The Ramsey Show - App - How to Make Your Relationship a Priority Again (Hour 3)

Episode Date: June 29, 2018

The show about you

🎵 Live from the headquarters of Ramsey Solutions, it's the Dave Ramsey Show, where debt is dumb, cash is king, and the paid-off home mortgage has taken the place of the BMW as the status symbol of choice. I'm Dave Ramsey, your host. This is your show. Thank you for joining us. Open phones at 888-825-5225. That's 888-825-5225. Brock starts off this hour in Richmond, Virginia.

Hi, Brock. How are you? Good, sir. What's up? Good to speak with you. You too. I have an investing question with 401k. If it would be okay to, like, do 10% instead of 15% contributions. Well, so basically, I make pretty good money,

and I want to put the other 5% into a mutual fund that's accessible so that, like, when further down the road, I want to buy investment properties. And so I don't know. I was just curious what your thoughts were. Well, baby step number four is 15% saved for retirement. Now, let's talk about retirement. That doesn't necessarily mean it has to be in a retirement plan. Bottom line is you need some wealth to live on when you get old, right?

Yeah. And what you're talking about is building wealth and so if you wanted to not put it all in 401ks or roth iras and put some of it in a mutual fund in order to buy your first rental property with cash absolutely i would do that sure okay the point is don't consume everything and then scratch your head and wonder why you have to eat alpo when you're 65 yeah i got you so you know that that's but but if you if you have a system a systematic process that helps you automatically save money like a crazy man five percent going automatically out of your checking account into a good mutual fund or two um and then you've got your 401k and roth iras on the other 10 yes i would do that

that's still saving it's still investing and saving for the future which is the point of the and then you've got your 401K and Roth IRAs on the other 10%, yes, I would do that. That's still investing and saving for the future, which is the point of the exercise. You follow me? Yeah, because I'm almost done with my emergency fund, and I already had previously invested in 401K, and I have a good bit in there. So, I mean, I've just run the numbers, and I'm like, if I put 15% in, just in my 401K, I can't access it until I'm 59. Right.

How old are you? I want to be able to, 22. Oh, wow. How much is in your 401k? $22,000. Okay. All right. Well, that's not a lot, but at 22, that's excellent.

So, yeah, you're fine doing that. Just here's the trick, man. You've got to have the discipline to keep your hands off of it this is not i want to buy a best boat fund yeah it's not i want to go on vacation with my buddies to africa who just decided they were all going no this is for a rental property that i'm going to pay cash for you don't freaking touch this money for anything yeah i got you and if there's any question in your mind that you don't have that kind of discipline that you might turn around use that money for the wrong stuff then don't do it but uh the concept is valid if you play through on it the the beauty

of the 401k is you can't get to it and so it's hard it's hard to screw it up but uh but if you want to play that through i don't mind you doing that at all um you know the vast the vast that's not fair the larger portion between mutual funds and real estate i have a lot more in real estate but real estate's been better to me than mutual funds have been to me. So that's part of it. Part of it is I put more into real estate. I love real estate. I own a bunch of it. So I'm sympathetic with your cause, and it's a good way to build wealth. It's a legitimate way to build wealth.

And so that's the direction. Yeah, I think what you're talking about is fine. Just make sure you do it in a way that you stay disciplined with it. Carla is in Virginia. Hi, Carla. How are you? Hi, Dave. Glad to get through.

A couple years ago, I took out a life insurance policy on myself of $500,000, and this was designed to take care of my now 88-year-old mother if I go before her to take care of nursing care. She has dementia. And my sister is a beneficiary. She is supposed to be handling it. Now, I told my sister, hey, if my mother goes before me, I'm going to drop the insurance policy or lower the amount.

Absolutely. You're single, right? Yes. Okay. Yeah, there's no need to keep that insurance policy. Yeah, I mean, she wants me to keep it because she thinks, well, you know, this is our possible inheritance. I'm like, no, no, you're my sister.

You know, if anything, it goes to kids or something. And, you know, she says, oh, I'll pay for it. I'll make the payments. I don't want you to make the payments because she's not dependable. I mean, if she doesn't pay it, it lapses, and I don't have insurance even the little bit that you know i want for me yeah carla just raise up the hair on the front of your face and ask her if it looks like it says lotto ticket across the front of your forehead you're

not her lotto ticket okay no and uh you know the no this is not it doesn't work financially it doesn't work relationally it's an an absurd concept. So absolutely not. $500,000? I mean, that's not ten times my income. I wouldn't leave anything to her as a beneficiary. But what I'm saying is, I mean, with the insurance, $500,000, is that too much for my mother's care afterward? No, because that will provide about invested.

Let's say it made 10%. It would provide $50,000 a year, give or take, right? And you're going to need that much for nursing home care so you're fine for that but you need a will and a trust and so forth that's set up that that money goes into does not need to go into your mother's name no and then your sister doesn't need to my sister's name because i think she's going to be the one taking care no you don't need to leave her the money as a beneficiary. The beneficiary should be a trust. Okay.

And you need a will that names that trust, and upon your death, that money is paid into that trust, and the terms of the trust are the money is to be used for your mother only, and upon her death, the money is to be done X and Y with it. Right. But your sister should not be the beneficiary be done X and Y with it. Right. But your sister should not be the beneficiary. She mishandles money. Okay. She'll spend the money.

She'll spend the money that you thought you left for your mother. Well, the only reason I did, I thought, you know, I didn't want her to have to quit her job and take care of my mother. I thought, let me provide some funds for nursing here. The concept is right. You left out of detail. Because you left her in control of the money with no guidelines. And the trust takes the power away from her and doesn't let her have the money to go buy her a car. Okay. Your sister

doesn't need to buy a car out of this money. Agreed? Agreed. Okay. That's what i'm talking about when you just leave it to her it's her money she can do with it what she wants to if she just decided to not take care of your mother i mean of course you're dead there's nothing you can do about it and there's no legal ramifications on your sister that way but if there's a trust and a trustee and i wouldn't make your sister the trustee i'd take her completely out of this because she's just demonstrated by this stupid question that she's not reliable.

Someone else needs to be the trustee on this. There's probably a grandkid somewhere around that's got some sense. And let's set them up as the trustee or an attorney up as the trustee to manage the money should you die. And if your mother passes, you cancel the policy. You don't need life insurance in your situation just enough to bury you you don't have any dependence and so that that's the way to look at it good question carla thanks for calling in family can't live with them can't live without

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Free samples, free shipping with the new promos every month. You'll save even more. Use the promo code Ramsey. We love this company. They're good folks. Tim's in Pennsylvania. I have about $20,000 of debt to pay off. I want to buy an engagement ring that costs about $3,500.

Should I pause the debt snowball and save that up or wait until I'm done with the debt. I would pause the debt snowball temporarily to save up for an engagement ring. I'm not sure $3,500 is your target. That's up to you. Generally, the jewelry store people will tell you, you know, what, two to three months of your income. That's crazy. Maximum of one month of your income. And you need to know that diamonds are a couple things about them.

Number one, when you're buying a diamond, it is not an investment. I've been buying Sharon diamonds for 30 years off and on. She's got several, and I've never seen them go up in value yet. So the only investment is just in the relationship and then giving somebody a nice gift, but they don't go up in value. Very rarely, very rarely. And by the way, very rarely does somebody sell one, so it doesn't usually come up. The second thing you need to know about diamonds is learn a little bit about them,

the basics of, you know, looking at a diamond, cut, clarity, all that kind of thing, color, and carat, the four Cs they call it, right? And that's the carat's size, obviously. And, you know, shop around, learn a little bit. You need to know that most of your retail jewelry stores, diamonds have some of the highest markup of anything out there. Jewelry, retail jewelry has high, high markup. And so, I mean, you can find deals through diamond brokers and those kinds of things.

And even high-end pawn shops. Now, you need to know a little bit about what you're doing so somebody doesn't rip you off and sell you a zirconian or something, right? But, you know, just study it a little bit and come at this a little smarter because you generally can get almost double your money's worth. What you thought you were going to get for $3,500, you might get for $1,500 or $2,000. And so just by working it a little bit and thinking it through. So that's the main thing you want to lean on there. And, you know, just take your time, not more than a month's income. And let me just tell you, there is no correlation between the size of the diamond.

There's no statistical evidence between the size of the engagement ring and the quality or length of the marriage. As a matter of fact, there might be some actual data out there that says the opposite is true. The inverse is true. Not to say you can't give somebody a big diamond. It ruins your marriage. Don't misunderstand. But there's just a lot going on in this discussion. So you do have $20,000 in debt. Let's be responsible. Let's get a deal on it, learn a little bit about it, and don't spend more than a month's worth of your income.

And in that case, yes, I would temporarily stop your debt snowball in order to get engaged, of course. Russ is with us in Tacoma. Hi, Russ. How are you? I'm staying out of trouble, Dave. How are you doing? Barely. How can I help?

Hey, I'm going to retire next year. I'm a Vietnam vet. I have about $335,000 in a non-wrought IRA and about $125,000 in stocks. At 70 and a half, the government requires you to take the money out of your mutual funds and start investing. What my question is, would it be smart to start taking it out now and putting it in a Roth IRA or actually wait until I retire? Well, you won't be able to put it into a Roth, a new Roth when you retire. You can do a rollover when you retire if you wanted to, but that makes all the taxes come due then.

And so that doesn't really accomplish your goal as far as keeping the taxes off the account. The government does not require you remove the entire amount at 70 and a half. It requires that you begin removing a minimum amount. And so what a lot of people do is they take that minimum amount out, and if they don't need the income, don't need it as income, they just turn around and roll it right back into an investment. And so you take the distribution, the minimum distribution. Yeah, that's what I wanted to do.

Yeah, and just move it into a mutual fund. I mean, just take the minimum distribution. You pay the taxes on it. You have to. And move that right back into a good mutual fund. And, yeah, you can do that. A lot of people do that. And since you've got the military retirement and the other things coming in,

you may very well not need the income off of it. And thank you for your service, by the way, sir. Thank you. And thanks for calling in. Jason's with us in Oklahoma City. city hi jason how are you i'm doing pretty good dave how are you better than i deserve what's up well i uh i've been listening to you for a while and um i think i've i've uh finally got my wife uh on the same page of wanting to get out of debt but the problem is um we're i kind of know what steps we need

to take. But my thing is, she has a lot of medical issues. And so over the years, we've accumulated a lot of medical debt. But at this particular point in time, I'm not really even sure where we stand on all of this debt. And I don't know where to start to find out what we owe and who we owe and how to get it paid off. We're running into that as well as an income problem. She's not going to be able to work very much longer, and my income cannot sustain my wife and my two kids. And so I'm trying to figure out a way to advance my income as well. So we're kind of confused on what we need to do and the direction that we need to go. Gotcha. Okay. So what do you make?

I am only making like $13.50 an hour right now. So I'm not making a whole lot. She actually makes a lot more. But when we're trying to do our budget, she has an irregular income. She's a server. So her income varies nightly on what she makes. Some nights she makes $50, some nights she makes $150, so it's kind of hard to plan for a budget. What do you do for a living?

I work for a company that supports point-of-sale systems for restaurants and whatnot. We just basically do the technical support for them. So I've been in the technical support customer service industry for a long time, so that's kind of what I do. Okay. Tech support and customer service in other spaces pays a lot more than you're being paid. I agree. I agree, and I am actively looking and pursuing other companies. I just haven't gotten any bites yet, so that's kind of what I agree, and I am actively looking and pursuing other companies.

I just haven't gotten any bites yet, so that's kind of what I do when I'm not working. Yeah, yeah, okay. Yeah, I think you're right. If her health is failing her and she's going to be unable to continue to contribute income, then, yeah, you do have a pinch because you're making about $25,000 a year, give or take, and you probably can double that if you start concentrating on it. And you may have to add some tools to your belt, metaphorically. You may have to gather some knowledge on tech support you don't have today.

In other words, you're very specified tech support. You may have to broaden that knowledge base a little bit, but that's not something that can't be done, especially if you have an aptitude in that area and some experience around that area. So, yeah, I think you're on to something there. You work on the income side of the equation. As far as adding up all of the debts, we don't need to worry about that until we first sustain your family.

But once you're sustaining your family, once you've got that going and you want to begin to clear up the debts, that's certainly a good thing to do. There's three or four things you can do. One is start with what you know, gather the ones up that you know about, and start a file when a bill comes in the mail or a collections notice comes in the mail. How old are these debts? How long have they been laying around? Oh, gosh, they probably go back probably eight years or so.

And so some of them, we don't even get phone calls on them anymore. They've done gone to collections, and I don't, you know. We've moved to another state since then, so I don't even know if they know how to contact me. So we haven't even heard anything about any of them. So those are the last ones you fool with. The first ones you fool with are the most recent because they're the most likely to come after you. Get in writing what is owed, and then i'll make them an offer on it once you've got some money above being sustained to do that and of course you can pull a copy of your credit bureau report there'll be a

lot of them on there that uh they've been trying to find you and they'd love to hear from you but just contact one at a time after you've got some money above being sustained so let's get organized begin to work through first getting sustainability then work your way through the newest debts to the oldest debts as you're waking up sleeping dogs I get asked all the time, when in the baby steps is the right time to buy life insurance? My answer is typically now. Life insurance is not part of the baby steps because it's needed when your family has debt and not enough savings to provide for their financial needs. That's when they're at the highest risk.

And no matter where you are in your baby steps, it's a necessity, not a choice. This includes working husbands and wives, as well as stay-at-home parents. It's pretty expensive to replace those stay-at-home parent responsibilities. I only recommend term life insurance, since it's the most affordable way to get the right amount of coverage and not break your budget. Go to Zander.com or call 800-356-4282. These are the guys I personally use. Term life insurance is inexpensive, and your family needs this no matter where you are in your baby steps.

That's Zander.com or call 800-356-4282. Zander.com. Or call 800-356-4282. Zander.com. Thank you for joining us, America. This is the Dave Ramsey Show. Brian is with us in Davenport, Iowa. Hi, Brian. How are you? Wonderful. How are you? Better than I deserve, sir. How can I help? Well, I've been listening to the podcast for about four months

and really soaking it in and read a lot of Total Money Makeover. And I'm on board 100%. We're on step two and working our way through that, and that's going well. My wife is sort of on board by proxy. She hasn't listened or read or anything, but she's just sort of following my lead, which is great. But there's one struggle that we have. She has these, and I'm on board with, you know, don't have credit cards, but she has these store cards. You know, they're not Visa's and MasterCard's, but they're store cards. You know, they're not visas and MasterCards, but they're store cards. And, you know, she doesn't want to get rid of them because they send her coupons if she uses

them or she gets points. And, you know, I dutifully pay them down to zero every month. That's not a problem, but I hate them. They complicate my life and it's just more things to keep track of. But I don't know how to explain to her in sort of a loving way that, you know, we need to get rid of them. I don't want to just cut them up and just sort of, you know. No, no, that would be bad. That would be a bad marriage move, yeah. Bad marriage move. Yeah, yeah, I want her to be in agreement, but I don't know how to explain it to her.

Okay, so let's kind of get down under this for a second. What the real problem is, is that she trusted you until it got to her cards. The proxy ended at the department store cards. What this is saying is you all are evolving through this process, which is kind of normal, and the next step in the evolution of the process is not proxy anymore. It's instead of her trusting you for her to gather the same information you've been gathering.

So the goal is not for her to get rid of the cards. The goal is for her to learn some of the things that you have learned that you've got excited about. Right. And when she learns those things, whether it's podcasts, whether it's just the Total Money Makeover book or something else, then she will be as excited as you are, and it won't be by proxy. And so this has gone as far as it's going to go with proxy. Okay. and so this has gone as far as it's going to go with proxy. You'll put this whole movement into overdrive when she actually gets the why, and the why is not because I trust my husband.

It's great that she does trust you. That's very cool, but that's not the why anymore. The why now needs to be that she grasps why you're doing this. Have you guys been through financial peace university no would she go if i gave it to you yeah i think so all right i'll give it yeah yes she would she would i'll pay for it the two you need to go because if the two of you go to class and go honey just do me a favor just go this class with me it's only nine times and then we'll talk about this other stuff. Because she's going to go.

The light bulb's going to come on over her head. She's not unwilling. She's not unintelligent. She's not a princess. She just said, oh, honey, whatever you want to do, until you wanted to mess with her stuff. And then whatever you wanted to do didn't cut it. Now she's wanting to be a thinking person and engage in the process. So she's an easy person to convert because she's not adversarial.

Right. Now, if you push her and make my name into a cuss word by just yakking at her all the time about this stuff, you'll make it adversarial. Don't do that. That's what I'm afraid of. Yeah. Instead, you guys just go to the class, and I'll pay for it. And just say as little as you can possibly say,

but enough to get her to go with you. Okay. Maybe proxy will extend enough to get her to go to class on proxy. That would be fine. Because then she's going to get a hold of it, and she's going to go, Oh, now I see what you're saying, Brian. All right, let's do this. Game on, baby. That's what's going to happen to this lady,, and she's going to go, oh, now I see what you're saying, Brian. All right, let's do this. Game on, baby.

That's what's going to happen to this lady, because that's who this lady is, isn't it? Yeah. Yeah. Cool. Very cool. Hang on. I'll have Zach pick up, and we'll get you guys into a class. Brian and Sarah are with us in Los Angeles.

I see on my screen you guys are debt-free. Congratulations. Thank you, Dave. Cool. How much have you two paid off? $245,000. Oh, I love it. How long did that take?

Six and a half years. Wow. What kind of debt was that? All student loans. Oh, Sally freaking May. Oh, my gosh. They got bought out and became Navigant. Yeah, same thing.

It's the divergent form of Sally May. So what was your household income during this time? Well, it fluctuated a lot during the time, obviously, because it was a while, but we started about $72,000 and ended at about $114,000. Excellent. What do you all do for a living? I'm a pediatric nurse at a children's hospital. Cool. And I'm in business development, and I'm a salesman.

Okay. So the nursing degree was a lot of this, I guess. Yes. Until I started making my bonuses, and then I knocked out the rest. Very good. Okay, cool, you guys. Well done. So what happened six and a half years ago that put you on this track? I knocked out the rest. Very good. Okay, cool, you guys. Well done.

So what happened six and a half years ago that put you on this track? Well, during my last year of college, my mom actually got a copy of Financial Peace and Total Money Makeover. So she handed off Total Money Makeover to us, and I read it through first and handed it off to Brian. We were engaged. And so before our loans came due we kind of already had a plan of how we were going to tackle this huge number yeah but it was a huge number so there's a student loan crisis in america you can't get out of student loan debt but you two did it we did i mean you've been on beans and rice for six freaking years though yep pretty much there's a lot of sacrifice i got laughed at at restaurants

when i brought in the sack lunch i love it hey man you gotta have those stories that's part of the process isn't it yeah that's cool yeah broke people are making fun of your financial plan you're right on track baby yeah i love it way to go man i'm proud of you guys how old are you i'm 33 i'm 30 wow how's this feel it feels great um it's almost surreal still but um it was i don't know this exciting experience when we went in and made a for fun movie purchase at target for the first time in years i love it, we can actually enjoy some things now. Right. Yeah, you got to, man, if you can climb Mount Everest, you can do anything though. This is a mountain of student loan debt. Our story in the last six and a half years is I had a job

loss. I was unemployed for 45 days and we lived at four different addresses we kept moving to find a cheaper deal wow we lost two cars and bought two cars cash during the six and a half years and we had two kids we know everyone knows that having kids is expensive oh yeah all that being said we did all this while living in california now and you still paid off 245 000 in six and a half years. Yes. So the moral of the story is it can be done. Absolutely. I definitely want to encourage your California listeners, since we have such high living expenses, you guys can do it too if we can. There you go.

Well, you did it, man. I mean, you're 33 years old, $245,000. We've got a copy of Chris Hogan's book for you, Retire Inspired. We'll send it out to you. That's the next chapter for you to become millionaires. Call in on the Millionaire Theme Hour and be outrageously generous along the way, okay? Absolutely. Brian and Sarah Los Angeles, $245,000 to Sally Mae in six and a half years,

making 72 to 114, two kids in the process. Count it down. Let's hear a debt-free scream. Three, two, one. We're debt-free! Yeah, baby! That's how you do it right there. It's amazing to me that what Henry Ford

said is true. If you think you can, or you think you can't, you're right. I'm stuck in my student loans. I'll never get out. I hope the government forgives them. Be a long wait, darling.

Instead, you just need to do what those guys did. Buckle down. Knock it out. That's a long time. Six and a half years. That's so impressive. What studs. Those kids can do anything from this point, man. Anything.

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Doing nothing for others is the undoing of ourselves. Gilbert is with us in Denver, Colorado. Hi, Gilbert. How are you? Good afternoon, Dave. Thanks for taking my call. Sure. What's up? Well, I'm currently reading your book, The Total Money Makeover,

and I'm about halfway through it. Very, one of the best books I've ever read so far. Wow, thank you. Yes. I'm 50 years old and I'm single. And just a question for you. I have a rental property. I owe on the rental property about $118,000 currently.

It consists of several rental properties, and I generate about $2,700 a month off of it. My payment is $1,700, so essentially I make about $1,000. I put that money away, obviously, to reinvest in the business, preventative maintenance and things like that, because there's always things that go wrong. I also have a 401K, probably about $150K in there right now, and I'm currently employed warehousing, and I make about $45K a year.

My question is, do I sell the property? Which, if I did, it would be about a half a million. Is it one property? It's consisting of several properties. How many? It's five rental properties. Five rental properties. So roughly $100,000 each average.

Correct. Okay. Is there one that is your least favorite that would almost get you out of debt? It is. They are subdivided, so yes, there is one. Are they all contiguous? Yes, they're all on one loan is what it is. No, no, I mean are they all like in a row on the street?

Yes. So they're all together. They're not five properties dotted around different places in town. No, they're all right there within the area. Okay. But like right down the street, so to speak. Okay. Correct.

All right. Well, here's the thing. I'm not going to panic about this. It's running itself for right now. I do want it to get paid off, and I do want your 401K to get beefed up, but you've got 15 years to do all of this. What about your personal residence? What do you owe on it?

It's essentially attached to this loan on the properties. Okay. And you live in one of the properties? Correct. Okay. All right. I do, but I don't have a mortgage, to sort of say. Yeah, well, you do.

It's a blanket mortgage is what it amounts to. So, well, you're debt-free except your home and your rental property. Is that correct? That's the only debt that I have. And you have an emergency fund set aside, a personal emergency fund of three to six months of expenses. Correct. Okay. Then I would be putting 15% of my income into retirement, into your 401K,

out of the $45,000 working money adding to your 401K. And above that, everything I can find, I'm going to throw at this debt because that's baby step six. Okay. And as baby step six, we're going to clear this off. So, you know, we're talking about your cash flows on the rentals and anything we can squeeze out of your monthly budget or any other money that just happens to come your way, a little small inheritance or a big inheritance or a bonus or anything that shows up. Just money. or a big inheritance or a bonus or anything that shows up, just money, we just throw it at this because I'd like to look up in five, six, seven years and just go ahead and have this knocked out.

Correct, yes. But would I panic to do that and sell everything? No. I didn't hear in the verbiage that you were using that you don't like these properties. I kind of thought I was hearing you do like these properties. I do. Yes, I do. Okay. And they are doing well.

Then I would hold them and just let's just, but let's just focus on past 15% of your $45,000 going into your 401k. Any other money I get, let's just chunk it on there. Let's just say, how quick can I pay this debt off? mean you know if we pay off twenty thousand dollars if we pay off uh i'm sorry uh forty thousand dollars a year between the different things on the things you'd be done in about three years if you pay off thirty thousand you'll be done in about four years okay you know and just kind of start thinking it through that way and saying, hey, I'd like to be 55. And just look out there and run some math and let's set a date certain out there and start aiming at it

and doing the things we need to do to be able to hit that date certain. I don't know. I'm just making the numbers up here. But I don't know, 55, 56 years old, I'd like to have these things paid for. I think it might be fun. Yes, that's what I'm shooting for, $55,000. Yeah. That we paid.

Very cool. Good, good. All right. Yeah, let's have a date certain and give her a run. But, no, I wouldn't sell them in that case. It's a baby step six issue, and you like them. They're solid properties. You think they're a continued good investment.

You're going to continue to push it through. I'd keep it and work it through. Aaron is with us in Detroit. Hey, Aaron, how are you? Pretty good, Dave. How are you doing? Better than I deserve. What's up?

Well, I got a $150,000 mortgage right now on my home, and I could pay it off right now, but I was wondering what advice you could give me if I should pay that off or if I should invest that money into a mutual fund. I'm 34 years old. What's the house worth? The house is worth $220,000. Okay. If you could borrow $500,000 against it, would you do that to invest?

Probably not. What's the difference? I guess there's no difference on that. Made you feel the risk is what it did. Yeah. And we've done detailed research. 100% of the foreclosures occur on a home with a mortgage. There's risk when you have a house mortgage. And so you're sitting on the money right now to pay off your house.

How much money? About $150,000. You can write that check without getting into your retirement account. No, I'm not getting into my retirement account. So you have $150,000 in your checking account. Between that and some stocks. Yeah. I'd be debt-free by the end of the day, dude.

Let's try it another way. If your house was paid for, would you go take out a mortgage in order to invest it in mutual funds? No, I wouldn't. Same exact thing, isn't it? These aren't trick questions they just make you think with a different part of your brain where you feel the risk and because the part of your brain you've been using is only math part and the math part says if i can borrow money at three and a quarter or three and three quarters and i can invest in a mutual fund make 10 or 12 i ought to do that but that does not incorporate risk into the situation and so i've learned over the years i you know i like making

money and i like math equations and all that kind of stuff but i like that the borrower is slave to the lender and so i like not having a master and it changes the decision-making patterns in other areas of my life, and it's caused me to prosper beyond my wildest dreams to not have any debt of any kind anywhere. And something, Aaron, the day you pay that mortgage off will snap inside of you, and you will never go back. You're going to go, man, I didn't even know you could breathe this deeply. I didn't know you could feel this way. And if I'm wrong and you

hate being debt free well just go take you out of mortgage and you can put the money into a mutual fund or into some stocks again if i'm wrong but you and i both know i'm not wrong uh you know over the 30 years i've been doing, the borrower is slave to the lender. When I very first saw that, I thought it was almost like physical slavery, almost as if I was owned by someone else. That's how it felt because I was so broke I couldn't breathe. I was so stupid. I'd gotten myself into such a mess.

I mean, Aaron's in so much better shape than I was in. He's so stupid. I'd gotten myself into such a mess. I mean, Aaron's in so much better shape than I was in. He's so smart. Now, I mean, that first thing I got was just away from the physical slavery. Then I started looking at the math, and I thought, wow, you know, I don't have any risk, and my investments are freed up because when you don't have a car payment, you invest a car payment. That'll make you millions of dollars. And then I started looking at the relational aspects and the health aspects. Because your relationships change when you don't have any debt.

And your health changes when you don't have any debt. And, and, and. That puts this hour of the Dave Ramsey Show in the books. We'll be back with you before you know it. In the meantime, remember, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus. Hey, it's Kelly, Dave's phone screener. We finished 2017 with a bang as the fourth most downloaded podcast of the year. Thanks to all of you for listening and helping us spread the word.

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