The Ramsey Show - App - If You Can Beat Addiction, You Can Beat Debt (Hour 2)

Episode Date: July 21, 2022

Dave Ramsey & George Kamel discuss: Using a HELOC to pay off debt, How much is enough for a down payment, Getting started on the Baby Steps, A former addicts fear of paying off debt, How much is too much to put in a pension, If crypto should be a part of your portfolio.   Want a plan for your money? Find out where to start: https://bit.ly/3nInETX Listen to all The Ramsey Network podcasts: https://bit.ly/3GxiXm6

Live from the headquarters of Ramsey Solutions, it's the 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. We help people build wealth, do work they love, and create actual amazing relationships. George Campbell, Ramsey Personality, host of The Fine Print and the Entree Leadership Podcast, both on the Ramsey Network. Be sure and tune in. We're here to help you. The phone number is 888-825-5225. Melanie is in Omaha, Nebraska. Hi, Melanie. How are you? Good afternoon. How are you? Good afternoon.

How are you? Better than I deserve. What's up? Okay, so I am the geek in my marriage, and I also work in the banking industry, and I am stuck. I can't make a decision, so I need you to help me. We can help. We have an opinion, I promise. I don't even me we can we can help we have an opinion i promise

i don't even know what it is but we have an opinion i'm sure yeah okay so we were doing really really well about four years ago and then just this last spring hit us really hard and kind of put us upside down so i am trying to decide whether or not to get a HELOC and I'm thinking about doing it for the purpose of consolidating high interest rate debt. My pros are a lower interest rate to knock out credit card debt with higher interest rate and then beat the system. So what I'm going to do is I'm going to throw down principal payments before the end of each billing cycle to make the debt go down faster and then less interest will go towards what the HELOC is. My cons are right now my current DTI is 55%.

It needs to be below 45% to qualify. In order for me to do that, I will have to tie in a car loan that we acquired this year, but that car loan is at a fixed 4.75%. And with the way that the interest rate keeps going up with Wall Street, I don't know if putting that car loan over into a HELOC is a smart decision or a dumb decision. But I was able to call the credit card company yesterday and negotiate that 24.99% down to 16.99% for a year only. What would Dave do? What's the balance on the car?

The car is $45,000. What's your household income? So this is going to be a little finicky. Together, my husband and I make $105,000 a year, but I have a side job that's kind of under the table, and I can bring in an extra $40,000. Okay. And how much credit card debt do you have? 15. Okay. What other debt do you have other than your house? Um, so we literally drove both of our cars until the wheels fell off and it happened exactly a month apart this spring. We made a family trip to go down to Texas to see some family down there. And it happened exactly a month apart this spring. We made a family trip to go down to Texas to see some family down there. And I kid you not a week before we went, the engine blew in our 2012 Traverse. And I tried everything I could to fix it. I used all of our expenses and then I ended up putting more money on the credit card, which is why it went up.

I got to the point where the mechanic was like, just stop. It's not going to happen. And I'm like, fine. So then we ended up getting that new Traverse, not new, but a used Traverse. And then our other car, which was a 2010 Pontiac Montana. I'm sorry, you have $45,000 on one car, $15,000 in credit card debt. And what other debt? We have another car with $45,000 on one car, $15,000 in credit card debt, and what other debt? We have another car with $15,000, and then our mortgage is $318,000. Okay. $318,000. Okay. No, you don't need a home equity loan. You need to sell a $45,000 car.

That's insanity. Yeah. You're broke. I know. You're trying to fix this with interest rates because you did a stupid but overpurchase because you were dromified. Correct. Yeah. So I'm looking at $75,000 worth of debt total, correct?

Mm-hmm. Outside of the house. Mm-hmm. So if we get rid of the car and we get you something reasonably, you know, a $5,000 car, that leaves you with about $30,000 left. What's the car worth? You have $15,000 loan on it. I'm driving it, and I'm going to take this $140,000 and clean this mess up on beans and rice, rice and beans.

You've got a great income. You don't have an interest rate problem. You have a lifestyle problem. Correct. Cut your lifestyle to nothing. Scorched earth. We had no car payments for six years scorched earth you don't need a car payment for six years you need to be out of debt in one year no we didn't have car payments for six years well until you lost your mind and then you went through then you went through the the crazy period of your life when you went crazy. And now you got yourself in $60,000 in car debt.

Yeah. A home equity loan doesn't fix that. Getting rid of the cars fixes it or getting rid of the debt fixes it. And you can't get rid of the debt soon enough to suit me if you keep the $45,000 car. So I'm moving way down in car. No vacations. No eating out. out scorched earth no spending on anything and 140 000 will pay off 30 000 inside of a year pretty easy actually

yeah are you guys doing any investing right now no okay do you have any money in savings? We did until we threw it all at trying to save that other car. Okay. So you don't have any money in savings right now? No. Okay. Well, let's get you $1,000 starter emergency fund. And after that, we're selling this car today. And beyond that, you got 140 grand income.

We're going to pay off 30. You're going to drive around and beat your car. And we'll clean this mess up real quick with that kind of income. Here's the thing, Melanie. You're trained as a banker in finance at some level in order to be in the job that you're in. And the thing that we're taught in academia is that interest rate is everything. And if we can simply cut the interest rate, we can solve all these problems. And so you called and negotiated 24 down to 16, 2499 down to 1699.

That was a good move, by the way. Excellent job. But here's the thing. Interest rate mathematically is irrelevant when you're going to pay it all off in one year. Correct. So the home equity loan doesn't solve anything. What the home equity loan does, it's very dangerous, is it moves everything over onto your home, and you feel like you did something, and you drag this mess out for five years instead of cleaning it up in 12 months.

Okay. All right. That's exactly what I was thinking. Yeah. But we've been going back and forth. The home equity loan is a form of denial. Yes. You're treating the symptom, which is the debt, instead of the problem, which is what caused the debt. go to zero cranking up the side hustle and cranking down life for one year and and you know undoing the big dumb decision which was the 45 000 car and it's painful people are gonna think you've lost your mind and what you're gonna wonder gosh man i'm getting rid of this car my my failure

you're not a failure you're just you just made a mistake and you're fixing the mistake i've done a lot dumber things than what you did. But this was dumb. It's on the dumb list. But you're not dumb. You just did a dumb thing. There's two different things. I'm not dumb, but I've done a lot of dumb things. And George is not dumb. Don't get me started.

Don't tell me how many dumb things he's done. But I haven't done the HELOC. That one never tricked me. Oh, I did HELOC. That puts your home at risk. Back in my old real estate investing days when I borrowed everything in sight, I HELOCed everything. And then I unlocked it and locked it again. This is The Ramsey Show. I just saw a study that really made me sad. It showed that families owning life insurance in the U.S. was at

its lowest point since the 1970s. After what we've been through the past few years, I'm just lost on how people don't make this more of a priority. How are you going to make sure your family needs are met if something happens to you? This is why getting term life is an absolute necessity. Rates have never been cheaper and the whole process to apply is pretty simple, with many companies not even requiring an exam anymore. This is why I send you to Zander Insurance, and I have for almost 25 years. They'll make sure you get the right protection at the lowest cost possible, and they're there for you and your family every day.

I challenge all of you to make sure your families are protected. It needs to be a top priority. Call Zander at 800-356-4282 or visit zander.com. That's 800-356-4282 or zander.com. Well, in 2020, house prices went up 29%. In 21, they went up 18%. This year, they're going to go up 8%. Next year, most people are predicting 4% to 5%. That means your old insurance policy may not have you with enough coverage.

Homeowner's insurance does not go up as the value of your house does unless you cause it to. So you need to contact your insurance agent and make sure you have enough coverage on your home. You might have a home that was $400,000 and now it's $600,000 and you don't have it covered but for $400,000. That'd be a bad thing if it burned, right? So you need to do this. Now, here's the thing. While you're at it, you might as well check with our endorsed local providers. They are independent insurance agents, which means they will shop around a bazillion different companies, get you the best price ever on your homeowners and your car for that matter and these pnc property and casualty agents so this is the way to buy it when you buy insurance

from somebody like state farm that's a captive agent they can only sell for one thing state farm so guess what they're going to tell you you should buy state farm state farm that's hard to figure out isn't it and by the way it's more expensive so you can save tons of money by shopping among a different a group of different companies and have an independent agent do that for you go to ramsey solutions.com home talk to a trusted home insurance pro today check out our insurance property and casually endorsed local providers they're ramsey trusted ramsey solutions.com slash home sheila is with us in seattle hi sheila welcome to the ramsey show hi dave hi george thanks for taking my call sure what's up? It's currently at $1,800, and then this coming September, it's going to be $2,150. And I was so upset.

Anyway, I do have $20K of emergency fund, $100K in money market. That was originally from trying to come up with a down payment but it's almost impossible by the way i'm an rn i work from home as an oncology nurse and i make 123k and i got 401k 43b i got lost ira And so I'm needing some advice on my next step. I'm thinking... Why are you not buying a house? Well, it's ridiculous here, Dave. It's like 600k, and that's not enough 20% in King County.

And when I did move to a distant county, it still is about $400 to $500. So I'm like, even for a home. But you got $100 to put down. I can put that down? Is that enough? Sure. Put it on a 15-year fixed where the payment's no more than a fourth of your take-home pay. Buy that amount of house.

Oh, I doubted that i could find that house but you said you work from home right so you can you can move to a more affordable area i do i'm thinking just nearby counties like um just near my church yeah i like that and that's a cheaper area right well? Well, it's still about $500,000 mortgage. Yeah, but if you take out a $500,000, I mean, if you have a $500,000 house, you put down $100,000, that's a $400,000 mortgage with the money you make, that ought to fit. Really? Okay. I was thinking I should have that in mutual funds.

No, I thought you saved it up for a down payment yeah i mean that was the original intent yeah but what happened was you watched the news too much still your hope and inst and instagram and you watched all these tiktok economists i was actually thinking dave that i need to move in with, you know, a friend or an acquaintance. You're not broke. You got no debt. You make $120,000. I know.

I was just thinking of saving up more, like $200,000, $300,000, live with somebody, a woman, Christian woman. Meanwhile, this house goes up in value, and it's harder and harder to purchase. Okay, so I should start looking then. Okay. Yeah, that's what I would do. Yeah, you don't need to get an $800,000 house. I'll go look for that $400,000 home that suits you in a different county, like you mentioned, and you got a $300,000 mortgage that's very reasonable for your income. And if you do with our parameters, there's no need to stress. When you look at the facts on paper, you go, oh, I can breathe. Oh, and it could be funded like bringing a roommate when you did that.

And now you're living for almost nothing and you can pile up cash real quick and move up in a few years. That's a good idea too. You know, meanwhile, the house you're living in is going up in value. It's a moving target there. There we go. Jessica's in South Carolina. Hi, Jessica. Welcome to the Ramsey Show. Hey, how's it going? Thank you all for taking my call. Sure.

How can we help? Okay, so I just found out about you guys and the way to start of getting out of debt with the seven baby steps. However, I currently have been living paycheck to paycheck, and I'm just now going into a completely different industry. And so I'm going from hourly of making $18 an hour to now I'm going to salary starting out at $50,000. And then I'm losing- Great, way to go. And I'm also going to'm losing my Roth IRA. So I just don't know where to start because due to the work change in, I'm having to relocate and living as well. Why are you losing the Roth?

Because at my new job, I do not have that option. Oh, you mean you didn't lose your Roth. If you have a Roth, it goes with you, but you just don't have a new one at the new work, and you have to do one on your own. But first things first, we're going to get you out of debt, build up an emergency fund. Have you done that? No, sir. I don't have any savings. Okay.

So what kind of debt do you have? Credit cards and a savings. Okay. So what kind of debt do you have? Credit cards and a car. Okay. How much on the credit cards? $16,000. And how much on the car? A $23,000. Okay. Well, what kind of car is this? A 2019 Toyota RAV4.

Okay. It's a lot of car. I mean, it's reasonable for your new income. Do you know what it's worth? I did an appraisal on Carfax, and I think they said it was going to be around $24,000. Okay. But the thing I thought about putting it you know

up for sale and like trading it in but i don't have anything in savings to where i could find you know a reliable car yeah even with if i had a savings and i don't have anything so i'm just kind of like it's ground zero and i don't know where to go yeah let's pretend you're not going to sell the car you may end up selling it but for right now we'll pretend you're not going to sell the car. You may end up selling it, but for right now, we'll pretend you're not going to sell it and make the move. And now you're going to get on a written budget where every dollar has a name. How old are you? 24? No, sir. I'm 32. Oh, okay. All right, cool. Well, we're going to put you into Financial Peace University, our nine-week class. If we give it to you for free, will you take it? Yes, sir. Okay. So watch all nine lessons in there. And part of that, you're going to set up your every dollar budgets. You're going to have

your income on one side, which is your, you know, take home pay from that 50,000 salary. On the other side, you have all of your expenses. And I mean everything. Go back and look at your bank account. And with the version we're going to send you, it'll actually connect to your bank account, which is going to be super helpful. And once you do that, you're going to go, oh, okay. At first it's scary because you're looking in the mirror realizing I thought I spent way less on clothes and food and whatever else. Once you do that, I want you to create enough margin to where you have extra to put on that debt, on those minimum payments. So list them all out, smallest to largest, regardless of the interest rate. And we're going to start attacking the little one with a vengeance. That might mean getting a side job. It might mean cutting

subscriptions. It might mean selling old stuff in the closet, but it's going to get addicting and exciting, and soon you're going to be debt-free. It for sure means you're not going on vacation or going out to eat. You're broken in debt. If you're going to keep this car, you're going to have to really sacrifice and plow through these debts and get rid of them. Oh, by the way, when we hang up with you after Austin picks up, I want you to get the scissors out and cut up your credit cards right now. They've been such a blessing. This is The Ramsey Show. សូវាប់ពីបានប់ពីបានប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពី George Campbell, Ramsey Personalities, my co-host today.

You jump in, we'll talk about your life and your money here on the Ramsey Show. The phone number, 888-825-5225. Chase is with us in Los Angeles. Hi, Chase. How are you? Hi. I'm grateful to be alive. How are you guys?

Same here, brother. What's up? So I've been listening to you for about a year now, And I listen to you every day on my way to work. I pretty much dream and fantasize about getting debt free. And I'm having a hard time diving full into your program, into the baby steps. Why? I'm a recovering addict. I'm a recovering addict.

I've been sober two and a half years. Good for you. And I just have this, thank you. I just have this giant fear of losing everything. And I have, you know, like when I was on drugs, I, you know, was looking for change on the streets, had no money, calling people for money all hours of the night. And now that I have, you know, a pretty good savings, I have $15,000 in my savings. I'm, I'm really terrified to let it go to, you know, I'll lose everything like I did in my addiction. Um, and I'm just kind of wondering what advice you can give me to make that leap of faith and just go all in, um, for you. So what, what were you addicted to? Just mess. Whoa. Good for you. That's a tough one to break.

Yeah. Proud of you you how old are you yeah it was really hard i'm 33 wow and what's your income now um well i uh sell cars used cars and um this year i'm on track to make 90 000 a year good for you man that's amazing you're amazing thank you thanks previous to that i was making uh 20 000 a year. Good for you. Man, that's amazing. You're amazing, Chase. Thank you. Previous to that, I was making $20,000 a year as a flight attendant. Okay. Yeah. So this big jump

in income has been pretty great for me. How much debt have you got? I have $58,000 in student loan debt. I just cash flowed my last semester. And I have $21,000 in a car. I have $3,000 in collections.

And I have $1,200 on credit cards okay and that's it all right well i'm very proud of you uh breaking an addiction is a tough thing breaking meth is a really super tough thing uh you're you're yeah you're a man you're a man that is beating the odds i appreciate that. And now you're trying to address other behavior things. So here's the deal. When you were walking down the street looking for quarters because you were a meth addict, that's a different guy than I'm talking to, isn't it?

It is. Okay. But your body, as Dr. John Deloney says, your body remembers the terror of being broke. Yeah. Combined with a drug addiction. Yeah, it terrifies me. Yeah. I know I have a good head on my shoulders now.

But my point is, the thing that is welling up inside of you, and you physically feel it probably, is when you think about being without that $15,000, it takes you back. You just told me this, so I know it does. It takes you back to picking up quarters on the street. Yeah. However, you and I both know that intellectually that is not the reality. The reason you were on the street picking up quarters was meth. It wasn't 15 grand.

Yeah. If you'd have had 15 grand, you'd have spent it on drugs. Yeah. And you're not that guy now. Exactly. Yeah. So our intellect tells us that the facts are Chase is operating in a completely different mindset, in a completely different world than the terrifying thing that's keeping him to move forward on this.

Does that make any sense? Yeah, it does. I just needed to hear it, I guess. Yeah. So you are more worthy than your guts tell you when you start talking about pulling the 15 grand so i'm going to do something i almost never do here okay uh-huh i'm going to modify my advice a tiny bit okay okay because i'm empathizing with the way your heart rate is going up when you're talking about this normally i just call people a wuss and tell them to bone up and do it right okay in your case i'm going to do the same thing but i'm going to give you 30 days

all right here's what we're going to do today i want you to pay off the credit card and cut it up that's twelve hundred dollars and the collections that's three thousand dollars okay now we really didn't affect your cushion very much mathematically agreed yes you're still sitting after you finish that on twelve thousand and some change agreed yeah so you're still okay breathe but what that little experiment does is i want you to get the high oh that's a bad use of words i want you to get the joy i want you to get the joy of having paid off the debt right okay okay and then you're going to compare that to the fear from your past all right and then i'm going to tell you in the next 30 days take the rest of that money down to

a thousand get your butt on a budget and tear into this thing like i would everybody else okay okay but today and then one week from the day i want you to sit down and write out somewhere how it felt to pay off those two debts because let me tell you what you're going to feel i'll go ahead and tell you you're going to have a sense of power empowerment yeah you're going to have a sense of I'm in control. Because part of being an addict is you're out of control. And you need a sense of control to move forward into your new self, don't you? Yes. And Chase, you mentioned the sense of security with the $15,000

but it's an illusion because on the other side you get $84,000 in debt. And so there's not a place of safety until you're completely out of that debt. And you work at a used car lot. Could you sell the car and get a car off that lot for nothing and drive that around while you pay off the rest of this debt? Would that give you another win? I've thought about it. I got an appraisal a couple of days ago. Um, they offered me 19 on my car. I owe 22, I think. Um, if I cancel like the warranty and gap insurance that I bought, I could get it close to 19. Um, and then I could possibly buy a wholesale

car from our wholesale lot. We get wholesale prices. I've thought about that. Now we're getting creative and do that and do that with cash now we're down to just a student loan yeah you can use some of your savings to even do that and get out from under this car yeah go buy a five seven thousand dollar wholesale car which is a ten or fifteen thousand dollar car well it's not probably a ten thousand dollar car right buy it000. Yeah. And use some of that money for that. Now we're out of car debt. Now we're just down to a student loan. And make a $90,000.

And make a $90,000. Knock this thing out, man. Hey, I smell success. I smell it in the air, brother. Yeah. You got me excited. There we go. So here's what you,

and I think you're going to be more excited when you actually wake up and those two debts are gone. You can put them on the refrigerator, draw a big red line through collections, a big red line through the credit card. Oh, you've got to cut up the credit card. That's part of the exercise, okay? Yeah, I've cut up two of them. Yeah. Oh, you're not there yet.

This is all in, brother. Three credit cards. This is all in. I'll cut it up right when I hang up. That's all in, okay? I'll cut it up right when I hang up. That's all in, okay. I'll cut it up right when I hang up. Yeah. And I'll tell you what, we want to be part of the final steps of your healing.

You have done such a wonderful job in the journey that you're on. You're such an important guy right now. We want to put you through Financial Peace University, so we're going to walk with you while you do the rest of these things. But what you're going to experience there is what people experience in the early days of doing their debt snowball. When you pay off that little one, you go, yeah. Then you pay off another one, you're like, yeah. And there's an emotional thing that happens, even though the math is small, because it's an action associated with taking control of your destiny.

And I can't wait for you to come do your debt-free scream. That's going to be a powerful one. Yeah. That'll be fun. And we'll pull this call up and play part of it. And a year, two years from now, and five years from now, you're a Baby Steps millionaire. Man, you'll have a testimony at that point. What a story.

What a story, man. You're amazing. Could inspire a lot of people. Way to go, dude. If you can beat meth, you can beat debt. I mean, that's my line of the day right there. Whoa, that's a billboard right there. This guy is impressive.

Way to go, Chase. Hang on. Austin will pick up. This is The Ramsey Show. We'll see you next time. George Campbell Ramsey personality is my co-host today as we answer your questions about your life and your money the phone number 888-825-5225 Tiffany in New York City. Hi, Tiffany. How are you? I'm well. How are you, Mr. Ramsey? Better than I deserve. What's up in your world? Hi. Thank you for taking my

call. I called about a year ago and spoke to Anthony and Dr. John, and they gave me some wonderful advice, and I'm happy to say, with God's good grace, that I became debt-free before I turned 41. Good for you. The only, thank you. The only debt I have left my husband and I is our home. And I have three

more years before I can retire from my profession. And my question is, sir, is we're on the baby step number four and I have a pension and annuity and and a 457, and I'm contributing to my pension as well as an extra 50% in addition to what I have to contribute to my pension, as well as 5% to my 457. And I feel like I'm maybe not contributing enough. 50%? Yes. Of your income? 50 percent yes of your income 50 yes how are you not contributing enough if you're putting in half of your income i don't know if i should leave that towards my pension or take that away from the pension and put it towards my 457 i would put it in the 457 because the pension dies when you do the 457 doesn't. Okay. Yeah but I don't know but baby steps four five and six you should be putting 15 percent

of your income towards retirement of your household income and then everything above that should be going to baby steps five and six kids college and paying off your house you have kids in college or going to college or anything no we have uh two and a half year old and one who's going to be one year old next month great i would start at least start a college fund for them in baby step five fifteen percent of your income towards retirement and then everything else going to baby step six yeah i don't know where the 50 is coming from it sounds like you got some time i mean you got three years here until you're saying you're going to retire but it doesn't sound like a dire situation right

now 41 years old so yeah you have time and no i would not be putting 50 50 percent of your money away you're not gonna be able to live towards retirement um until your home is paid off and then if you wanted to get that aggressive baby step seven when you're debt free everything then you could if you wanted to mckenna is in orlando hi mckenna welcome to the ramsey show hi how are you great what's up hi so i just got offered today my first full-time job out of college. Way to go. How much? Thank you. $38,000 as a teacher at a private Christian school. So I'll be going to sign the paperwork tomorrow, and I know that there's 401ks and different things. But I just want your opinion

and just what I should be looking for. I don't think that there's a teacher's union with it being a private Christian school, but anything else I should be looking for in the paperwork. No, I mean, we love a 401k around here. And if you've got a Roth option, that's even better. And I don't want you doing that until you're out of debt. Do you have debt currently? I don't. That's good news. And do you have an emergency fund of three to six months of expenses? I have $3,000 in an emergency fund. Okay. Well, let's beef that up as you step into this career. And once you get to that

three to six month mark, then we can begin investing into whatever options they have. So I would do your research, see if they have a Roth 401k and begin investing 15% of your gross income. And inside of that 401k, that's just a shell. So we want you to invest in good growth stock mutual funds inside of that 401k. Okay. So right now I actually have about twenty thousand dollars invested with a smart investor pro um that i started about a year and a half ago great um because i've been following you guys

since like high school because i'm just a geek over numbers wow um so is is this something that i should combine the money as far as 401K and the mutual funds I already have going? No. As a matter of fact, what I would do, you need to build your emergency fund, so I'm probably not signing up for the 401K tomorrow when you do your paperwork. Okay? I want you to go and get that $3,000 up to three to six months of expenses, and you've been geeking on our stuff, so you knew we were going to say that.

Then what I would do is take your 401K options the mutual funds that you're for it maybe even be a 403b as a teacher in a private school okay it may matter of fact likely is okay but it's the same kind of a thing look at the mutual fund options holler at your smart vestor pro and ask them to look at the stuff with you you might be better off just to continue a roth ira with the smart vestor pro than to deal with the 403b if it's got bad options or if it's not roth okay okay and then with roth isn't that where you can't touch it for so many years? All of these are. Okay. Gotcha.

401K, 403B, Roth, all of that is 59.5% where you can get to it. They're retirement plans. That's what they're for. Gotcha. The Roth is just a type of tax treatment where you're going to use your after-tax dollars to invest, and it grows tax-free. Yeah. Let your SmartVestor Pro guide you in this this and I think you'll end up in a really good place. First, get your emergency fund in place before you do either one. Good stuff. Well done. Zach's

with us in Grand Rapids, Michigan. Hi, Zach. How are you? Hey, what's going on, Dave? How are you, my man? I just wanted to say thanks for letting me on here. I got a lot of respect for you and all that you do, man. I've been listening to your podcast and reading some of your books for a few years now, and I'm very grateful to be here on the show with you. Well, thank you. How can we help today? So, long story short, I've been an investor now for a little while. I am in real estate with my father. We own a LLC where we have R1 zone, neighborhood zones, homes within, you know, like a residential area. And then we also do VRBOs and Airbnbs. I find a lot of passion out of that and I get a lot of my income from that. So when I take that income and I invest it,

I've been doing stocks for a little bit here now and there. And I've been doing, and again, I think from your posts on Facebook and everything, you might be a little skeptical, but I've been paying very close attention to crypto and I've been watching the chart. And in terms of financing this move that I'm thinking of doing, and this is why I wanted your professional opinion, because I look at you as a role model. I know you got your stuff straight. I've been doing and investing in Schwab now, a Schwab investment account for the last two or so years, and I've been putting away about a grand every month. Good for you.

And I also have a Roth that I put $500 into. Good for you. So this is the main question. Sorry, go ahead. No, I'm sure your main question is Bitcoin? So, yes. So I've been putting money aside now for the last two years, roughly a grand every month, and I have upwards of $7,000. So why do you want to lose it?

That's the thing is I've had mixed feelings on it. I've slept over it. I've talked to my father about it. I've talked to friends, different investors that are pro and against. Well, you're doing real estate investing, and you're doing mutual fund investing, which are both super conservative investments. And then over here on the other side, you're talking about gambling,

which is where Bitcoin is. In a way. No, it's not a little bit. It's a lot. The probability of losing money in Bitcoin is very high. So, I mean, you can do what you want to do, boss. You're asking should I take some of this money I'm making and throw it into Bitcoin, and the answer is no from us.

I mean, you said you've been listening to the show for a while. Neither Dave and I invest in crypto. It has no track record that makes me feel good about throwing money into it. I'd rather go to Vegas at that point and at least have some fun and be entertained instead of staring at the robin hood app watching it go 24 7 volatile up and down up and down so i'll stick to my 401k iras real estate that's the way that we talk about building wealth around here we don't put money in things that don't have a proven track record and And Bitcoin's not been around long enough to have a proven track record. I got socks older than Bitcoin.

And the track record that it has so far has proven it to suck so far. So when you have a proven track record over many, many years, like decades, then we'll talk about it. But you can do whatever you want to do. But it's just an ultra high risk discussion. The stories I'm hearing about people destroying their life over crypto, it's heartbreaking. Well, and it's all because I studied the charts. You know, no, thank you. You can do whatever you want to do, Zach.

But all this stuff you're doing sounds very cool and very well done. The thing that doesn't fit in this glaring situation is this one stupid thing you're talking about doing. So I wouldn't do it. This is The Ramsey Show. Dave here. You can find all of our shows with the Ramsey Network app on your smartphone. It's the only place to listen to the entire back catalog of episodes. Download the Ramsey Network app in your favorite app store today.