The Ramsey Show - App - I’m 28 and Don’t Own a Credit Card, but My Mom Wants Me to! (Hour 3)

Episode Date: May 27, 2021

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Music Music Music Music Music Music Music Live from the headquarters of Ramsey Solutions, broadcasting from the Dollar Car Rental Studios,

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. I'm Dave Ramsey, your host, Ken Coleman, Ramsey Personality, host of the Ken Coleman Show. We talk about careers and finding your passion in your work is my co-host today. We're taking your calls about careers, about money, about life. Open phones at 888-825-5225. That's 888-825-5225. Karen's in Lubbock, Texas.

Hi, Karen. How are you? Hi, Dave. Hi, Karen. How are you? Hi, Dave. Hi, Ken. It's an honor to speak with you all. You too. What's up? My question is this.

I am in Baby Steps 4 and 5, and I have a 23-year-old son. He will be going to graduate school in Dallas in August. And he's going to get a free scholarship for all but $2,000 of his graduate school. However, I'll be helping him pay for his rent. And when he gets rent or when he rents his house, he will be having roommates. And if I am asked to co-sign, I know I've heard you say many times not to co-sign for somebody when they're renting for your child. So my question is, what can I do if I'm asked to co-rent? What other options would I, or to co-sign? What other options would I have?

Are you paying the rent? I'm going to help him. He'll probably be paying some of it, but I'm going to pay, help him with a lot of it. Do you have the money? Yes, I do. I'm on Baby Steps 4 and 5. And I am cash flowing. He's 23. Okay.

And what's his grad work? He's going to graduate in music performance. Okay. Is he working while he's doing his grad work? Yes, he will be. He's in undergrad. He did a lot of gigs, and, you know, he did a lot of work, and he paid for most of it, most of his rent. And I paid for minimal of his school.

So I won't be paying a whole lot, but the issue is I'm just concerned that when he gets a roommate, he doesn't have any credit or credit cards, thank God. But if I'm asked to co-sign for him. The answer is no, I would not co-sign for anyone under any circumstances. The reason I was asking so many questions, I was trying to figure out where you were in a couple of things on parallels. So one of my kids at college moved into a house with a bunch of other kids. And, A, I didn't want his name or my name tied to being liable for the whole rent if the other goobs didn't pay their share. Right.

Which happens in college situations all the time. Okay. Yes. And so what I did in that case was I called the landlord, talked to him, and I just prepaid his rent for the year. Okay. No signature required. No lease required.

He's liable for the whole thing because he's not liable for anything. His part's already paid. And I'm certainly not signing anything. Yes, that's what I just wanted to be prepared when that question arises. And I don't want to burst your bubble, but I do want you to be thinking about something and your son. Why do you need graduate level work and performance in the music business?

His ultimate goal is to be a professor, to get a doctorate. Okay, then that would make sense. Alright, that's the only reason I can think you would want to get that. But you certainly don't need it to be a performer. Like, the number of performers who have a graduate degree that stand on the stage and perform music is zero in fact there's

high percentage of those performers don't even have a college degree right um dave i had a question there you know i'm a little old school i i don't know why the 23-year-old's not able to pay his rent 100%. I appreciate mom. She's awesome. She's amazing. She wants to help. Clearly, this young man did a great job in college of paying for most of his college, and he has no debt. But at 23, I want my kid, if he's going to grad school, I want him paying his own rent.

Am I an archaic old fuddy-duddy? No, I mean, if she can't. No, no, you're not. That's preferable. And she's you know, she said he's a hard worker and he's paid for Yeah, he's absolutely responsible. This kid's not a parasite. So, you know,

yeah, I think but to say absolutely zero you know, I might have helped one of mine in that situation. But my first and best choice for them is for them to figure out a way to cut their own way through the forest. Get the axe out, get the machete out. Time for you to do your own thing, baby doll. Yeah.

And it's good for that. That's not a bad thing at all. Patrick's in Tulsa, Oklahoma. Hi, Patrick. How are you? Hey, Mr. Ramsey. Thanks for taking the time to talk to me today. Sure. What's up? So, my question

fundamentally is I finished your Total Money Makeover book. My mother wants me to have a credit card. I do not want to have one. How old are you? I don't want to. 28. Soon to be 28. So, background information. Well, that's sweet that you're

what your mommy wants, but who gives a rip? Right, right. So background information. My mommy wants me to buy a red car too, but I'm 28 and I'll freaking buy a blue car. Okay. So I just finished medical school. I'm going to start residency here in a little bit.

I have $158,000 of debt. I haven't had a regular income-based job. I've been able to pay off my undergrad loans, but now I'm just with med school student loans, and my parents have been gracious enough to put me up and basically pay for all my costs of living while I handle tuition. So I want to be able to answer my mom respectfully other than, hey, I'm 28. It's my life. Thanks for helping me through, but I'm not going to do that. Yeah.

You know, all you have to do is turn up the respect one quarter of a notch to what you just said, and you'll be respectful. Because she's out of line. She's out of line. I've got a 30-year-old. I would no more tell him that than fly to the moon. You know, and I'm freaking Dave Ramsey. I mean, really.

So, you know, that's a boundary violation. But anyway, we don't have to be mean to her. They're being kind to you. They've been good to you, and't have to be mean to her. They're being kind to you. They've been good to you. And we want to be loving and gentle. That's not, I'm not trying to be sarcastic and mean. But so the answer is, Mom, I've been reading through this and this new material, and I've become convinced that our debt-based way of doing things in America is a bad plan.

And so I'm really scared about these student loans that we're going into here. And one of my first goals is going to be get rid of those. And I'm swearing off a debt. I'm not going to go anywhere near debt. And so I've got a debit card. It'll do everything a credit card will do except go into debt. And I'm not going into debt, Mom. And you ought to really be proud of me for that

because it means you raised me well. And that's it. End of discussion. And if she can't put it down, and she won't, then that's on her at that point. That's not on you. In today's world, technology and innovation are crucial for any company's success. But the primary focus should always be on you and meeting your needs. That's why you get the best of both with Zander Insurance and their term life plans. Zander uses time-saving technology like over-the-phone applications, voice or electronic signature, text message updates, electronic policy delivery, and even plans with no medical exams to speed up the process of getting you the protection your family needs.

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You jump in. We'll talk about your life and your money. Chase is with us in Dallas. Hi, Chase. Welcome to the Ramsey Show. Hey, Dave and Ken. Thank you guys so much for taking my call. Sure.

What's up? Well, first off, I wanted to thank you for last year. I called in in February last year with a business question. I was looking at a partnership, and you strongly encouraged me not to do it. And I wanted to thank you because my business has about tripled in size over the last year. Wow. And it's been a banner year. I run an appraisal firm, and it's been very busy.

Good for you. So I wanted to thank you for that first. I'm so happy for you. My question, thank you so much. My question today is we are thinking about getting into a bigger home, and honestly, I'm a little bit nervous. We are on Baby Step 4, 5, and 6, and we currently have a home that is, it's a very affordable home.

I don't even think about my mortgage, but it is in a school district that we don't really love. I have four kids that are starting at ages three and go up to eight. So we have a lot of little kids at home and we've got them piled into the three bedrooms. So it's a bit of a madhouse. And we are looking at moving to a better school district, but the homes there are quite a bit more expensive than what I have. And we have an opportunity. We had not only did we find a house down there, we found a house on land that needs some repairs done to it, but the houses down there range from kind of the 350 to the 475 range. And after repairs and everything, this thing would be right about 350. So it's kind of an ideal situation. My question is, should I wait and be a little

bit more conservative because I'm a business owner or am I in the right place to start moving up in house? As long as the mortgage is on a 15-year fixed or less, and it's no more than a fourth of your take-home pay, I'm good with the move. Okay, okay. Well, the only thing that kind of put a little monkey ring to that is that I know that you're not big into financing or doing any kind of anything for repairs on the house, and the house does need that. It would need about $70,000 of repair, but we could put that into the 15-year fixed-rate mortgage, and I would just have a fixed-rate day loan. Yeah, that's like doing a construction loan to build a house at that point, and I'm not against that. It just all ends up in your permanent is what it amounts to.

Now, what is the years left on your current mortgage? How many years left? So I've got about, we refinanced to a 15-year last year, so I've got 14 years. I only owe about $100,000 on it. The house is worth about a little less than $200,000. Okay, and you're going to throw that $100,000 in the mix, and so you're going to finance $250,000, give or take, on a 15-year fix instead of $100,000. So you're going up $100,500, and your household income is what?

Well, my household income, I don't know if I should judge it off this last year, but again, it was a big year, so it was about $250,000 this last year, and the year before it was about $200,000. Yeah. You're more than okay, dude. I mean, you're in great shape. My wife is going to laugh at this

call. She thinks I'm the most conservative person on planet Earth. I build our budget around $150,000. You're not, not but if they die you could be left with that title oh no you're you're doing good you're just being very careful and you're very wise you're you're an appraiser and so you're a numbers guy and you're you're a detail guy and you and you analyze things on the left side of the brain, and that's awesome. There's nothing wrong with any of that. It's gotten you to where you are, dude, so it's not a bad gig.

You're doing a really, really good job. I'm proud of you. You're in good shape here. The trick is to just not get in patterns that roll you into more debt all the time. And so this is probably a big move for at least a decade, and you're probably going to get this house paid off in about less than 10 years. That is the plan. Yeah. You're in good shape, dude.

Chase, one last piece of advice. It'd be good to go home and tell your wife that you talked to Dave, and she was right. Just get some bonus points there. But you're still a good dude. You're doing great. You've done a great job analyzing it. And your conservative nature has gotten you to where you are, but it's also good to bounce things around.

And you're humble enough that you're open to input from her, input from other people, and just to kind of bounce things around, think it through with other people. And that's very wise. Very, very wise. Good question, man. Thank you for joining us. Congratulations on all very wise. Very, very wise. Good question, man. Thank you for joining us. Congratulations on all your success. Very, very well done.

Folks, if you're tired of feeling stuck with your money like you'll never get out of debt or you'll never save enough for the future, maybe you'll never be in control like that guy was, listen, it doesn't have to be that way. You can make progress with your money, and you can make it faster than you think. The only way to make it happen is with a budget and that's why you need a ramsey plus membership you'll get access to the premium version of our every dollar budgeting app which is world class you plan out every dollar you'll spend you'll save before the month begins connect your budget to your bank so you don't miss a transaction

custom budget reports access to financial peace university access to, access to Financial Peace University, access to coaching, access to group discussions. It is an amazing process to get into Ramsey Plus. When you budget and you get intentional with your money, you're going to make progress fast. And you can start budgeting for free today with a free trial at Ramsey Plus. Text TRIAL to 33789. Text TRIAL to 33789. Text trial to 33789. Our question of the day comes from blinds.com. They have a 100% satisfaction guarantee.

That means even if you mismeasure or you pick the wrong color, they'll remake your blinds for free. You get free samples, free shipping, and with the new promos they run every month, you'll save even more. Use the promo code Ramsey to get the best possible deal. Dave, today's question comes from Kendall in Kentucky. I will get my bachelor's in business management next year, and I have roughly $40,000 invested in the stock market and three months' expenses in my emergency fund.

I'm considering going straight into a master's program in data business analytics. I don't think I will have the skills to confidently walk into a data analytics job with a bachelor's degree. Should I stay in school to get my master's, or should I work full-time in a different role for a couple of years and save up more money to go back to school for data analytics? Well, the first thing is, let's get for sure. When somebody says, I don't think I'll have the skills, I hear a little bit of doubt. And the way we deal with doubt is we go get some sure. When somebody says, I don't think I'll have the skills, I hear a little bit of doubt. And the way we deal with doubt is we go get some facts. And I think there are many entry-level jobs that will lead you into data analytics. And so I would do my research. You've got a school that

can help you and get you a ton of information, plus you have relationships that allow you to talk to people who are winning in data analytics. That's the proximity principle. It says, in order to do what I want to do, data analytics, I've got to get to people who are winning in data analytics that's the proximity principle it says in order to do what i want to do data analytics i got to get around people that are doing that work and in places where it's happening that is your number one homework assignment let's get very clear on whether or not you must get a master's degree in order to do the work you eventually want to do anybody that gets out of college has got to jump in at entry level and i don't't think he has to do that. You are not going after this master's degree because you need a master's degree. You're going after this master's degree because you're scared to be a grown-up.

Yes. You want to hide in education because you're afraid of stepping out there in the real freaking world, dude. Throw your shoulders back, son, and go get you a job and get into data analytics. Data analytics is the hottest yeah i mean that and and and security cyber security right now two of the hottest fields out there you're going to make so stinking much money and you're going to learn on the job because data analytics is moving at light speed faster than the professor is teaching at the master's level he already doesn't know what you need to know a month from now.

Yeah. You can't keep up by going in and doing formal education in that field, son. You're going to have to get in the field, and you're going to have to get out there and kick the can and cause stuff to happen. That's right. Don't be scared. Go do it. Throw your shoulders back and step into it, son. You can do this.

Yeah. You're just trying to hide behind. People don't want to go out there. They just keep going to school. It's time to quit. Time to go do it. And listen, they're training you on the job, as you say. And they'll pay for your master's if you need it.

But you don't need it. You don't need it. I've got data analytics people all over this building, and they're smarter than smart than smart than smart than smart. Almost none of them have a master's. Yeah. That's exactly right. And they're running freaking data for Ramsey, I can tell you that. And we are data bonkers

around this building, man. They're teaching me stuff every day. I'm so impressed with them. They're very smart people, but they are not master's degree. That's absolute BS. A BS is all you need. Not the degree. See what I did there? I like what you did. Alright right this is the ramsey show

you We'll see you next time. Ken Coleman, Ramsey personality, is my co-host today in the lobby of Ramsey Solutions on the Debt-Free Stage. Lee and Heather are with us, along with their daughter, Sophia. Hey, guys. How are you? Hey, Dave. Hey, Vance. Welcome. Where do you guys live? Franklin, Indiana, 20 minutes south of Indianapolis.

So, Indianapolis. Very cool. Now, how much debt did you pay off? $91,251.95. Love it. How long did this take? 25 months. Good for you. And your range of income

during that time? We started at 143, went up to 162, and I actually just got a promotion last week, so we're at 171 now. Wow. What do you do for a living? So we both work for the Department of Defense. I'm an HR. And I'm an IT. Very cool. Good for you. Good careers. What kind of debt was the $91,000? My student loans. All of it? All of it. The only debt you had? The only thing we had. Oh my gosh. So what's your degree in? HR? Yes. I have an MBA in HR. Good for you. Good for you. That's a great degree. Yeah. That's a great field. Good for you. That's so fun. So how long have you guys been married? Yeah, almost 10 years.

All right. Good. Good. And what happened two years ago that set this on fire? Well, it actually started about 14 years ago. No, it didn't. And you've been getting out of debt for 25 months. I first heard about you then, and my life was a mess.

I had credit card payments and medical bills and everything else. Listened to FPU and thought, this made sense. This is smart, biblical wisdom. Started getting out of debt and met this handsome guy here, and he was completely on board. Yeah, see, one of the stipulations to being together, she said, you got to read this book. And so it was Total Money Makeover. You've been married 10 years.

Yeah. So what happened two years ago? I thought you got out of debt in 25 months. We did. I'm so confused. So we decided, you know, after we actually were both laid off for a year and a half, after he came back from Iraq, he was injured and couldn't work. I lost my job at the same time.

So we kind of had to stop everything and rebuild our careers and all our assets. And then 25 months ago, we said enough on the student loan. We're sick of it. We need to get rid of it. And we went nuts. The first year we paid off $25,000. And then the last year we paid $66,000. Amazing.

That's impressive. Okay. So you went through a career downturn and a reset of your whole lives, and following that is when the 25 months started. Right. Now I'm getting my story straight. I got a bachelor's degree in the time because I couldn't do my job, so the VA paid for it, and I was like, what do I want to do that I love?

So that's why I chose IT. Good for you. That's smart. Good choice. I got a promotion, like a $20,000 promotion in 17. And then we're like, you know, we're barely paying on this debt. So let's pay. We make

money. Let's pay the max. Yeah. And so that's when we kind of like, yeah, what are we doing? Let's get that book back out now. Right. Okay. All right. Cool. So you were in the military then? Yes, I was. Okay. And how'd you get injured? Overseas, my back. Oh, yeah. I you were in the military then? Yes, I was. Okay. And how did you get injured? Overseas, my back.

Oh, yeah. I just kind of messed my back up. So I had three back surgeries, one hip surgery. Oh. I have a service dog, actually. He's at home. So, yeah, I was a mechanic, and that's what I was doing. I injured myself, and I just couldn't do it anymore.

So their VA said, well, pay for your degree. So I chose IT because I loved IT. Very wise. Very wise. Thank you for your service. Yes, sir. Very neat. I want to point out something really quick here for folks that are listening.

Lee had a physical change, and so he had to make a career change as a result of a physical thing. That's not something you picked. But that mechanical brain tied in beautifully to the it fixing problems the way you can break stuff down is that right it was a really nice easy transition for you oh yeah like it's still technical and stuff so that's right it was just a different kind of technical yeah good for you man great transition just the heaviest thing you have to lift the keyboard though yeah that's good i like it that's smart man i love it. That's smart, man. I love it. You guys are incredible. You're heroes. How does it feel now that you're finally free? I don't know.

Unbelievable kind of feel. Still kind of new. So maybe after we scream, we'll know. I don't know. Yeah. We're just like, okay, we're just going to go continue. It's like nothing's changed. We need to do our savings.

We need to save up for things. So we don't want to lose that momentum. We went out to eat. We said, hey, momentum. We did. We went out to eat. You know, we said, hey, we deserve, let's go out to eat, you know. And so, yeah, then we did that. And then we're just going to continue to go. Yeah. Moving on along.

So, yeah, finish up baby step three now and get your emergency fund in place and then become wealthy. Oh, yeah. Very well done. Good job, you guys. What do you tell people the secret to getting out of debt is? I'd say the budget, communication, and prayer really works. Yeah.

Amen. Yeah, I would say just stick into it. You can have a budget and you can have your blueprints, but if you just put walls wherever you want, then nothing's going to matter. So you just got to stick to your budget. And so that's one of the key things. I notice people, they're like, oh yeah, we have a budget. And they just spend and spend and you just got to really keep to the budget. Okay, if it's on paper, this is what we're going to do. And just keep them going.

Heather, you really focused on prayer for a moment. You really locked in pause there. What'd you pray about specifically? What prayers were answered in this process? Strength. There you go. That's a good one. Just intentionality and just understanding that this is a season and that God has so much more planned for us as a family and how much we can contribute now that we don't have this chain around our ankle anymore.

Wow, that'll preach. I think our jobs, too, because we were in a situation where much we can contribute now that we don't have this chain around our ankle anymore. Wow. That'll preach. I think our jobs, too, because we were in a situation where we didn't know what we were going to eat. We had to go to the food market pantry to get some food sometimes. Wow. We were unemployed, and the VA was paying me to get a degree. That was the only thing that really helped us. And so it's like, you know, we thank the Lord every day for our jobs, our house, our cars, all these things. And so it's just amazing how I like to reflect on that.

Amen. Very powerful. Good for you guys. Way to go. I'm so proud of you. Who are your biggest cheerleaders outside the three of you? Well, I facilitate financial peace at church so um constantly doing that uh we just wrapped up our 10th class yeah so you got to do it when you're gonna do it yeah when you're leading it that that's the ultimate accountability

right but the class is cheering you on too right yeah absolutely so they know you're here today they do i love it and we've met so many friends through the class and now they're in our small group uh because of that class and then become like our best friends yeah because it's just this class that we taught and so it's amazing how the lord works in that way too amen amen you know some of the very first people that i taught years ago with a bad suit and an overhead projector. I still stay in touch with them. It's pretty cool. And that was 30 years ago. Way to go, you guys. Woo-hoo!

Got a copy of The Legacy Journey for you. That's the next chapter in this story. To live like no one else. So now you can live and give like no one else. Leave that legacy. Well done. And an extra copy of the Total Money Makeover for you to give away. Sounds like you've got lots of places you could possibly do that.

And pay it forward. Get somebody else involved. And that's good stuff. So, congratulations. All right. Lee and Heather and Sophia from Indianapolis. $91,000 paid off in 25 months, making $143,000 to $171,000 recent raise. Count it down.

Let's hear a debt-free scream! 3, 2, 1. We're debt-free! That's how it's done. Interesting how much adversity they came through and how the entire time they're talking about it, they're smiling.

Yes, absolutely. There was no sour, you know, not weaned on a pickle. It was like, yeah, we did that, and we did that, and we did that. And I'm like, my God. And you're still smiling. You're smiling about it. I mean, it's pretty impressive. You know, it's a result of the sun comes out after the storm, and they're in the sun right now.

And that feels really nice when you've been through the wind and the hail and the tornadoes and the hurricanes and all that to come out on the other side. It's sunny, and joy comes in the morning. That's what we see there. Amen. This is The Ramsey Show. Our scripture today, Philippians 4, 6, Don't worry about anything. Instead, pray about everything. Elon Musk says,

When something is important enough, you do it even if the odds are not in your favor. Amen and amen. Good stuff. Open phones at 888-825-5225. Whitney's with us in Las Vegas. Hi, Whitney. How are you? I'm well. How are you? Better than I deserve. What's up? Thank you for taking my call. So I just had a question. So I'm

debt-free besides my mortgage. I actually just bought a house. I contribute. I match my company's 401k and i just started going um contributing to our ira i was wondering if you were familiar with or you know of the app acorns i've been also like putting money into that and i was just wondering your views on that if that's a good if you've heard anything about it if you would suggest doing that or no well the premise is that it's a small amounts that go in correct yeah so it'll it can round up like connected to your bank account but i also put in money out you know a couple hundred or if i have extra i try to put it in but is it you know something that would be good on i feel like it is just like an

s&p right it just follows the main market but you're not putting a lot of money in there that it matters i mean i've got a coffee cup um that an old coffee cup that sits on my dresser and i put the change out of my pocket in it but it's not going to make me rich right but it's something it kind of grows i mean no it doesn't it's not gonna make me rich it's just it's not going to make me rich. Right. But it's something that kind of grows. I mean, I've talked about it. No, it doesn't. It's not going to make me rich. It's just a coffee cup full of change.

What makes me rich is what you're doing on the other stuff. When you're putting thousands of dollars in your 401k, in your Roth IRAs, not nickel and dime roundups. Right. Okay. So it's almost just kind of just like another thing. Yeah, it is. Because it's almost just kind of just like another joke. Yeah, it is. Because it's a small amount, and if you put in a small amount, even if it did really well, it's going to end up being a small amount. The only danger with it is it makes you feel like you're actually doing something.

Right, right. And that's laughable. Would you suggest getting like with the Smart Investor Pro, like, the mutual funds that you say. Yeah, if you want to put more into investments, you need to do real investing and put a substantial amount in. What would you say is, like, a substantial amount? I mean, you're putting 15% of your income away, and you're in baby step four, right? Yes. So you would not put more away now, other than kids' college,

unless you have a mortgage to pay off. if you have a mortgage to pay off. Do you have a mortgage to pay off? I have a mortgage, yes. Okay. Then you need to be putting all extra nickels and dimes towards the mortgage above 15% of your income towards retirement. Okay. So let me tell you, this is not just Dave Ramsey. So let's back up.

Okay. There's a reason that I'm telling you that. And if you understand the reason, maybe it'll be helpful. Okay. Okay, there's a reason that I'm telling you that. And if you understand the reason, maybe it'll be helpful. Okay? We did the largest study, you probably heard me talk about it a thousand times, ever done on millionaires in North America. Over 10,000 millionaires were surveyed. The typical plan that came out of that was the vast majority of them, they had two major components of becoming millionaires they were investing steadily a large chunk of their income like 15 as an example into their 401ks and roth iras

the second thing they did was they had a paid for house those two items added together made up over a net worth of over a million dollars. The vast majority, over 80% of them, followed that plan. And out of 10,000 of them that we interviewed, the number that said that they became millionaires because they saved nickels and dimes with Akron was precisely zero. Right, okay. But did you say once that investing in your 401k, you should only go up to what they match and then, you know, do an IRA?

You should do match first, Roth second, traditional third. Does your 401k have a Roth option? Yes. Okay. Then you would do your 401k with Roth, take the match. Does your 401k have good mutual funds in it to select from? That I don't know. I would have to look.

Okay. If they're good mutual funds, you max the whole thing out, and if that doesn't get you to 15%, then you can reach over and do a Roth IRA in addition to get you up to 15% of your income. But the best thing you can get is a match. The next best thing you can get is tax-free growth, which is Roth. The next best thing is tax-deferred growth. Okay.

So match beats Roth beats traditional. Okay. Exactly. That's the deal. So, you know, take that match for sure and and then look at the mutual funds if they're decent mutual funds just load that 401k up what what is your income um it i'm in sales so it varies but 90 to 1 okay you could you could be done with your 15 then in a 401k okay yeah you don't have to reach you won't have to reach over to the roth if your 401k has

good options because you can put 15 000 401k allows up to 19 000 some change this year so you're you're fine yeah you can do it all right there and i imagine you've got decent options in that 401k most of them do now there's a few of them out where we run into our lousy mutual funds but most people do a pretty good job of putting a decent selection in there the four types we talk about growth growth and income, aggressive growth. But you don't really need a side investment fund. You need to be throwing those side dollars at the mortgage. That's my point.

It's a distraction, Dave. It's good marketing. They've made people think, oh, this is really wise, and there's just not the ROI in it. It becomes a distraction. Well, yeah, it's, you know, if you plant a few kernels of corn, you're going to get not much corn. Right. There you go. If you plant a few acorns, you're going to get a couple of trees.

Yeah. But if you want a whole forest, boys and girls. Okay. You want the tree farm, you better plant a lot of them. Big money in tree farms, Dave. So I hear. Oh, I got a friend of mine that's mega wealthy. He bought tree farms years ago, told me I was an idiot for not doing it,

and he is looking like a genius. He's growing gold bars out there right now. Head gum lumber. It's not just a metaphor. It turns out that it's actually real money. No, they're gold bars with branches. I mean, they're just unbelievable. Lumber prices are through the free disguise.

Oh, my goodness. Isn't that the truth? He was already a billionaire, and he is twice over now just because of those stupid trees. It's unbelievable. I'm so mad at him. It's such a good – I'm so proud of him, but he didn't make fun of me, and now he's really proven that he was right when he made fun of me. It's just – I'll never forget it.

I'll give him a hard time at dinner the next time I see him. That's funny. Michael is in Boston. Hey, Michael, welcome to The Ramsey Show. Hey, Dave, thanks for having me on. Sure, what's up? So I have a question on tackling Baby Step 6. So I recently paid off about $50,000 of debt.

Way to go. Thank you. I have $25,000 in my emergency fund, and I have close to 15% of my income since I can't do full 15 because I would hit the 401k cap. And when I'm looking at Baby Step 6, my mortgage is like this massive thing

since I just got it in 2019. And just the thought of putting everything in there would take me years to do, to pay it off. No, it's not. So my question is, do I do it? What's your income? I make $170,000. Way to go. What's this mortgage?

$408,000. Oh, stop your whining, dude. You can do this. You could totally do this you make 170 000 wouldn't you want to do some sort of thinking fund for unknown expenses or would you an unknown you make 170 000 you're a single guy you're so awesome way to go man you have a fiance well you're okay you're not you know is she gonna mess this up or she gonna work with you oh we're working together what does she make uh 50 holy crap you're gonna be making a quarter of a million dollars and you're not even 30 yeah um so i guess then that's the answer then just put just throw it all seriously seriously and you're not even 30. Yeah.

So I guess then that's the answer then. Just throw it all in there. Seriously, $100,000 a year in four years, you're done. This is not exactly overwhelming. And then put everything in. Then you'll be debt-free, and you'll just be making a quarter million dollars and become unbelievably wealthy and unbelievably generous. And if you don't do $100,000 a year and you only do $75,000, it's going to take you five years.

Wham. Dude, you really got this. This is very, very, very doable. You're a stud. Act like it. You got this. Ken, good show. Thank you, sir.

Always fun. James Childs, great show. Madison, great show. I'm Dave Ramsey, your host. 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. Did you know you can listen to The Ramsey Show on your smart speaker?

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