The Ramsey Show - App - How to Diversify Your Investments (And What that Even Means) (Hour 2)

Episode Date: June 28, 2019

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Live from the headquarters of Ramsey Solutions, broadcasting from the Dollar Car Rental Studio, this is The Dave Ramsey Show, where America hangs out to have a conversation about your life and your money. Filling in for Dave, I'm Chris Hogan, and I'm excited to be with you today and excited to take your questions. But guess what? I need to hear from you. So give us a call. That number to call is 888-825-5225. Again, that's 888-825-5225. Or you can hunt us down on social at Ramsey Show. You can also find me on social at ChrisHogan360.

But again, I want to hear from you. Because what I'm finding is when people get the right information, they get more confident in what they're doing, and then they can move forward. I got a question in on social. Michelle from Facebook asked me, she goes, Chris, what are other options for my husband for life insurance? He has high blood pressure and recently had a stroke. Is he just out of luck when it comes to life insurance? I don't know what to do.

Michelle, I'm sorry to hear about your husband's health issue, but there are things that you can do to be able to help yourself. First and foremost, you want to make sure that you're collecting the information and understanding why he was declined clearly. Now, you mentioned he'd had a stroke and high blood pressure, but you want to get that in writing and be able to document it. And then you really want to make sure that you're getting connected with an insurance professional. Our insurance ELPs will have options for you to be able to help guide you to find out what you can do. There are some companies out there that will do life insurance for people that are higher risk or have had a pre-existing condition or situation. And it's just not commonly known. So in this scenario, you want to deal with a professional. So go to my website, ChrisHogan360.com, click on the Dream Team button, and you can find an insurance professional, an ELP, an endorsed local provider in your area, or you can go to

DaveRamsey.com and find one as well. The main thing is don't be discouraged. You still want to continue to take action and be able to walk through that. Now, the insurance ELP will have some people that you can talk to that can guide you and help you. But outside of that, let's say that they can't find anyone. Then what do you do? Well, this is where you begin to buff up your savings yourself. That emergency fund might have to look a little bit different moving forward. But I want you to have a conversation so you can know where to go, where to turn, and what

you can do. All right, America, I'm jumping on the phones. I've got Drew in Jacksonville, Florida. Drew, how are you? I'm well. How are you doing? Oh, my friend, I'm focused and not finished. How can I help you today?

So I have a quick question. Okay. I became debt-free in January. Great job. Thank you very much. And I just finished my emergency fund today. So now I'm looking towards retirement and saving for down payment on a house and whatnot. My question to you is, I've met with a smart investor pro, and they told me that 15% for retirement could be flexible depending on different goals and whatnot. The company I work for does a 3% match,

and I'm wondering what would be the minimum I should put away for retirement for that 3% plus a little bit more. I also want to save up for a down payment on a house. And I think if I stay aggressive for the way I have been with the snowball and emergency fund, I can have a solid 20% down payment in about 24 months or less. Okay, good, good. Drew, tell me this. What's your income?

$55,000. $55,000. And how much debt did you pay off? I paid off about $23,000. $55,000. And how much debt did you pay off? I paid off about $23,000. Wow. What was that? It was all student loans. So mainly student loans, a little bit of credit card, and I paid off a car as well.

I am proud of you, my friend. How old are you? 26. 26 years old. Okay, where did you learn about this money stuff um you know i i came across on youtube and um yeah i've been watching the show ever since for about you know eight or nine months now wow so you just got serious i mean you heard the information then you went and did it uh i'm very impressed. Well, I would tell you this,

you know, mindset wise, you're doing it the right way because you're attacking debt. When you know, Drew, when you get out of debt, you give yourself a raise. So what I would do is this. You're asking me, how much do you need to be investing? I'm going to answer you. You ready? 15%. Like, it doesn't matter what your match is. Okay, I don't want you to even ignore that because a couple reasons. Companies can change their matching rules. They can change all the way around. And so if you're in the habit of investing 15%, then you're going to be more than okay. And here's the thing.

I've had people try to split hairs with me, and they try to argue with Dave about this. And here's the thing. I've never had anybody that got to retirement and called us, right, and said, Dave and Chris, I got too much money. I'm mad. Right. Never happens. So getting yourself in that habit with your income and what you're doing, you're still going to be able to have the 20 percent down payment. I think you're going to have that before 24 months. It's just how you're wired because you are focused and not finished as well, and you're

very goal-oriented. So do the 15%. Be focused. Be intentional. But just make sure that you play defense, Drew. That means as you get out of debt, you want to be allergic to it. We don't want to go backwards. We're not going to let a boat or a motorcycle or anything else cause us to go backwards. Anything we do,

we're going to do with cash, right? And it's slower, but I'm going to tell you, it feels better. It just does. It feels better. It tastes better. It's better all the way around. So you continue to stay focused. I'm very, very proud of you and what you're doing. It's not going to be an accident when you become an everyday millionaire. Thank you for your call, my friend. I've got Joy in Colorado Springs, Colorado. Joy, how are you? I'm good. How are you? Oh, I'm focused and not finished. What's on your mind today? So I recently started a baby step and I was trying to figure out where in the baby steps should I start my business. I was wanting to do another source of income, Etsy shop, but I'm not sure where or when I should do that.

Okay. Tell me this, Joy. What baby step are you on right now? Are you just brand new on baby step one? Yes. Oh, okay. Fantastic. How'd you hear about us?

I was just Googling some financial stuff on YouTube and came across Dave Ramsey and started listening and was just blown away. Wow. Did Dave's name show up before mine? Yes. Of course it did. This man has been in the game a while. That's fantastic. Well, what caused you to search for financial information?

Well, it just came to a head where it was just overwhelming with the debt and our spending habits. And so I was just looking for a better way to just do our finances. Absolutely. And that's when I came across it. I like that. I like that. Looking for a better way. So tell me this.

Tell me about the debt. What are you facing right now? Well, I have about, my husband's a veteran, so he has no student loan debt. He has like two medical bills that are about $2,500. I have about $28,000 in student loans. Okay. I have about a thousand in credit cards and then just about eleven thousand on our car now. And then just other collections that equal to about two to three thousand. OK. All right, Joy, I want you to hang on the line.

We come back to this break. We're going to dig into this situation. Joy wants to know when she can start a business. I got some debt. I got student loans, credit cards, car loans. What do you do? What do you do? How do you fix this?

How do you begin to work a plan? I'm going to show her when we come back. This is The Dave Ramsey Show. Are high health care costs getting you down? Are you confused trying to navigate your options? Do you wish you could find an affordable, biblical solution to your health care costs? Based on New Testament principles, Christian Health Care Ministries, or CHM, helps Christian families, churches, and ministries join together as the body of Christ to share their major health care costs. Christian Health Care Ministries is the original health cost-sharing ministry. A Better Business Bureau-accredited organization, CHM members share to pay each other's medical bills.

It's not insurance. It's Christians financially and spiritually supporting each other. It's what Christian Healthcare Ministries has done for over 35 years. And our members have shared over $2.5 billion in medical bills. To learn more, visit chministries.org. That's chministries.org. Christian Healthcare Ministries is a proud sponsor of Dave Ramsey Live Events. chministries.org. Hello, America. You are listening to The Dave Ramsey Show. Prior to the break, I was talking to Joy.

And Joy is telling me that she wants to start a business, but her and her husband are relatively new to the baby steps. They have $28,000 in student loan, a couple of medical debts, $11,000 in credit cards, and $11,000 on the car. Is that correct, Joy? Yes. Okay. And tell me this.

What's your all's household income? My husband makes about $45 a year. Okay. And do you work inside the home or outside the home? I am a stay-at-home mom. Okay. And so how many kids do you guys have? We have three.

Oh, wow. What are their ages? Four, two, and have three. Oh, wow. What are their ages? Four, two, and two months. Oh, wow. You are busy. Yeah. Have you heard of this thing called sleep? Nope.

No, you haven't. No, no. Not with those kids running around. And so you're thinking about starting a business. Let me ask you this. How much time are you looking to devote to this business in a given week? As much of my time as I can. I would probably say about anywhere between 30 to 40 hours. Okay. Wow. You're going pretty serious. And then this is the big question. Why? Why are you looking to start a business? I've always wanted to start my own business. Just was trying to find exactly what to do.

And as I was, I think, listening to the show yesterday, I was starting to get some ideas on what I could do, and I found one. Okay. Very good. And so the income you, let's say you start this business, this income is coming in, where are you going to direct it toward? To paying off all of my debt. Okay.'s good now hold on i gotta throw the flag on this because you just said a pronoun that we gotta fix you said my debt are you married yes okay so

there's another pronoun i need to teach you it's our our debt i heard you say that earlier and i was like i'm gonna give her one more chance and I'm going to jump on it because you were talking about the medical bills. Listen, just use that pronoun. You guys are doing this together. What I would say is this joy. I would write down your ideas. I think the main thing is to capture it and I want you to write down the idea and look

at it because we've got to be realistic and start to understand what's this going to cost, right? Too many people will try to get things and make it all nice and neat before they get started and they overthink it, right? Like I don't need a website to do a business. I don't need business cards to do a business. You know, I think people overthink it. So I think you sit down, talk, think about what your idea is. and then from there, what's it going to cost to start it? Like I kind of took you down that trail because I wanted you to think about how much time are you going to have devoted to it, what's your why, things of that nature. And so here's what I'm going to do. I'm going to send you Christy Wright's new book, Business Boutique, where she's focused on helping empower women to do the things that they love.

And I'm also going to send you Dave's number one bestselling book, Entree Leadership. This is the playbook and how we run our company. And so it's an outstanding resource for people that are leaders or business owners or even managers or even people that want to get into leadership. Great book. I'm going to send you both of those and it can really help you as you're developing kind of your process and you're looking at this. But also, do me a favor, involve your husband in the discussion of this so he can understand

it and see it, and he can get excited and get behind you and to be able to support and encourage you as you're doing this thing. So right now, it's an idea. So we need to kind of help it And really look at it so it can grow Into something that can become an opportunity Thank you very much Joy for your call I really really appreciate that Alright next up on the line I've got Rachel

In Hershey Pennsylvania Rachel how are you? I'm good Chris how are you? I am fantastic it's good to hear from you How can I help you? Great great to talk with you Well my husband and I are currently on baby step four, and we will actually be welcoming our first child here in about two months.

Oh. Yes. And because of Dave's plan, it actually has allowed us to achieve our dream of allowing him to leave work and become a stay-at-home mom. But what I'm wondering is, I have about $41,000 in a 401k with my current employer and actually a pension, um, that my employer is actually going to be freezing here soon. And just wondering what I should be doing with the funds in both of those locations. Now that I'm going to be becoming a stay at home mom.

Yes. How do you feel about becoming a stay at home mom? It hasn't hit me yet. I think it's a different dream for someone in their late 20s nowadays. It's something that not everyone understands, but getting out of debt was a huge accomplishment, but this almost feels just as good as that, knowing that we can have a home and live on one income on a teacher's salary. Absolutely.

That is magnificent. So what will your household income be? It will be just shy of about $60,000 a year. All right. First child on its way. Do you know if you're having a boy or a girl? It's a little baby boy. Little baby boy.

Have you picked out a name? I'm not going to ask the name, but have you picked it out? We have not. We want to meet him first. That is fantastic. Have you picked out a name? I'm not going to ask the name, but have you picked it out? We have not. We want to meet him first. That is fantastic. And then hopefully we'll find one that works. I like that. And Christopher is a great suggestion.

I'm just going to put that out there. I have to. I have to help you. How much debt did you guys pay off? We paid off about $46,000. What did you sacrifice to do that? A lot of things that I think everyone assumes are normal for newlyweds. We didn't travel.

We didn't go on a lot of dates. We had a lot of sitting on our back porch in a very small apartment, drinking coffee. But I think the most important thing was delaying buying a home. A lot of people told us that we were throwing money away renting, but the number one thing that I say, we're coordinators and actually just let our first class of about 400 people at FPU, at our church. And the number one thing that we told everybody is if it wasn't for that small apartment that we were, quote unquote, throwing money away at, there's no way that we would have been able to pay off our debt.

If we would have bought a house, we would have, Murphy would have showed up, I'm sure. Without a doubt. How many people were in your FBU class? 400. 400 people in a financial peace university class. And Rachel, I have to tell you, you're absolutely right. You said a lot of things you didn't do. We didn't go out to eat.

We didn't take fancy vacations. We didn't buy a home before we were ready. We didn't. We didn't. We didn't. And you know what home. I'm proud of you all. And I'm very impressed with the sacrifice. So to answer your question, what to do with that 401k, I'm going to roll it over into an IRA. And you roll that over, it's going to allow you to really stay focused. We're not touching it. It's still going to continue to grow. Oftentimes, when you roll a 401k over into an IRA, it gives you more investing options than maybe you had even inside the 401k. So, America, you don't ever cash it out. You roll it over, and it allows it to keep growing. Rachel, I'm so impressed, and thank you for coordinating Financial Peace University.

This is, America, if you're brand new, this is the nine-week course that has changed the game for over 5 million people. It's where we walk you through the process of how to budget, how to attack debt, how to be able to save, how to be able to invest and give like no one else. Dave teaches, Rachel, myself, the three of us are walking you through real-world scenarios, having a lot of fun, but giving people information. It's the program that changed the game for me. And I'm telling you, it will do the same thing for you. And so regardless of where you are right now financially, you've got an opportunity.

Do me a favor, Kelly. I'd love to send Rachel a copy of my book, Everyday Millionaires. I'm very excited as well as send a copy of Dave's Total Money Makeover, because I'm sure where she is right now, they're going to bump into people in their Financial Peace University class that need some information, and they're going to be able to do it. You know, it's so different when you meet people that have lived through some stuff, right? They got some battle wounds.

They got some stuff that they've walked through, and it's a great opportunity to be able to learn. So, Rachel, thank you again. Congratulations on the upcoming baby and for you guys making sacrifices to put you where you are right now. See, it's not an accident when people win, America. It's a matter of being intentional. And so let me ask you this. We all talk about things that we want to accomplish.

What are you willing to give up to accomplish it? I want you to sit down and write it down right now. Like, what are you going to do? Right? I'm trying to get healthier. So guess what? I'm giving up a lot of sweets. I'm eating salad, America.

Right? Salad's not food. Salad's a promissory note that food is coming. Right? But that's what you do. You got to sacrifice if you want to win. This is The Dave Ramsey Show. I'm Chris Hogan, filling in for Dave.

And today, we're excited to announce our brand new event, Financial Peace Live. We're going to be hitting four cities around the country this fall, and seats are available and on sale right now. So if you're sick and tired of money problems, debt payments, or the stress of living paycheck to paycheck, it's time to put an end to all of that. And it can begin with Financial Peace Live. It's one night. It's going to be exciting. We're going to have fun. And it's going to give you all the information and momentum you need to kickstart your year because you can take control of your money once and for all. So here's the lineup. September 12th, we'll be in Austin, Texas. It'll be myself along with

Anthony O'Neill. Then Anthony and I will be in Tacoma, Washington on October 2nd. Then we will be in Phoenix, Arizona on October the 10th. And then November 20th in Charleston, South Carolina, Dave and I will be there bringing you Financial Peace Live. So we're very excited. Seats are on sale now. This event does sell out fast. So learn more details and get your tickets by visiting DaveRamsey.com slash events.

Let me say that again. It's DaveRamsey.com slash events. Or just call our team. They're ready to help you at 888-22-PEACE. So it's fantastic. I'm excited about this event. It's always fun to do these live and just be on stage and have fun with the fans and be able to interact and see people out in the lobby. If you've never attended one of our events, I want to strongly encourage you to do so. They are a lot of fun.

All right. I'm getting back on the phone. So, America, if you've got a question on money, I want you to call me. The number to call is 888-825-5225. Again, that's 888-825-5225 or hunt us down on social at Ramsey Show. All right, I'm back on the line here. I've got Mary in Detroit. Mary, how are you? I'm just fine. Thanks for taking my call, Chris. Yes, ma'am.

How can I help you today? Well, my husband and I are both retired, and we are going to inherit about $100,000 next month. And I'm on to the mortgage question. We owe about $107,000 on our mortgage yet. I want to just take this money, and we have some extra money money and pay off the mortgage and be done with it. And I know that's what you guys talk about. On the other hand, our financial advisor is saying, you know, you have a low interest rate. It's about 3.6. You're making, I think we're making somewhere between 8 and 10 on our 401s.

And if we needed the money monthly for the payment, we could just take it out. We really don't need to take it out. We could afford it with what we bring home anyway. But I just would like to have that mortgage paid off. But on the other hand, I don't want to mess things up by not doing the wise thing with this $100,000. Okay. Let me ask you, Mary, who's the $100,000 coming from? It's coming from my mother-in-law. She died three or four years ago and we're just

finishing up her estate. Oh, gotcha. I'm sorry to hear about the loss, but definitely it's a blessing that she left this money to you all. And so you owe 107,000 on the mortgage. How much do you all currently have saved toward retirement right now? We have approximately $600,000 in our 401s. Okay. All right. And the house is worth about $300,000. Okay. That was my next question. Well, Mary, guess what? You and I are in 100% agreement. I like the idea of you paying off this house. I like the idea of that mortgage payment getting out of your life. And we're not falling for that old interest rate thing, okay, just because it's a low rate.

We're not falling for that. It's a payment. And I'm paying interest. And I don't want to pay interest, right? I want to gain interest. Right. And so what you and your husband could do is take what you're paying. How much are you paying on this mortgage each month?

Our total, well, on the principal and interest, it's about $900. Okay. So here's my thought. You take that $900 that was going toward this mortgage, and now you can start to invest that and utilize that money. And so you're thinking right, young lady. I like your focus. Is your husband, does he feel in the same way? He is.

He's just, you know, he's paying it off. But on the other hand, we're just getting a little mixed up because we're listening to the financial advisor guy, too. Well, I understand. We'll call Dave Brambley's show and see what you guys think. That's exactly right. And you knew what we were going to say. Mary, thank you for calling us because that's something a lot of people out there need to hear. We don't want to fall for that trap, right?

We've been so conditioned in our society that a low interest rate is a good thing, right? Well, I'd say no interest rate is a better thing, and when you pay off debt, you can do that. So be focused. Attack debt. Get it out of your life, remove the risk altogether and put yourself on a firmer foundation moving forward. All right, I'm back on the phone. I've got Brittany on the line in Philadelphia, Pennsylvania. Brittany, how are you? Hi, good. How are you? I am focused and not finished, young lady. Good to talk with you. What's on your mind?

All right. So my question is about how crazy I would be to stay home with a new baby instead of returning to work. Okay. All right. How old is the baby? So he is 12 weeks. Well, actually, I think he's 13 weeks today. Brand new. Congratulations.

Yeah. Thank you. Yes. Okay. So what line of work were you in before? Graphic design. Okay. All right.

And so tell me what baby step you all are on. So basically, we decided to have this baby last spring. And then after I got pregnant in like July, a couple of months later, I start freaking out. Like, what are we going to do? And a friend mentioned the Dave Ramsey podcast and how much she was enjoying it. Okay. And we had been visiting her from a couple hours away. So we, like, started listening to it in the car.

And then we got real crazy and paid off all of our credit cards using, like, savings and gift money and, like, all the extra money that we could. Like, we started using the EveryDollar app and, like, really budgeting. And we were able to pay off $10,000 in credit card debt. And we saved up an additional $9,000 to have in the bank for just in case we needed it once the baby comes, and we like stopped the baby steps at that point, which I think is a normal thing you're supposed to do, according to the Dave's book. Pause is a better way to put it. Let's say pause.

Right, exactly. Okay. So now we're at the point where if I go back to work, basically after taxes, I make like $2,400 a month. And daycare is like between $1,700 to $2,000 a month. And we're just not sure it's like worth that like $500 that I would be making after paying for it to have someone else raise our child for like 12 hours a day. Okay. Well, Brittany, number one, how old are you all? So I'm 35 and my husband is 30.

That's fantastic. Well, I love how intentional you all were. Like you had a friend talk to you about it. You guys start listening and then you start doing right. I mean, I absolutely love that because that means you all are chasing down, getting intentional, paid off over 10,000 in debt, saved up some money, and now you're focused. Here's the thing. I think it becomes a financial decision, and I like how you've done the math on what that daycare costs versus what you were bringing in.

But I think there's another part of this equation, Brittany, that you also want to look at. And that is kind of just your overall feel professionally as well as social, okay? And so I think that that's something that you want to consider as you're making kind of the decision all the way around, because do you love graphic design? Yeah. I actually forgot to mention we do have another option, which would be to move we do have another option. Okay. Which would be to move in with my husband's parents for a few years where we would be able to pay off our remaining debt and we could sell our house and use some of that money to pay off some of our debt. But they live in another state, so both of us would have to leave our jobs

and look for new jobs once we got there. Yeah, no. Yeah, I don't i don't i don't i don't like anything based on that option okay oh really no no i don't for many reasons uh number one you're moving in with the in-laws you're leaving all employment right and so you're coming in you guys are it's it's like an invasion there's just three of y'all now you know uh and you're selling it just feels like you're giving up a lot of the things you guys are, it's like an invasion. There's just three of y'all now, you know? Yeah. And you're selling up here. It just feels like you're giving up a lot of the things you guys have worked for and worked toward to go into an unknown.

Right. And so I wouldn't do that. I really wouldn't. I like the idea of you guys really being focused. And now it's different, Brittany. If it were a health situation, you follow me? Where it was, you didn't have an option. So I like the idea of you guys staying committed, walk through this, look at it, do the math on it. And here's the thing.

You doing graphic design, that's something you could do part-time from at home or on the weekends. So it allows you to stay connected, stay professional, and have an outlet as well. So, again, I like that you guys are intentional. Attacking debt, it gives you back freedom, America. It also gives you options. This is The Dave Ramsey Show. Hello, America. You are listening to the dave ramsey show i'm chris hogan filling in for dave and we're excited to have you had some fantastic calls and so i know you're out there right now with a question about money that you would love to get an answer to. Well, guess what? Call us. We're here. That number to call is 888-825-5225.

Again, that's 888-825-5225. Or you can hit us up on social at Ramsey's Show. We take your questions from there as well. Okay, I'm back on the line. I've got Edward down in Columbia, South Carolina. Edward, how are you, sir? I'm doing well. How are you, Chris?

Oh, I'm focused and not finished, my friend. How can I help you? So my wife and I are on Baby Step 3. We're trying to save part time. And my question regards to, it's a two-part question. Number one, does it go with gross income, the 15%, or is it based on my net income okay and then the second part is my wife's work max is three percent and then we also have two rough IRAs how should we balance where we put the money okay fantastic so Edward let me tell let me ask you

this you're on baby step number three. What are your ages? So we are 26 and 27. Okay, fantastic. Wow, getting started young. Where did you guys learn about money? I just saw a Dave Ramsey advertisement come across my screen one day on my emails. Wow. And that's where I started following him.

That is fantastic. So did you have to pay off some debt to get to here? Yes. We had about $13,000, $14,000 of student loans that we finished paying off last year. That's fantastic. Very proud of you all. So you guys have any kids right now? No, not yet. Okay, fantastic. So you guys are focused on baby step three, saving to have the emergency fund and looking at investing. Go off the gross, Edward, as you're investing and putting it aside. It's a matter of being able to split up with the Roth IRA, but I want you to be at 15%. So that 15% can look like you putting money in the 401k. And then if you have to up to the match, then you can go to Roth. And if that still doesn't get you to 15, then you come back to the 401k. But that's the key. Right now, you're in that money growing stage. And I tell

people you want to be a money farmer and that money needs to grow because we've got to outpace inflation, right? Because the cost of goods are going to go up. So I need to make sure that money is growing as well. And so we look at growth stock mutual funds from an investment standpoint that allow you to be able to diversify. Now, America, people hear this word diversify, and I know they're going, okay, that sounds like a $20 word. Chris, what does that mean? Simply means to spread it around, right? I don't want to put all my eggs in one basket. That's just too much risk people on that basket. So I want to spread it out. I want to diversify and put my investments in multiple different growth stock mutual funds that allow me to diversify. It just means spread around. And so, Edward, with what you all are doing and the pace you're on, at 26 and 27 years old, I have no doubt that you all will be everyday millionaires at some point.

But just keep your focus and continue to invest. And do me a favor. Reach out. Get connected to an investment professional. If you don't have one, we have them. They're called SmartVestor Pros. You can go to DaveRamsey.com and get connected with one in your area. Okay, I'm back on the line.

I've got James from Minneapolis, Minnesota. James, how are you? Great, how about you? Oh, I'm focused and not finished, my friend. How can I help you? I'm trying to decide on whether or not I should pursue an MBA. I've been accepted into a program, and the price tag has me kind of concerned, and I'm just trying to get some feedback on that.

Okay. All right. So what line of work are you in? In health care. Health care. Okay. And what's your household income right now? Roughly $160,000.

Okay. And if you do this MBA program, what do you think your income could be after that? So my income would go from probably $100,000 to $140,000 within the next year after I graduate from the program. Okay. From the same company you're with, or would you have to find a different company? With the same company or a different company. Okay. So let's back out from there and tell me, how much is the program you're looking at?

42K. Okay. All right. And are you familiar with the Baby Steps? I am, yes. All right. What are you familiar with the baby steps? I am, yes. All right. What baby step are you on? On the contemplative stage where I'm still trying to pay off debt.

I have quite a bit of student loan debt from my first undergrad, my first master's. All right. And so I have about $ 100k in student loan debt so i've been working on uh chipping away at that okay so you baby step two you you've got student loan debt outside of the 100,000 student loan debt what else do you owe on um mortgage is about $275,000. Okay. All right. And do you have undergrad student loan? Yeah. I have $40,000 in undergrad debt and then $60,000 for my master's that I don't currently use.

Okay. What field was that in? That was in social work work i wanted to be a therapist okay for a period of time okay got you all right and so now you're looking at another program that would be about 40 42 000 uh no um and and the reason i say that is james it's get boils down to cash i mean we got to do the math on this, right? And so here's the thing. Could you at some point get plugged into the MBA program? Absolutely.

But how serious do you want it? So I would get intentional. You've got $40K hanging out from undergrad, then $60K from the first masters. Yeah, no, we've got to clean up. We want to keep adding, right? Adding to that, it just makes things heavier and tougher. It'd be different. If you had the money sitting around and you didn't have the debt, then yeah, pay cash for it and you move on and you do that. So I've had a friend of mine was in a similar situation. It's about eight years ago. And he was very focused on wanting to get

his doctorate at that time. And I said, well, what are you willing to give up? He goes, what do you mean? I said, well, I mean, you got to attack this other student loan debt and you got to figure out how you're going to pay cash. And he honestly, James, devoted enough time that his part-time job was figuring out how he was going to get this debt attacked. He got that intentional. And so for you, I'm going to put the same ball in your court.

If you're that serious about it, then you'll figure out a way to attack this debt and then figure out how to save cash. Again, right now, what we don't want to do is paper math. Paper math is where you look at it and you go, well, Chris, you don't understand. I could be making this right once I do that. And I go, yeah, but you don't have the cash. Like you can't afford it. You can't. You have to take out another student loan. No, we're not doing that. I already got $100,000 in student loan. Not adding to it. So, James, I want you to attack the debt. Get focused. We don't want to go backwards. We want to go forwards because that's where progress is. Okay, I got a social question from Josh on Twitter. He said,

Chris, we make $120,000 combined. We're debt-free except for our house. We've got a home and a HELOC, which America stands for Home Equity Line of Credit. That's a mortgage, by the way. Okay, just FYI. So we're currently paying an extra $4,000 a month on the HELOC. Should have it paid off in five months. He says we have a car that has 215,000 miles on it

and it's falling apart. Is it okay to pause the HELOC payment extra, pause the extra payment to buy a car with cash? He says the car won't last three months. Josh, all right, here's the deal. If you can't duct tape it, if we can't ride it like a skateboard, if it ain't going to make it, then yes, pause it briefly. Spend the cash, buy a $4,000 car, and then get back to focusing on this HELOC. I like that you put the goal out there, going to have it attacked and paid off in five months. HELOC gets out of the way, then you turn your attention to the mortgage.

You're well on your way, my friend, to being very weird by becoming 100% debt free. So you can do that. That's what I'd do. But I like that you're going with cash for the car. Okay, I'm glad you didn't say anything about a payment or anything, because then I'd have to get riled up. We're not doing payments, right? Because interest that you pay is a penalty.

I want to be rewarded, America. I don't want to be penalized. So I want to grow rewarded, America. I don't want to be penalized. I just want to grow forward. Thank you. I want to thank James Childs, our producer, associate producer Kelly Daniel, and I want to thank you, America, for taking the time to call in and join me this hour.

It's been a fantastic hour and a lot of fun. This is The Dave Ramsey Show. Did you know you can now listen to The Dave Ramsey Show on Pandora and Spotify? For all the ways to watch and listen, check out our show page at DaveRamsey.com slash show.