hear a debt-free scream. Three, two, one. We're debt-free! Yep. That's how you do it. Right there. Well done, well done, well done. Man, oh man. Well done, well done, well done. Man, oh, man.

Good stuff. Open phone's a 888-825-5225. Kathy is on Twitter. Dave, I've been hearing about home title fraud and ads for title insurance. My home's paid for. Is title insurance something I should purchase? No. insurance my home's paid for is title insurance something i should purchase um no not if your home is paid for and you already own it i always purchase title insurance when i'm buying a piece of real estate 100 of the time but that is not because of title fraud. Title insurance is about clean title when the title is given to you. It does not cover

title fraud. Title fraud is when someone poses as you and tries to retitle your home, and that's a form of identity theft. And what you would need there is something like Zander Insurance's ID theft protection, which is what we strongly recommend. And if someone tried to steal your identity and thereby use that stolen identity to steal your home or steal title to your home, then that would apply. Title insurance insures the title that you were given. In other words, when the last six buyers and sellers transacted, was that all done properly? Were all liens released as they should have been, former mortgages and all that kind of stuff? Do you have clean title at the day you buy the home?

That's all title insurance covers. Title insurance does not cover title fraud. So if you're seeing commercials for that, it's a scummy version of identity theft protection, and I wouldn't buy it. But title insurance at the purchase of a home, at the purchase of a piece of real estate, 100% of the time I buy title insurance at the closing table. But not after, and not before. This is the Dave Ramsey Show. Okay, I need you to listen to this, because one normal routine that everyone does can cause total chaos in your life.

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Just search Hotspot Shield on iTunes or Google Play, or go to hotspotshield.com. You can be secure in seconds. Download Hotspot Shield by Anchor Free today. If you haven't heard, Ramsey Solutions is hiring a lot of people. And this place is exploding. Things are going really well. We've been able to create a whole bunch of different ways to help you folks. And a lot of them, of course, are in the digital space and the online space and so forth.

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On the right-hand side, there's a little thing that says Dave's Hiring. Click on that. You can find out the positions that we have available, and that includes the director, a major senior position, director of marketing for our whole business-to-business channel. That's, again, a major executive role. All right, Penny is with us in Lexington, Kentucky. Hi, Penny.

How are you? Hi, Dave. How are you? Better than I deserve. What's up? It's an honor to talk to you, and I just want to are you? Hi, Dave. How are you? Better than I deserve. What's up? It's an honor to talk to you, and I just want to thank you for your online store. We got the bundle, and I started reading Retired and Inspired by Chris Hogan. It's really good, too.

Good. How can I help today? I have a question about inherited IRA. My daddy passed in March, and he left me quite a bit of money for the inherited retirement. And I wanted to know how to approach that and how to roll it over to make it grow. Okay. You can move it around. It's not technically a rollover because you're not going to ever roll it into a traditional or an IRA in your name. It's always going to be an inherited IRA, but you can move an inherited IRA to a different broker

and a different series of mutual funds if you want and still be under the protection of that. It's not that difficult. You select the mutual funds you want it to be in with your broker, and they make the transaction happen for you to move it over into that. If you need some help with that, just click smartvestor at DaveRamsey.com because you're the smart investor. And put in your info. It'll drop down a list of the smart investor pros in your area,

which are the people that we endorse. We're not in the investing business. We're in the education business. And so we'll connect you up with people that actually do it and that have the heart of a teacher. So they'll sit down and explain it to you, and you pick from that list which one you want to work with. But you're going to find them to have the heart of a teacher and give you advice that's consistent with what you hear here on the air.

Terry is with us in St. Louis. Hi, Terry. Welcome to the Dave Ramsey Show. Hi, Dave. Thanks for taking my call. Sure. What's up? My question today is about retirement savings. My husband and I are on baby step seven, and currently we are withholding 20% from our 401k, fully funding the Roth, and at this point we have more funds available to invest, and I'm wondering, do I first max out the 401K, or what's the best option?

Yeah, I'd max out the 401K and max out your Roth IRA options, because we want to put as much away where the government can't get to it as possible. How old are you guys? Okay. 56 and 58, and we are anticipating retirement right now at 62, as long as we're to the point where we feel we want to be to give and live like nobody else. I love it. At this point, we've got $835,000 in retirement funds.

That's in Roth, traditional IRAs, and then 401Ks. Way to go. Your house is paid for, too? Everything is paid for. We've got debt. Yeah. So how much is your house worth? Our house is probably worth about $300,000.

Okay. So you're at least a millionaire, huh? Yeah, we're right there. Very good. Well done. So millionaire, how much Okay. So you're at least a millionaire, huh? Yeah, we're right there. Very good. Well done. So, millionaire, how much of that did you inherit? I don't know. You're breaking up.

I can't hear you. Not a dime. Nothing. Not a dime. So, and you're 56 years old, and you're millionaires, and you started with nothing. What's your household income? $170,000, and that's recently went up. Probably in the last five years, that's went up about $30,000.

Is that the most you all have ever made? That's the most we've ever made, yes. So you never made over $200,000, and you're millionaires, and your house has paid off in your 50s. Well done. Right. Well done. You. Well done. You're a classic everyday millionaire.

Good for you. What do you do for a living? I'm an office manager, and my husband is in sales. He sells lubricants. Okay. Did you steal any of this money? No. No.

I can't say that I did. Well, everybody says that when we get rich that all the rich people are crooks, right? You ever heard all that stuff? Yeah, that's true. Rich people are evil, and I'm talking to you. You just don't sound evil to me. Right, no.

You sound like somebody's worked their butt off and saved money. Right, raised three kids, and they're all grown and gone. So what do you tell them? When you're telling them how to be a millionaire, what do you tell them? You've got to use your head. You've got to work.

You've got to educate yourself. I mean, follow the baby steps. I have three kids that are doing that right now and getting themselves in a good spot. How old are they? 29, 31, and 32. So they'll all be millionaires by the time they're 40. Yeah, I sure hope so. I think they will.

That's what I hope for them. Yeah, I think they will, depending on their incomes and what they do, if they're smart, anyway. Way to go! I love it. It's good to talk to you. Yes, what I would do at Baby Step 7, I just max out everything I can, keep the government's hands off of it. So let's, you know, you can do $6,500 each on your over 50, on your IRAs,

your Roth IRAs, and you can do $1,805 on your 401ks plus the match. And do you both have 401ks? We do. But now I thought we could do the catch-up on the 401k yeah yeah that's true you can do the catch-up on the 401k and on the roth that's true i don't know it may still be maxed at 18.5 i don't know what's the catch-up what are you what are they telling you on that that you can do i was thinking 24 000 is what i was told okay if you can you can, you know, I didn't know that. So, yeah, if you can do that, then load it up.

Load up everything. And especially if it's Roth IRAs. So I definitely would do that. And it's not. That's okay. That's okay. Let's do all you can do. All you can do.

That's the thing. Okay. So once I get the 401k maxed out and the Roth IRA maxed out, then you would invest in mutual funds? Yes. Everything's maxed out, I would invest in mutual funds past that, just good growth stock mutual funds, something with low turnover ratio that doesn't have the taxes due on it because it doesn't sell the stocks inside the mutual fund very often. Thanks for letting me interview you, too, because that's what we do when we're doing the everyday millionaire theme hour with Chris Hogan is we just find regular millionaires and say, how'd you do that?

And you know what? She had exactly the data points of all the things we've learned about millionaires. Now, there's all kinds of millionaires out there. I mean, there's millionaires that make money in the NFL, and there's millionaires that are country music stars, but that's not most of them. The famous people and sports figures are less than 1% of the millionaires. Most of them are office managers and salespeople.

That's what she said, right? They're regular people, and they get their house paid off in about 10 years, and their house continues to go up in value, and they don't fool around with debt. They don't use debt to get wealthy. And they put money in their 401K. A lot of it. Often. Every month. And they of it. Often. Every month.

And they don't have debt. And they put money in their 401k. And you use your head. That's what she said, wasn't it? I mean, common sense. This is how it's done, people. You can do it. This is the Daveave ramsey show hey guys it's blake thompson chief production officer for the dave ramsey show this hour's up

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