The Ramsey Show - App - I'm Too Scared to Meet With My Clients (Hour 2)

Episode Date: July 27, 2020

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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. My co-host on the air today on the Dave Ramsey Show, Chris Hogan, Ramsey personality, number one best-selling author, and we are here to take your calls. The phone number, 888-825-5225. We'll talk about your life and your money.

888-825-5225. Gail is in Jacksonville, Florida. Hi, Gail. Your question for Chris and me. My question is, is me and my husband are both on disability. I'm 56 and he's 58. We have all of our debts paid off, and we have an income of about $6,000, almost $6,000 a month. I want to know if I can invest.

I didn't know if being on disability would prevent me from investing. It does not prevent me from investing. It does not prevent you from investing. It does permit you from doing an IRA, which requires earned income, quote unquote. Do you have any income that comes in outside of disability income? I have my pension, which is $1,500 a month, and I have $30,000 in the bank. Okay. Now then, you'd have to have income from doing something that creates, you know, wage earner income or self-employed income or something like that. So income off of investments or income off of disability does not allow you to do an IRA. However, there's not anything to keep you from investing.

I mean, you can just put money in a mutual fund. Okay. So that's what i want to know i was going to contact an elp and i wanted to make sure that i was able to take that 30 grand well 20 grand i'm going to keep 10 grand for an emergency fund and 20 grand and start my investments in mutual funds okay debt free yeah so you are debt free right now yeah we own our home our two cars, our boat. We own everything.

Okay, that is fantastic. Now, as you look at this, remember, take a look at your smart dollar budget and understand three to six months of that. You want to keep that in an emergency fund, then you could look at investing the rest. So don't shortchange yourself right now, especially in these times, Dave, where having that emergency fund, people have woke up and they're hearing it different now. It's gone from a suggestion to now people realize this is necessary in order to have some calm in your life.

Yeah. If you have a $6,000 a month income, I'm not sure $10,000 isn't enough, as Chris is saying. You may want to up that a little bit. So look at your household expenses times three or six, and that's probably going to run you up to 15 anyway. At minimum. Yeah. And then click SmartVestor at DaveRamsey.com.

It'll drop down a little thing you fill out, and then it'll drop down a list of the SmartVestor pros in your area to sit down with, and they can help you get some investing going. And the only difference in IRA and mutual funds or Roth IRA and mutual funds is how the taxes off of the growth are treated. And so what you're going to want to look for, Gail, is what's called a low turnover mutual fund. And what that means is the stocks inside the mutual funds don't turn over. They don't sell them very often. It's a buy-hold strategy, and so there's hardly any taxes on it until you cash it out. Much like if you buy a share of stock

for $50 and it goes up to $70, you don't pay taxes on that $20 increase until you sell it. Or if you buy a rental house for $100,000 and it goes up to $150,000. You don't pay taxes on that $50,000 until you sell it. And so it has the same effect mathematically as tax deferred growth like a traditional IRA does in that regard. So you're looking for low turnover mutual funds. Hey, Dave, you remember the fancy term for that. You remember in school they told us it's called a realized gain. Exactly. Yeah. Realized or recognized. Yes, absolutely. Upon the sale of that item. Yeah, you realize it when it goes up. You recognize it for tax purposes when you sell it. And so it's not recognized for taxes until it sells because it's just an increase in value. It's a capital gain is what it is.

And an easy way to find a low turnover mutual fund is just the S&P 500 funds. Most of those index funds have very low turnover ratios. And I'll use some of those to stock money in sometimes just to park some money in if I'm saving up for a piece of real estate or something. And it can sit there. As long as it sits there more than one year, whatever it goes up is only taxed at capital gains rate, which is, of course, less than ordinary income rate. So if I park X number of dollars in one of those and it cranks out for a year and I make, you know, good return on it,

I don't pay as much taxes on that good return because it's a capital gain rather than ordinary income thing. Well, and it's something you point out, too, that remember, when you invest, you're looking at doing that for five years or more, anything else you're saving for. And so that three-year window, it totally works. Yeah, absolutely. So she's going to be great. You're going to be fine.

You're just not going to get the tax-free growth that the Roth IRA has. Right. If you don't have, if you, and it's not a pre-tax investment that you're doing. It's an after-tax investment that you're doing. It's an after-tax investment that you're doing. Why wouldn't a pension qualify? Because that's money that's not earned. Investment income doesn't qualify. Right.

So if you're sitting there and you've got $500,000, you're making $50,000 off of that a year, that doesn't qualify. That's not earned income. It's investment income. From an IRA standpoint. But you could still open up growth stock mutual funds overall. Always open up investments. There's nothing that ever prohibits you from opening up an investment. But you have to have earned income, which is wage earner income or self-employed income.

It's very simply one of those two things. So you're either getting a W-2 or you're out there moving some money around. Now, here's the thing. If somebody in Gail's situation, without messing up her disability and depending on the limitations by the physical disability if she could go earn just a little bit like six thousand a year you know this little side job of some kind without messing up something report that on her taxes obviously and um then that is earned income and that's enough to fund your Roth IRA. And that could look like babysitting?

Yeah. I mean, waitressing, bookkeeping. I mean, there's a lot of options out there. It wouldn't require a lot to earn the $6,000 a year. Not $6,000, no. To be able to fund the Roth IRA, that's not a bad way to go at all. Well, we've gone through tough times. Chris talked about it. It went from a suggestion having an emergency fund to where now you understand it's like table stakes, man.

If you just want to play, you've got to be at the table. You've got to get this done. And you might be struggling for different kind of table stakes. You might be trying to put food on the table. John Maxwell says change is inevitable. Growth is optional. So when you have a moment like this, like COVID has done to a lot of people where it smacked you around financially, I got smacked around financially because of my own stupidity back in my 20s. Then you have to have a never again moment. If say never again am I going to be in debt, never again am I going to have an emergency fund,

never again am I going to be living without a budget. And if you want to get rid of this being haunted by your finances stuff, we can help you. We just launched something new. It's huge. It's changed the trajectory of lives already. It's called Ramsey Plus. This is the all-access membership that gives you access to all of our best money products. There are three sections you learn in Ramsey Plus with all the nine lessons from Financial Peace University and the proven plan. You budget with all the nine lessons from Financial Peace University and the proven plan, you budget with all the premium features on every dollar, you track your progress with the new Baby Steps app, and you can get a free trial to Ramsey Plus right now.

So if you're looking around going, I don't ever want to be like this again. I never want to be in this situation again. Never again? Well, we can help you. Text free trial. Let's see here. To get your free trial, text trial to 33789. That's trial to 33789. This is the Dave Ramsey Show. families all over the country are discovering a faith-based and budget-friendly way of meeting

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Always use the magic word, the promo code Ramsey. Chris, our question. All right, this question comes from Casey in Missouri. She says on DaveRamsey.com, our 16-year-old daughter has just got her first job. Should we have taxes withheld for her? She'll make less than the standard deduction, so she won't owe any taxes. The reason I ask is I want to contribute to a Roth IRA for her now that she's employed, and I believe she has to file taxes in order to do so. In order to file taxes, does she have to have taxes taken out? Oh!

Well, in this day and age, Dave, with Social Security and Medicare, I'm going to say you want to file taxes. Oh, definitely. You want to make sure you have that withheld. You don't want that headache and that nightmare later. Well, there shouldn't be. She's right, though. There won't be any taxes due.

Right. There will be some payroll taxes and some other things to come out. So have the minimum withheld because you don't want to wait on a big refund to come back. But you do want to file a tax return in order to do the Roth because that's what we're talking about with Gail in the last section is that that gives you the ability then to do the Roth IRA. And so for you guys that are in Baby Step 7, you're working on changing your family tree, this is something I did with the Ramsey kids when they were in their teens. Every year they worked, and I filed a tax return on every penny, every possible penny up to the max on a Roth IRA that they would make. So up to $6,000, I made sure every bit of income,

whether it was at a place where they were withholding or whether cutting grass or babysitting, or working for us selling books on the back table to seminar, which they did. And so I'd file a tax return on as much as I could justify morally and accurately. And then that gave me the ability, not with their money, but with my money, to fund them a Roth IRA and so I mean if you start funding somebody's Roth IRA when they're 16 15 years old do that four five six years before they get into college and even if they're working a job through college

do the same thing all the way through college then they're they that alone could make them a millionaire that's exactly right I mean because that kind of compound growth happening at such a young age is a great option. Now, Dave, do you have to be self-employed? You are self-employed. No, you don't have to. All you got to do is just have the money, which means you need to be a baby step seven. Right. You don't need to be doing that kind of stuff and not having your house paid off. You don't be doing that kind of stuff and not having your own retirement underway. And were you the custodian of the account? Yes. Okay. You have to be until they're 21. That's right. Can't open a mutual fund in a minor's name. And so as a parent, you retain control of this money. And so it's good just to be aware that you can jumpstart it. It can be in their name, but you are the custodian. Has to be in their name because it's an IRA.

Right. But you're the custodian because mutual fund companies will not open an account for somebody under 21. Austin is not on that line. Austin is on that line in Cincinnati. Hi, Austin. How are you? Hey, Dave and Chris. How are you guys? Great, man.

How can we help? Good. So I've been listening to you for about a year now, and I've paid off about $20,000 so far. I'm actually currently working on my car, paying that off. I ran into my first issue. I took it to the dealership, and they said they were able to temporarily fix the issue. I guess it had something to do with the computer. My question is, should I sell this car and take what equities in it now,

or do I ride it out and take the chance of the computer going out? Was the dealership trying to sell you a new car? I don't think so. It's only worth about $5,000. They weren't suggesting you upgrade with them? No, they didn't say that, no. Okay, okay. Austin, have you had an issue with this car before?

No, it's been good so far. And you've had it how long? It just hit 100,000 miles. Okay. But I forgot to mention this. I drive about 500 miles for work every week. So that's my concern is that the miles are going to start really getting up there and more issues are going to come up.

Yeah. I mean, what kind of car is this? It's a Chrys's a chrysler 2015 chrysler 200 okay well here's the thing what i would do is do a little bit of research i don't know much about that particular car and see if the computer programs are if problems with the computer are ongoing and if you've got something that's going to blink out on you and you want to sell it and buy a car of equal or lesser value in order to keep getting the job done, sure. And, of course, the other thing you could do is get a mechanic that's not at a dealership to look at it

because sometimes a dealership, not all of them, but some of them have been known to say, oh, this thing's a bum car. You need to walk right out of here, son, and I'll show you another one. I mean, yeah, they'll try to upgrade you. That's why I was asking about that. It doesn't sound like that's a bum car. You need to walk right out of here, son, and I'll show you another one. I mean, yeah, they'll try to upgrade you. That's why I was asking about that. Doesn't sound like that's what happened here. Put all your troubles behind you. Just get a new.

Here's the reality, too. I'm with you. I would sell this thing, get something reliable that you can put these miles on. Less or not more money. Right. And then budget and set aside that dollar amount. That was one of the things. That was a game changer for me, Dave, when I got plugged in on the envelope system.

Was starting to make a car payment to myself, saving up to be able to pay cash for a car. You sell the one you got, take your cash, and you go get something new to you. And what's weird is when you start paying a car payment to yourself and you're looking at, I'm saving up to buy something, you put more in the account. Yeah, you do. You don't end up going $323.36. You go, I think I'll put $500 a month in there. And you start chunking a little more in there because $500 a month for 10 months, that's $5,000.

I can move up pretty much with that. That's a nice chunk up. But, yeah, your independent mechanics out there, there's tons of really, really good ones. And just have somebody else look at it, give you a second opinion. The most expensive place to work on a car is at the dealership from a repair standpoint. They make more money per square foot. If you read National Auto Dealers Association's literature, the per square foot at the dealership, in other words, their rent, the most money they make per square foot is the finance office. When they sell you something on paper and they sell that paper to the bank,

they make more on that than they do the stinking car. And the second area they make the most money on is in the shop. Service department. Service department. Yeah. And then all those acres and acres and acres of cars out there, they don't make that much money on. They sell them in order to get you on payments or get you in the shop.

That's where the money comes from. Get the hooks into you. Follow the money. I'm not mad at car dealers. A lot of my buddies are car dealers, and I'm not afraid for you to buy a brand new car once you've got a net worth of a million dollars. That's all fine. I drive really nice vehicles, and I take them to a dealership, but that's a highly unusual

situation. So most of the time when i've been driving cars growing you know throughout my life and i'm 60 years old is i take them to a good independent mechanic and those guys will give you a good give you a good rundown on what's going on so get a second opinion then decide do a little research then decide if you want to sell it don't go into debt to move up and use this situation as rationalization to do that. And especially, let me talk to, especially single moms out there. I think they get preyed on the most talking about you want a safe vehicle for you and your children and this and that.

And I'm telling you, don't fall for that. You know, be aware of that. Keep your hand on your purse. Find a good mechanic throughout your church or in your community that can look over your car and shoot you straight about what's wrong and the cost of repairs. Don't ever hesitate to get a second opinion. What happens to all of us is when your car breaks down, two things activate. You get pissed off.

Yep. And there's a sense of insecurity. I'm stuck. I can't get where, you know, fear. i can't get where you know fear i can't get where i need to go so it's cold weather or i'm out in the middle of no stinking where and i'm vulnerable and it doesn't matter who you are yeah uh and you've got this hassle this inconvenience and those emotions cause people to do some of the dumbest things financially ever. They'll be stuck out there on a $5,000 car and then go finance a $20,000 car on impulse because they get so angry or so afraid over the hassle factor

and the sense of vulnerability of the car breaking down. Fix the car. All cars break. There are no cars that don't break. Some of them break less because they're newer you know better built i get that but all cars break there are reliable i can't drive a used car honey after you've been driving it six months what do you call that used that's what you call it this is the dave ramsey show Most people's money problems come from not paying attention.

That's why before I spend a dime of my money on something, I do the research and I make sure it's going to live up to what it claims. Recently, I got a great pair of sunglasses from a company called Shady Rays. When you're looking for sunglasses, it feels like your options are limited. Name brand sunglasses cost too much, and the cheap knockoffs are ugly, and they don't really protect your eyes. Discovering Shady Rays is a game changer. With Shady Rays, you can count on premium sunglasses that protect your eyes,

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Christy Wright, Anthony O'Neill, Dr. John Deloney, are now publishing a thing called the Ramsey Call of the Day. It could be an inspirational story of knocking off debt. It could be tips on how to deal with loss of income. It could be career decisions. It could be anything that the Ramsey personalities talk about. And the Ramsey Call of the Day will give you the life-changing content you need, but under 10 minutes.

So you can subscribe on Spotify, Apple Podcasts, Ramsey Network app, or on your smart speaker by just saying play Ramsey Call of the Day podcast. So the Ramsey Call of the Day is a new podcast we're putting out with the Ramsey Network. And have you done any of these yet? I have not, Dave, but I'm glad we're not letting you do it, okay, because you would hog all the space. You need to learn to share, Ramsey. I'm a space hog.

You are a space hog. And all the calls, people would be just calling you all the time. You need to let us have some time to do some things. So, yes, you're not involved in this. I noticed my name is not on here. My name is on the front of it. We voted. We voted.

We voted. I got voted off the island. I got voted off the personality island. I haven't done that yet, but I'm looking forward to it. Cool. Because we have a good group. You all, I'm telling you, it is a unique opportunity to be a Ramsey personality. But the quality of people that we have with John Deloney, with Rachel, Christy, Anthony, Ken Coleman, it is Christy. It's just fun. And so being able to plug in and do this with all those guys

and gals it's going to be a lot of fun all right julie is with us in ann arbor michigan hi julie welcome to the dave ramsey show hi julie julie did i push that wrong i got it right didn't i are you there julie apparently, Julie went for a walk. All right, Julie, I'll put you back on. Oh, she's gone now. Okay, that's how that works. See, that's what happens. Leo's with us in Atlanta.

Hi, Leo. How are you? Hey, Doug. How are you doing? Better than I deserve. How can I help? Hey, Dave, I have a good problem being debt-free, and I want to see if you can kind of help me out on it.

Right. I'm 29 years old. I have everything paid for, including my house. Thanks to listening to your show and everything. It's about $500,000, my house value, and I have a business that I was able to pay everything off with. With all this corona stuff going on, I'm very on the edge meeting with clients,

and I kind of want to go meet with clients because sometimes I feel like I don't need to expose myself, but I feel like I know this virus is going to end and my business has to continue, and I just want to get your help kind of getting me out of that mindset or your thoughts. What kind of clients do you have? I work in a landscape business. I own a landscape business on the landscape business and when the clients i go meet with the clients their first thing to come approach me and i just get really urgey and kind of you know with them getting near me and are you ill no i'm not okay

and so how old are you 29 so you're you're a healthy 29-year-old? Yes. Okay. I would suggest you turn off your television. The fear porn has gotten you. It has. Yeah. And, you know, I don't know.

I'm 60. I did the math. It's like a.0001%, less than 1% chance I'm going to die from this. And so if you want to hug my neck, I'll hug you. If you're scared and maybe you got somebody ill in your family and you want to wear a mask, that's fine too. I'm good with that. If you want to shake my hand, I'll shake your hand. I'm going to go wash my hands. But that's what I did anyway back when there was flu.

So, I mean, but, you know, lots of people have lots of opinions about this, so I would be more concerned not about your health personally. I mean, you've got to decide, but I think you probably need to get some different inputs is my opinion, and you asked my opinion, which is dangerous. I'm an expert on that. But I think you get some different inputs on what the actual facts are, because there are people that their fear is based as if this is a, as if you get it, you're going to die. And the death rate is so very low on this that, again, if you've got an illness or you've got a susceptibility,

I would never want anybody to be harmed, and certainly you would respect your customers, what they want to do. There's 100 people sitting outside the lobby or 50 people or whatever it is sitting outside the lobby. Some are wearing masks. They're my friends. Some of them aren't wearing masks. They're my friends.

Some of them that didn't come because they were scared, they're my friends. That's right. So I respect you wherever you are, and you can do whatever you want to do with that stuff uh but then you but i think what you're describing is more what's happening inside your head and i think you just gotta uh study some of the other information that's out there because what one of the things we have discovered through this whole thing is they don't teach math in med school. These people, the models and the stuff are just, they're ludicrous. And the data points on this thing is just silly.

Well, you can honestly in the news, Dave, find whatever it is you want to believe. Yeah, that's true. I mean, you truly can. And I think in Leo's situation, I'm going to let the customer determine that. Meaning, as I contact them, and he's obviously, as a landscaper, he's been... He said he gets afraid when the customer walks towards him. Right, I know. But like you said, that's psychological. You just got to stop with that and just say, you know...

Just stop it. You're a great counselor. You just stop it. Because what you're doing is you're psyching yourself out. And that's called a self-fulfilling prophecy it is but but you know what it matters is what you believe is causing that right and so you've got to decide do i if you truly believe you're going to become ill and die as a result of that then a normal human being would be psyched out oh big time normal i

mean that would be normal no one no one that has good sense would walk into another human's presence if you thought as a result of that you're going to die and so what's happening is as you i'm was being sarcastic but not really turn off the tv news because it's fear porn is what it is people are addicted to fear but they're addicted to porn and they're just feed me more fear feed me more fear feed me more fear, feed me more fear, feed me more fear. Run my anxiety up, run my anxiety up. Make me think the world's coming to an end. And man, they can put it out there. Yeah, that's a terrible way to live.

And I really would. I would talk to someone. I really, you know, for yourself individually. But be honest about what is it you're scared of. And what are your probabilities. Right, right. Actually, statistically, you're probably more at risk when you drove over there on the highway actually if you actually look the i mean i mean the odds now car wrecks are different than viruses i understand

i'm not a flat earther shut up but my god but i mean, it's statistically, you know, we always use the thing, actual statistics, actual probability of statistics, when you're buying a lotto ticket, if you walk one mile to the market and one mile home, you are statistically more likely to be struck by lightning twice than by the lotto ticket that wins. But in spite of that, people buy a lotto ticket that wins but in spite of that people buy a lotto ticket why not because of the actual math and facts because anybody that looks at that goes the chances of me being struck by lightning twice on my walk over there and back is like so infinitesimal but so is your chance of winning the lotto doofus you know and so in in his case, you look at your risk and you look at what the death rate of a healthy 29-year-old is in your state, the death rate.

Now, could you get the equivalent of the flu? We've had eight or ten people here at the office have had it. And one was really ill, and the rest of them, many of them didn't realize they had it. And then all the testing issues come into play there. So you need to get information that you feel comfortable with and act on that. And is your fear logical? John Deloney always says, Dr. John always says, facts are your friends. And so when I'm analyzing something like this, I'm not taking a poll.

I'm not worried about social pressure. You can kiss my butt. I'm going to do what I want to do. I don't care about what you think about me. I'm way past that a long time ago. If you're offended, I'm sorry. But I'm not really sorry. And sorry, not sorry.

Nope. But what I do want to know is I really do want to know what the actual facts are. Am I bringing harm to someone or is someone going to bring harm to me? Those are the only facts I'm really worried about. What are the real numbers? And when you look at the actual math, then it might help you with that fear. That's a good call. If it doesn't, then you may need to do something different until you get straightened out on that.

This is The Dave Ramsey Show. my co-host today on the dave ramsey show ramsey personality chris hogan the voice of retirement and millionaires that's pretty good i like that i may change that around all right john john is with us in detroit hey john how are you mr ramsay thanks for taking my call sir sure what's up um well i got a question for you um due to a combination of many different things uh my wife and i found ourselves in about 140 thousand dollars in debt um we owe approximately 140 000 on our house and i know we could turn around and sell it uh today for about 300 maybe a little bit more than that my question to you is would that be a smart move to uh sell the home pay off of our pay off our debt and um where we

would be debt free and um possibly rent for a year where we would be able to save up. We probably would be able to save up about as much money that we have in equity right now over the course of the next year. Why don't you just pay off the debt over the course of the next year? Yeah, that's kind of what I've been juggling. So what is your household income um well between the two of us i would say uh right now it's about ten thousand dollars now it varies due to my job uh some sometimes ten ten thousand dollars a month which is 120 000 a year so you're going

to pay taxes on 120 next year um yes and you're not going to pay taxes on $120,000 next year? Yes. And you're not going to pay off $140,000 in one year then, or save $140,000 in one year either? You only made $120,000. That's mathematically impossible. Right. Right. No, I understand that. What were the unfortunate events, John, that caused you all to take take on 140,000 in debt? Uh, about six years ago, I started a business, uh, made some very stupid decisions that I've, uh, learned from. Um, I, uh, tried signing the business over to my partner, uh, a few years back. Um, he, uh, ran the business down and in the process, um, I was stuck with about 65,000 in, um in loans that I had personally financed for the business.

And I went to work for him during that time, and I didn't get paid in about $35,000 worth of work. And before I went back to work for them, after I sold the business, I had an emergency back surgery where I was off work for 11 months with no income. So it kind of spiraled very quickly. So number one, do you like your house? We do like our house, and we love the area. And number two, let's sit down with $120,000 income and say, how fast could you pay off $140,000? My guess is the quickest would be about two years.

That would be $70,000 out of $120,000, leaving you $50,000 to live on. Okay. Does that sound about right? Well, right now we're paying out about $6,800 a month in debt. Okay, but listen to me. If you make $120,000 and you live on $50,000, that leaves $70,000. $70,000 a year for two years is $140,000. Right.

And that includes what you're paying out in debt and so forth. If you move, you don't have a house payment, you have rent, it would be about the same as your house payment, wouldn't it? Correct. Yeah, so there's no gain in your cash flow by moving except paying off these debts really quickly. And so if you like your house, unless you hate your house, I would fight and live on beans and rice for two years and pay off your debts by living on a very tight budget. Otherwise, you have to look at your wife and say, these stupid butt business decisions I made caused us to lose our home. Right.

And you will continue to hear that for years no no potentially but here here's the other thing John that is that concerns me I want you to revisit what caused you to get there because I've had people that have sold the house and cleaned up the mess only to repeat the mess because it was the habit that caused them to get into that situation. So psychologically, I think you can stay in this house. I think you guys can get serious on paying this off, but you're going to have to make these sacrifices and they're not going to come easy.

You right now have sell the house as the quick fix that might not be the best overall fix for you and your family. Yeah, I agree. have sell the house as the quick fix that might not be the best overall fix for you and your family yeah i agree the one thing that helps me make these kinds of decisions with folks or myself for that matter john is i asked myself 10 years from today which of what which of these was the best decision financially was it keeping the home and fighting my way through the debt or was it selling the home getting rid of the debt and then then using the fact that the debt is gone to pile up some cash and buy another house. Typically, keeping the home will lead you to a bigger pile of money than moving, all the costs involved, another potential screw-up because you make a mistake on a real estate deal. Ooh, you have a real mistake.

Tiffany is with us. Tiffany's in Seattle. Hi, Tiffany. How are you? Good, Dave. Hi, Chris. Hi, Dave. How are you? Good, Dave. Hi, Chris. Hi, Dave. How are you? Great. How can we help? So my husband and I are having a hard time getting to the 15% for retirement. And so my husband, his company lets him put up to $18,000 a year in there. And then I, for myself, for work, they take 12% of my income.

And, but we still don't get to the 15% because we make about $250,000 a year. And so we are wondering if my husband is not very comfortable putting money in the stock market. And I don't know why he doesn't want to do a Roth IRA because he thinks it's connected to the market. What's he putting his 401K in? Well, that's the thing. His 401K is connected in that he feels that that is enough since he's putting technically $18,000 in there a year.

I'm so confused. You can put $18,000 in, but if you put $26,000 in, all of a sudden the market's a bad idea. It's completely illogical. Exactly. I completely agree, but he doesn't feel comfortable putting money in, and so I'm thinking that maybe if he doesn't want to do that, can we buy investment property instead,

and technically we're still investing that money, but it's not through the market. Would that still be okay? No, because your decision-making skills are broken. Okay. And if you can't make good, solid, critical thinking skill decisions on your investing investing you're going to use the same broken system to buy real estate with and um i mean so at what point does real estate become risky past 500 000 past a million or just short of 10 million where's real estate risky and so right um you know you have to be able to look at things logically and work your way through them um so no i i think you need i think you guys need to talk this through and uh but and figure

out what it is that makes uh 26 000 by the way you can do 19 000 this year not just 18 000 is max but um at what point does it become risky uh putting in $19,000 versus putting in $25,000? And I'm going to tell you this, just a reminder, Tiffany, for us, if you go to invest in real estate, we're talking about you doing 100% down, honey, right? You've got to have money. You've got to have money to be able to do that. So he's got something going on. And I think talking about it and figuring it out, the goal is, again, to you all to have enough money to be able to live your dreams

later. And so I would talk about those high definition dreams all over again, about what it is you all want to do, the charities you want to give to, the things you want to go do as a family, and then try to re-engineer, reverse engineer that and look to see, does this get you closer to where it is you want to be? Yeah. As far as the market goes, what helps me a lot with investing in the stock market and mutual funds is to understand and know the history. So sit down with a smart investor pro and let them look and show you, let them walk you through. Like with this mutual fund, it's 80 years old. Here's what has happened when the market did this and the market did that.

Here's what happened in 2008. Here's what happened in 1957 when the Russians launched Sputnik and the stock market went down. They beat us into space, right? So the stock market went down. There's all these little events in history, global events, that caused the stock market to go down. Then there's other events that caused it to go up. And so you can look at that, and the more you understand, okay, here was the actual mathematical variance, not the emotions, but here was the mathematical variance, and here's

exactly what really occurred. And the more you understand that, the more you're really analyzing the risk then, and then if he's not comfortable, then it would be logical only to not put any money in. That would be the thing. And if you can say that, then, okay, I hate the stock market. I only want to do real estate. Okay, I can go with that. But $18,000 is all the risk I can stand, but $25,000 isn't.

When I make $250 a year, it's flawed math, Dave. Completely illogical. That doesn't make any sense. This is The Dave Ramsey Show. Hey, it's Kelly, associate producer and phone screener for The Dave Ramsey Show. This episode is over, but if you heard about an event, product, or service and didn't have a chance to write it down, don't worry. We list everything you've heard about during this episode in the podcast show notes section,

or head over to DaveRamsey.com and click Dave recommends. Thanks for listening.