The Ramsey Show - App - How to Navigate Retirement When You're Self-Employed (Hour 2)

Episode Date: August 15, 2019

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

🎵 Live from the headquarters of Ramsey Solutions Broadcasting from the Dollar Car Rental Studios, it's the Dave Ramsey Show, where debt is dumb, cash is king, and the paid-off home mortgage has taken the place of the BMW as the status symbol of choice. I'm Dave Ramsey, your host. Thank you for joining us. Open phones at 888-825-5225. That's 888-825-5225. Allison is in North Carolina starting off this hour. Hey, Allison,

welcome to the Dave Ramsey Show. Thanks, Dave. Thanks for taking my call. Sure. What's up? First of all, I want to say thank you because my husband and I had just become, I guess it was just expected that we would pay on our mortgage and our student loans for 30 years, and it wasn't causing a problem. But I discovered you about a year ago in about November of last year. I said, let's just not do things out. And so we got on a budget, and at the end of the year, we will be done with all of it. And that's a feeling but yeah so now i have um we have a very small family but i do have a nephew and three nieces so four nieces and nephews and they have not been as fortunate as us for a variety of reasons

um uh the the family um sometimes struggles um and has had some real unfortunate events happen. We'd like to be able to save for their college. We've got our two kids taken care of. But the question has come up now that we can do this, how can we save for four other colleges in a way that doesn't impact their ability to apply for financial hardship or financial aid, need-based financial aid, which they probably could qualify for. So we were worried about putting things in their name, such as a 529 or something like that, if it might impact that ability. Just wanted your thoughts on how the best way to help them.

And, of course, we want it to go toward education of any sort, really, but not just, you know, here's a bunch of cash, but toward education purposes. Just build wealth in your name and if you get ready when they get ready to go to school if you agree with the decisions and the process and you want to give them some money for school you'll have the money and just give it as a gift yeah don't just go pay for you know i'll pay for your first two months of our first two quarters of tuition uh tuition or i'll pay for your first two quarters of tuition, or I'll pay for your tuition all the way through. But you're going to make decisions, if I'm gifting you, that I think are good for you. Right.

And so I'm not going to give you $100,000 and you go $100,000 in debt. That would be me enabling your stupidity. That makes sense. Yeah, I would just keep it all in your name you drop it into a 529 it's completely in their control it is an asset and it will affect their pell grants which is what you're worried about and so um and what you've got apparently is a family that's not only had some tragedy but has also um been willing to make bad decisions pretty regularly. Well, you know. Yeah, they're family, I know.

But, I mean, so the point is you don't want to put yourself in a position that you are trapped because you put the money in the kid's name into participating in one of their bad decisions because you just don't have control like you do with your own kids. So if I were in your shoes, I would just, you guys go about the business of building wealth and when they get to that age, if you still have this itch to help them with school, which is a wonderful thing you're offering to do, then you would decide the parameters under which you would do that, write the check directly to the school when you get ready to do that.

But you just have a pile of money in your mutual funds that allow you to do some nice things for people that you love. It's that simple. Okay, that does sound simple and nice. Thank you. Thank you. I appreciate what you're thinking of doing. It's a wonderful, wonderful thing. Donnie is with us in Indiana. Hi, Donnie. Welcome to the Dave Ramsey Show.

Hey, Dave. Thanks for taking my call. Sure, man. What's up? Hey, all right. My question is in regards to my company, 401k. My company matches up to 6% of my income. Awesome. I'd like to contribute up to 12% in the future, but I wasn't sure if I should add the additional 6% into the 401k plan that they give me, or if I should put this into, like, a personal account and go through, like, mutual funds. You don't have a choice. When they match you in a 401k, it goes into the 401k. Yeah.

I'm talking after the 6%. So instead of adding the additional 6% to make it 12%. I see. In the long run, what would be a better option for me? When we're on baby step four, what we teach folks to do is to invest 15% of your household income into retirement. The order of attack, which is what you're asking about, we always laughingly call it rock, paper, scissors, except it doesn't go but one way. In other words, what's the order? Match is the best.

Next best is Roth. Next best is traditional. All assuming good investment options into good mutual funds. So does your 401k at your company offer a Roth option? Yes, that's what I'm currently in. Good. Okay, then I would do at least 6% into your 401k Roth. Are the mutual funds good choices?

The thing is, when I did the research on them, there wasn't very much information on it. So I just know if I did the research on them, there wasn't very much information on it. So I just know if I do it on the side, I'm able to find better mutual funds, like after listening to your show. Okay, that's fine. So you could do 6%, and are you married? Yes. Okay, then you could do a couple of Roth IRAs, $6,000 each.

If you're over $50,000, $6,000 each. If you're over $57,000 each. And if that doesn't get you to 15%, then you've got to put some more in your non-matched 401k questionable mutual funds. But all of that is where you're going to stay. You should be able to get to 15% with the combination of those things. Okay. But it's

match to Roth to traditional. And then the tiebreaker with you is you think you can get considerably better mutual funds in the open market. So after your match, you're going to roll out and go into individual Roth IRAs, and if that two Roth IRAs does not get you up to 15% with your 6% going in, then you'll go back to the 401k and add a little in until you get up there, okay? Yep, awesome. Thanks for the call, man.

Appreciate you joining us. Good question on the clarification of that baby step four stuff. Folks, I got to tell you, it's so encouraging to me to hear you guys ask those kinds of questions, and here's why. As we studied the 10,000 millionaires that we studied for chris hogan's book the everyday millionaire number one best seller how ordinary people build extraordinary wealth and how you can too we discovered not that the 11 million millionaires in america inherited their money not that they were crooks and stole it from the little man but that they filled up

their 401ks and they paid off their house in an average of 10.2 years. Those two financial moves move people into millionaire status. With the opening of Ramsey Solutions headquarters today, we've got a lot of folks out here visiting us and watching the show for the first time from this particular studio i've already met in our studio audience in the first hour walking around four everyday millionaires and all four of them did it with 401ks and paying off their homes all four of them they all said hey dave i'm an everyday millionaire they never cheer about it they just kind of whisper it to you. You know, because they don't really look like millionaires.

They don't feel like millionaires. But they are. Isn't that cool? It's pretty cool. This is the news, guys. You need to stop and listen. The Fed decided not to raise interest rates. That means you've got a small window of time before rates rise again. Here's the deal.

Most people are paying too much interest on their largest expense, their home. So you're freaking crazy if you don't take 10 minutes to call Churchill Mortgage right now and see if they can save you money before rates rise again. A mortgage through Churchill could save you thousands, or better yet, reduce the time until you're debt-free. Can you imagine how it would feel to no longer have that payment looming over your head every month? Just go to ChurchillMortgage.com or call 888-LOAN-200. Their team of experts will give you more clarity about your options and more peace knowing you're saving significant money in the long run.

Call 888-LOAN-200. That's 888-562-6200 or churchillmortgage.com. Well, just reading over this, the scale of this blows my mind. Listen to this. Financial Peace University, I've been teaching it for 25 plus years now. We've had over 6 million people go through the class. You've heard me talk about that. So for the month of August, to celebrate the 25-year anniversary, we decided to challenge people in Baby Step 2.

Those of you that are paying off debt. We put out the financial peace challenge. No purchase necessary. You just go to the website and say, I accept the challenge. And the challenge is to pay off $1,000 or more of your debt in August. That simple. Okay? or more of your debt in August. That simple. Okay?

If you accept that challenge, you can go to DaveRamsey.com or, you know, slash FPU and slash payoff and accept the challenge. Here's what's happened, though. Listen to this. We started this at the first of the month, and we already have 100,000 people committed to the challenge. Now, I'll help you with the math on that. That's $100 million in debt paid off in August or more just due to the people signing up for the challenge.

$100 million in August. Wow, that scale. Kind of gives you a little bit of a chill, like maybe we ought to tell Congress about this. Wow. I'm telling you, that's a lot of people. Now, here's what we're doing. We're going to give away four of the people in the challenge, just random drawing, four of those people, $2,500 cash. There's no purchase necessary.

It doesn't cost a thing to be in the challenge. Just go to the challenge and sign up and if you're in the challenge and you promise to pay off a thousand dollars or more in august out of those hundred thousand people we're going to draw four and give them give each of them four thousand or two thousand five hundred dollars a total of ten thousand dollars better get these numbers right yeah And so the cool thing is this. Matthew is with me from Ohio. And Matthew, you're our very first $2,500 winner. Congratulations.

Thank you very much, Dave. That's phenomenal news for me today. I love it. That's very cool. So you're obviously in Baby Step 2 because you signed up for this challenge. So I'm guessing the $2,500 gets thrown at a debt. Am I right? Yes.

The only thing we have left is a small home ec line. Cool. Very cool. And how much is left on it? Well, I say small, like $19,000. But we started out at almost a quarter million dollars in January of 2018. Well, congratulations, man. What was your reason, your why, that you guys got so on fire?

Because you paid off a bazillion dollars. Man, that's impressive. Well, it was right after Christmas, and we've always been, we both grew up kind of poor, and we've both been, Hey, we got a good name, good signature. We can buy it on credit. And I was out with the wife one day, it was right after Christmas. And she said to me, I don't know what the money that you make, why we always don't have any money. And I started looking at it and we took FPU like 10 years ago. And I started looking over the numbers and stuff. And turns out we were just given all the banks, as you say, all the money to buy their new furniture with. So I started looking at our budget and I always write our budget out two weeks at a time

for every paycheck and just started liquidating everything. We had a rental house I sold, which was $165,000 worth of our debt. I had a travel trailer. When I sold that, I don't need a $50,000 truck to pull the travel trailer. There's always that. Got rid of everything. Got rid of my truck. Traded it in on a 2015 Hyundai, which we just made our last payment on this past month. Wow.

For August. Wow. So you're almost there. Wow. For August. Wow. So you're almost there. We're almost there. Congratulations. I'm so proud of you, man. Thank you so much. Thank you for entering the challenge, and I'll put you on hold.

We'll make triple sure we have all of your information so we can get that $2,500 right out to you, plump it down on that $19,000 HEL, missing just one L, and we'll get rid of it. There we go. Love it. Way to go, man. Way to go. Folks, if you're all in on getting out of debt, you can still join the $1,000 payoff challenge. We're going to give $2,500 randomly to three more people who commit to the challenge.

We're just going to draw a name out of the challenge and call them, and if we can get you on the phone, we're going to give it to you. If we don't get you, we'll call the next one on the challenge. We're just going to draw a name out of the challenge and call them. And if we can get you on the phone, we're going to give it to you. If we don't get you, we'll call the next one on the list. But that's simple. So go to DaveRamsey.com slash payoff. No purchase necessary. Again, that's DaveRamsey.com slash payoff. You know, if you're in the process of changing your life,

you're in the process of getting out of debt, you've had an I've had it moment at some point where you just said, we make too much money to be this broke. That was Matthew's wife. She goes, where's our dadgum money? We make a lot of money. We have nothing.

All the money comes in. All the money goes out. Not only the names are changed to protect the innocent, we have nothing. We work our butts off and have nothing. We changed to protect the innocent we have nothing we work our butts off and have nothing we make a lot of money and have nothing and you just reach this healthy level of disgust and say we make enough money to change our whole family tree and we're giving it all the bank i've had it i'm not doing this anymore when you have that happen deep down in your soul, in the marrow of your bones, now you're ready to change.

Lucas is with us in New York. Hi, Lucas. Welcome to the Dave Ramsey Show. Thanks for having me. How are you, sir? Better than I deserve. What's up? Well, I need some help determining whether to keep or sell a rental home that I've had for about 15 years. It just seems like I'm losing money every month,

and I'm having trouble figuring out why I'm keeping it, why I'm going down this road. There's nothing in this conversation fun, is there? So why would you keep it? Well, I have an idea that it's going to be a good investment 15 years from now. Nah. Nah. Not if you're losing money every month it's not

um so it's not worth the pain uh you can do other things that'll be good investments 15 years from now and you'll enjoy the time you own them rather than painfully walk into this so obviously you owe almost as much on it as it's worth so it won't even rent for enough to cover the payments right yep you're on it okay yeah this is more of a liability than it is an asset. There's not much equity here anyway. Nope. Yeah. And you're just, I don't meet millionaires that use that method to become wealthy.

Mm-hmm. And I love real estate. If you've listened to me 20 seconds, you know that. I own a bunch of real estate. Mm-hmm. And I just think it's wonderful. But paid-for real estate cash flow is like a dad-blame bandit, you know? But leveraged real estate takes all the fun out of it, and that's where you are.

So, yeah, I would dump that thing. Now, Dave, what would you do with the proceeds from it? Of course, there's going to be capital gains to consider. As another investment engine, where would you move it? How much proceeds do you anticipate? So I owe 90. It's worth about 190, so about 100K. And it won't cash flow?

No. That's weird. Well, I think the market isn't a great market. It is to own a house and live in your house, but it's not a great market to own a rental and rent it out. Gotcha. Okay. And how much – what did you pay for the property originally? Paid $165 15 years ago.

And you've been depreciating it 15 years, so your adjusted basis is probably below $100. Yes. Okay. And so you're going to have taxes on about 100 give or take uh and on capital gains rate of 15 do you make over 400 a year household income no so your capital gains rate is 15 so we're talking about a 15 000 tax bill okay and then if you take net of taxes your proceeds i'm going to apply them wherever you are on your baby steps do you owe money on your home well i guess that's the other part is I move every four years, so this is the only home that I have. So you're renting for your residence?

That's correct. Okay. All right. And do you have any other debts at all? Nope. I'm on baby step six, and I'm starting to pay off this house. Okay. And that would be baby step seven then. Yeah. Okay. How quick can you pay it off? Based upon what I hear from you, two years. I'd much rather do it in three, but if I really

did your rice and beans, two years. Okay, if it's a soft rental market, is it also a soft appreciation market, not appreciating well? That's correct. The prices are rock solid. They don't go up fast? No, they don't. Okay, yeah, let's go ahead and dump this thing. Not appreciating well? That's correct. The prices are rock solid. They don't go up fast? No, they don't. Okay. Yeah, let's go ahead and dump this thing. And if you want to move it into a different property, you could do a 1031 tax deferred exchange if you want. It costs you about $1,500 to do an extra closing where you can roll the proceeds into another rental property and pay no taxes on it.

And then pay that rental property off. But let's buy one that's going up in value and that the rents are exciting. This is the Dave Ramsey Show. We've been voted one of the best places to work in Nashville 11 times. You want to know how we do it? Well, our team has been using LinkedIn jobs for years to find the best people from all over the country to come and help us change lives. Think about it. LinkedIn has more than 600 million active members. I'm talking about people who come to LinkedIn to make connections, grow their careers, and discover new job opportunities. In fact, 90% of LinkedIn users are open to new opportunities, but not actively scanning job boards. This means LinkedIn Jobs gives you access to an entirely different demographic. Don't wait.

One hire can change the direction of your company. Post a job today at linkedin.com slash Ramsey and get $50 off your first job post. That's linkedin.com slash Ramsey. Terms and conditions apply. Thank you for joining us, America. We're glad you are with us. This is crazy. Did you know we've got over 250 technology folks on our team? 150 developers here at Ramsey Solutions.

And the code that you write when you're a code writer on our team, when you're a coder, it changes people's lives. It changes everything. So we're on the hunt for some more key developers and technology leaders. We need some front-end technology folks, some Ruby folks, some Java folks, some Salesforce folks, and we need you now. I'm not sure what an object-oriented developer is, but apparently we need one. And our developers are weird, you know. A lot of developers are weird, but ours are weird. You

know what's weird about our developers is they go home to their family at 530. Most developers work 80-hour weeks. Companies just drain the blood out of their souls. And we've got this weird idea that you should not be divorced, that you should go home and see your wife or your husband. It's strange. I know. We're different stuff.

But, yeah, that's one of the reasons we're voted best place to work 11 times here in Nashville, because we're the best freaking place to work. So you can see all the jobs available at DaveRamsey.com. Click the Dave's Hiring tab on the right-hand side of the homepage. We've got a lot of marketing exec-type positions open, a lot of sales positions open, a lot of positions open. We'll hire about 200 folks this year. And the weird thing is we have room for them in our new building, so we'd love to have

you join us at the new headquarters. Samantha is with us in New York. Hi, Samantha. Welcome to the Dave Ramsey Show. Hi, how are you? Better than I deserve. What's up in your world? I have a mortgage at a 5.125% interest rate, and I'm looking to refinance it to about 3%. And they offered me that I can take out $30,000 to cover my student loans.

No. They said it would be about the same payment, and since I'm still in school, I can't really pay for the student loans. I'm cash-flowing the rest. Right, good. No, I would not put your student loans into your home. Here's why. Number one, if you pass away, your student loans are forgiven. Number two, if you are disabled, your student loans are forgiven. Neither of those

happen with your home mortgage. And so when you take the student loans and put them on your home mortgage, you've added a risk to your life and you have no gain here whatsoever. So you have $30,000 in student loans. When will you graduate? In May. Oh, cool. With your degree in what? Special ed. Good. Okay. So what will you be making? Refinancing and spending $60,000. Good. Good. Okay. So then we just roll up our sleeves and get on a budget

and get about the business of paying off $30,000. But no, I would not refinance your student loans into your home. Nope. Thanks for calling. Ronnie is with us. Ronnie's in New York. Hi, Ronnie. What's up?

Hi, Dave. How are you? Better than I deserve. How can I help? I'm good. So I have a kind of a situation. I'm officially debt-free and scared out of my mind, and I don't know what to do with myself now that- Why are you scared? officially debt-free and scared out of my mind. I don't know what to do with myself.

Why are you scared? I'm afraid to spend anything. I have 4K saved in my emergency fund. You have 4K? What in your emergency fund? $4,000. $4,000. Okay.

I have currently $6,000 in my checking. Mm-hmm. So I just don't know what to do with myself now that I am debt-free, and I'm scared to literally spend any kind of money. Okay. Well, the only reason you would be scared to spend money is if you didn't trust your judgment. Right. And you're afraid you're going to make a mistake and end up in a hole, okay?

Exactly. going to make a mistake and end up in a hole okay exactly and so that's why we laid out the process a good personal financial process called the baby steps and baby step one save a thousand dollars you've done that two is debt free you've done that three is a fully funded emergency fund of three to six months of expenses you have not. Okay. So we need to move some money out of checking. Move the money out of checking into the $4,000 savings account. And if you had $10,000 in there, would that be equal to three to six months of expenses? Yes. Okay.

Check that box. Okay. Baby step three is done. What comes after three? That's saving for the retirement. Four. Yeah. done what comes after three um that's uh saving for the retirement four yeah and right after three comes four and baby step four is 15 of your income going into retirement so see you do know what to do i'm just so scared i don't want to i don't want to be back uh where i was when i first called you

and i was a wreck yeah well the good news is you have taken control of your life. You know what? I think you're better than you feel like you are. I'm nervous. I know. I know you're nervous, but because you're new at this. The first time you drive a car, it's new to drive a car. And the first time you handle money well, it's new to drive your checkbook properly and without wrecking it and running it in the ditch.

And you are doing a great job. How old are i'm 30 okay all right and the first time in your life in the last six months you're in control right right i'm proud of you well done thank you yeah i think you're better than you feel like you are you know that's the funny thing about momentum hey thanks for the call you ever had to notice that about momentum when things are really really bad i mean everything that can go wrong is going wrong murphy is living there your life looks like a country song everything's horrible you got really negative momentum you know what i'm saying did you know in that moment when it looks like the world is falling apart that you are actually better than you look?

Because no one sucks as bad as you look at that moment. You know, you look horrible at that moment. I've been there. I was better than I looked with the day I filed bankruptcy, but I was at the bottom, right? And did you know when everything's going great, and you got momentum, and everything you touch turns to gold, you seem to have the Midas touch. Everything, you're in a zone, baby.

Did you know you are not as good as you look then? Like right now, I'm kind of in a zone. Just moved into this new building. We're all kind of jacked up. It's like Christmas morning for a thousand people around here. We're having so much fun. You guys are all impressed with us everything's good i mean only the worst of the trolls are mad today at ramsey right

but um life is really good you know we look so good i got a secret for y'all we're not as good as we look right now because we got so much momentum that we look better than we are we're good but we look better than we are because it're good, but we look better than we are. Because it's pretty shiny right now. That's the way momentum works. You either look better than you are or you look, you know, you're better than you look when things are down. So that's your case, darling. You're in that exact situation.

You're turning this for the first time. You're turning this flywheel over, as my friend Jim Collins talks about. And you're starting to get the momentum starting to get this thing moving and your emotions and your confidence hasn't caught up with your competence you're better than you look and that's where you are i'm proud of you i think you're doing really good hey thanks for calling in again and you call anytime We're here to help you. Open phones at 888-825-5225. Matt says, should my wife put 15% into one single 401k account if we jointly own a business? Doesn't matter. When you're married and get a divorce, you've got full access through the divorce proceedings to your spouse's retirement plans.

They're not protected from your spouse. They're protected from creditors. They're protected from a lot of other stuff. But they're not protected from your spouse. So if your husband has $1 million in his 401K plan and you have zip, you get divorced, you'll get half of it probably, most states anyway, most judges. And so you, when you are married, even though it, probably. Most states, anyway. Most judges, right? And so you, when you are married, even though it is not in your name,

if the household has a retirement plan, you have a retirement plan. So you're fine if she puts 15% in a single 401k plan, and you jointly own a business, that's fine. And you can do other stuff. You can do individual IRAs. You could do Roth IRAs individually. You can do a simple IRA at your little business that you own. Any of those things is fine.

You'll be just fine either way. But you're protected. It doesn't matter whose name it's in. The law usually takes care of that. It's one of the reasons we tell people the beauty of marriage. This is The Dave Ramsey Show. thanks for joining us america david is in texas welcome to the dave ramsey show david thank you very much how are you today better than i deserve how can i help well i'm 70 years old and my only debt is my house uh the question is should i pay it off how much do y'all want it 130 how much is in your nest egg

well i have quite a bit saved up for a project i want to build a garage workshop so that's kind of dedicated to that. But I'm already budgeting extra payments, and I've also budgeted a pay down account. So I've got extra money that I am putting toward the house. It's going to still take me a long time to pay off the house. So you don't have a nest egg? Oh, yes. I'm retired. How much is have a nest egg? Oh, yes. I'm retired.

How much is in your nest egg? Well, you're talking about the whole thing? About half a million dollars. Okay. And so if you wrote a check and paid off the house today, you would have $400,000? Well, it's being doled out at this point with the minimum required distributions. I know, but it's sitting there, and it would be doled out at a lesser rate because you would have only $400,000 instead of $500,000, but you would not have a house payment.

Mm-hmm. And you have other income other than your nest egg? Well, I have three retirements. Are you living on those without touching the nest egg uh well as i say i'm getting my minimum distributions but i am living on the other stuff yes okay so uh but i mean your budget your how you can exist if you didn't touch the nest egg just off these three retirements couldn't you yes yeah so i would write a check today and pay off your house out of your nest egg okay definitely a hundred percent chance of that

and uh i'd rather have four hundred thousand dollars with a paid for home than five hundred thousand dollars with a hundred and thirty thousand dollar mortgage a hundred percent of the time and uh because you the point is we're not putting your ability to live in jeopardy by doing this. Instead, we are enhancing it. We've stabilized your whole environment. There's nothing left for you to do except invest and enjoy and be generous. And that's the best parts of money. Hey, thanks for the call.

Morgan is with us in South Carolinaolina hi morgan welcome to the dave ramsey show thank you mr ramsey for talking with me sure so we actually sold our home about three hours ago and got a check for twenty eight thousand dollars wow we have um we have about in quick calculations about fifty two thousand in car and just general other small debt from being stupid with our money before. My question is, should I take that $28,000 that I got to check for today and do the baby steps and pay off the smallest debts first? Or should I take the $28,000 and pay off my car that we're upside down on, get it out of the way so that I can knock the other small debts one at a time and follow the baby steps?

Where are you living? We are living with my mom. Until you get this done or what? We would like to get this done and spend probably the next year saving up money so we can buy some land and build. Gotcha. How much do you owe on your car? About $28,000 right at there, so it would take up the whole amount.

Gotcha. And what's the car worth? Probably $25,000, $24,000. And what's your household income? Together, we're probably $120,000. Okay. I think living with mom to get out of debt is called an extreme measure. Mm-hmm.

Well, mom is not in the house at the moment. We're just living in her home. Well, that's helpful. Okay. Yeah. So it's not as extreme a measure. Well, mom is not in the house at the moment. We're just living in her home. Well, that's helpful. Okay. Yeah. So it's not as extreme a measure. Because, you know, when you're an adult making $150,000 a year and you move in with your mother, that's just hard.

That's humiliating. Yes, sir. Now, you didn't. In this case, you moved into her house. Okay. And so that's a little better situation. So she has an empty house she can let you live in until you get this done. Yes, sir.

Okay. If she were living there, and we were talking about the humiliation of that, because it is, if you make that kind of money, that's humiliating to live with mommy. And so I would sell the car in that case uh instead of paying it off and uh get me a hoopty because i would be more concerned about getting this mess cleaned up and getting out of there than i would having a 25,000 car um but you make a good amount of money if you love this car and you want to keep it. I would just work the debt snowball with the proceeds from selling your home, and then let's just take this great income and knock the rest of this out.

Do you love the car? I do. I do. What is it? It's now, I've made a, you want to, like you're going to roll over in your chair and probably fall out of it. I've been driving 17 years and had like 18 cars, and none of them have been new. I've learned a lot of stupid stuff from listening to you.

I will never do this again. We're driving this car until it dies. Okay. So what is it? What is it? It's a Honda Odyssey van. Okay. They're very nice.

Yeah, it's got a video for the children. So here's the thing. We take $28,000 and you pay down your first $28,000 in debt, which leaves you with the Honda Odyssey, basically. Correct, yes, sir. And then you're just going to beat on that thing aggressively with your income. You ought to be done in about, what, nine months? I'm going to be very ambitious and try for the first of the year yes sir okay i'm with you so so either way whether you did it the paid off the car and then work the little debts or you pay off the little debts and pay off the car it's going to end up being the almost exactly the

same math isn't it yes sir yeah so let's just work let's just work yeah let's just work the debt snowball, and then we have one monster sitting there, and it's called Odyssey, and we kill, you know, it's an odyssey. We're getting out of debt. It's our epic odyssey. I love it. Yeah, that's what I would do.

I'd just pay it off as fast as I could, work your debt snowball in order. Good call, and congratulations on just how you guys are plowing through this. You're doing very, very well. Carolyn is with us. Carolyn is in Illinois. Hi, Carolyn. Welcome to the Dave Ramsey Show. Hi, Dave. Thanks for taking my call. Sure. What's up? Okay. I am 43 years old and do not have a retirement account. I've been self-employed for about 22 years, was married, and then got a divorce about five years ago. I'm about to open a business with four partners. We're going to open a daycare center, and I wanted to know what would be the best way to start a retirement account. Okay Well I mean you can certainly do a Roth IRA And good growth stock mutual funds

So you're out of debt and you have your emergency fund in place right? I'm almost out of debt I do have my emergency fund I have one more smaller debt to pay off Okay how much is in your emergency fund? One thousand Okay so you have your starter emergency fund. Yes. So you're on baby step two and you have the small debt and then you're going to build your emergency fund of three to six months of expenses, right? Right.

And then we're going to start talking about this retirement and your first and you said you're 42, right? So you can do $6,000. 43. Until you're 50, you can do $6,000. After? So you can do $6,000. 43. Until you're 50, you can do $6,000. After that, you can do $7,000 in a Roth IRA in good growth stock mutual funds. Click SmartVestor at DaveRamsey.com. It'll drop down a list of the SmartVestor pros in your area that we recommend. Sit down with one of them. Get that going.

Beyond that, to get up to 15% of your income going into retirement, you would need to do some other things. At the business, you can do, how many employees do you anticipate having? About 20. Okay. You can offer what's called a simple IRA. And what a simple IRA is, is a very inexpensive 401K for small businesses like yours. It doesn't cost hardly anything to manage. It's $15 a year management fee.

Okay. And basically, you can just go with, again, with one of the SmartVestor Pros, and they can set that up. And you can do, you know, it works with the same limits of a 401K. So, you know, in 2019, you same limits of a 401k. So, you know, in 2019, you're allowed to put $19,000 a year in there in addition to the six. Now, there's, you know, requirements that you match up to 3% with your employees. But that's a wonderful, inexpensive way to offer a retirement plan to your company and to yourself. Simple IRA after you've done your regular Roth IRA.

And you can do it in a Roth version. This is The Dave Ramsey Show. This is James Childs, producer of 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.