The Ramsey Show - App - It's Possible: Beat Student Loan Debt Fast (Hour 1)

Episode Date: July 10, 2018

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Live from the headquarters of Ramsey Solutions, it's the Dave Ramsey Show, where debt is dumb, cash is king, and the paid off home mortgage has taken the place of the BMW as the status symbol of choice. I'm Dave Ramsey, your host. You jump in, we'll talk about your life, your money. It's a free call at 888-825-5225. Joining us at the bottom of the hour, and make sure you get online and get on the phone lines to talk to him, will be Chris Hogan. Ramsey personality will be with us in the second half of this hour. So America's trusted voice on retirement.

I wish I could do that voice. I can't do it, but I just have a Dave voice. He has the Chris voice. But anyway, we're glad he's coming on and be answering your questions about wealth building and about retirement. And he's got a big announcement today. So some very cool stuff coming. Very cool stuff. Sarah's starting off this hour in Reno, Nevada. Hi, Sarah. Welcome to the Dave Ramsey Show. Hi, great to talk with you. I'm so excited. Thank you. Thank you.

How can I help? Well, my husband and I discovered you about 18 months ago, and we've been so thankful for your guidance as we struggle to pay off debt and get through our Baby Step 2. We are currently in Baby Step 3, but, you know, looking towards the future of baby step four. And I'm interested, my husband and I own a small business, and I'm just wondering what your opinion is on setting up a SEP or a simple IRA with our business and putting our retirement money in that. Okay, when you get to baby step four, yes.

Now, what is in the, how many employees do you have? Well, it's just my husband and I and then a couple part-time staff. Okay. So nobody full-time. We've had full-time in the past, but we've kind of switched gears. We ended up investing in a commercial space and then, you know, doing more work on our own. So kind of putting money around. Sure, no troubles. I don't foresee that we'll end up having, you know, maybe more than one or two full-time

staff anywhere in the future. Well, when you have full-time staff that has been with you more than three of the last five years on a SEP, you have to pay them the same percentage of their income that you're setting aside of your income. So if you set aside 10% of your income, you have to set aside 10% of their income for them on a SEP. So a SEP doesn't work well when you have employees that have been with you more than three of the last five years.

You're better off to go another direction. But when I first started i did a step with this company right here it was just me and until i got to that point that somebody been with me three years and i had to do the same percentages i did that then i jumped to a simple ira which is a 401k for a small business it's very easy to set up and and the only requirement, it's not like a traditional 401K that has a bunch of regulations and requirements. The simple IRA, 401K for small business, basically, really has only one requirement, and that's you put in up to 3% of the employee's income if they make a contribution.

If they don't make any contribution you don't have to put in anything but if they put money in up to the first three percent you have to match and that's the only thing you get into in that both of these you can do in a roth a sap or a a simple ira either one and so what i would do is just sit down with your smart investor pro in your area, if you don't have a mutual fund broker that's advising you on your retirement plans and so forth, and talk through the differences in your situation. Which way can you put the most money aside? Which way is going to give you the most benefit long term?

What are your restrictions and so forth long term? But it sounds like a SEP is going to work pretty well for you guys as long as you can do it as a Roth. Now, if you can't do that as a Roth for some reason, then I would do the simple IRA Roth. I would do that at a minimum. But you can put in a bunch that way and actually can match it yourself, which is very weird. But that's what I do with my own 401K at this company. Now we have a traditional 401K here, and we have a traditional matching system where we match more than 3%,

and I can match myself up to that amount. It's weird, but I own the company, I'm an employee, and I'm the employer. So there you go. But sit down with your SmartVestor Pro. Just click SmartVestor at DaveRamsey.com. Put in your info. It'll drop down a list of SmartVestor Pros in the area you choose from among those that we recommend who you would like to do business with. And they can advise you and walk you through that.

The phone number here is 888-825-5225, reminding you, Chris Hogan at the bottom of the hour. Josh is with us in Charlotte, North Carolina. Hi, Josh, how are you? Well, hey, Uncle Dave, I'm doing well. How are you? Better than I deserve, sir. What's up? Well, I've got a question for you. I have been offered a position with a credit card processing company. Now, I know how you feel about credit cards. I feel the same way. But I was wondering, with this job offer, how do I do some research on this company? Because it's an independent agent, so it's 100% commission,

and I just want to find out all that I can, especially trying to figure out how to find local references on, you know, this company when it's not even really, I guess, known around this area. So your job will be to go into businesses and get them to use this company's processing equipment correct and it's 100 commission correct i don't think so no i don't think that's okay um i mean you can look you can look into it further but i smell i smell a skunk right now i mean if they were if they had a standard sales process, I mean, not because they're credit card company processors.

That's not the issue with me right now. But if they are selling technology into small businesses and they have a track record of doing that, they're going to start you on some kind of a base so you don't starve to death for the first few months getting this going. Okay. Well, there is a draw. I did find out there is a draw with this. How much?

I think it's like $375 a week starting out until you can start making sales and making commissions. Okay. That sounds a little better then, and I assume that draw is not refundable unless you earn. If you quit after three months, do you owe the draw back? Oh, that I don't know. That's one you want to look at. Don't take the draw if that's the case, because you're just borrowing money then. But if the draw is against future earnings only, and there are no future earnings, and then you don't owe it back, then that's something to look at. Now, how to check them out, if they don't have any reputation in your area that means you're going to have an uphill climb selling in your area because nobody recognizes them so that's probably another

problem there's a lot of problems in this uh to work through and to make sure what i would do is just ask the person that you're talking to that's offering you the position, you know, where are some areas where you're well-known? And give me the phone number, the contacts or something for some of your reps, some of your reps that do really well and some of them that just do medium. And call and talk to the people that are doing what you're doing in some other areas and how long did it take them to get going and how hard was it how long have they been doing it? And what kind of money are they actually making? If he won't provide that, I'll pass. If you can't talk to actual people that are doing this on a straight commission job, I'll pass. Because I smell it. I smell it.

If he starts asking for money up front to set you up with your kit, pass for sure. And I think that might be coming. I could be wrong. I don't know. Check it out. This is think that might be coming. I could be wrong. I don't know. Check it out. This is the Dave Ramsey Show. Okay, I need you to listen to this. Because one normal routine that everyone does can cause total chaos in your life.

I'm talking about the simple act of using Wi-Fi. When you're on Wi-Fi anywhere in public or at home, you're at risk of hackers easily seeing every site you visit and every search you're doing online. It doesn't matter if you're on your cell or your laptop. They can see you visiting websites, streaming or downloading, uploading photos, files and more. I'm not telling you this to scare you, but I want you to be aware and take action. You need to download an app called Hotspot Shield. Hotspot Shield helps keep your connection on your own Wi-Fi and any public Wi-Fi secure.

600 million people worldwide have downloaded Anchor Free's Hotspot Shield. Download it right now. Just search Hotspot Shield on iTunes or Google Play or go to hotspotshield.com. You can be secure in seconds. Download Hotspot Shield by Anchor Free today. In the lobby of Ramsey Solutions, Colin and Kristen are with us. Hey, guys, how are you? Hi. Hello, hello.

Welcome. Where are you all from? Kansas City. All right. That's where our new daughter-in-law is from. Oh, okay. So we love Kansas City. Awesome.

Welcome, welcome. Good to have you. How much debt have you guyslaw is from. Oh, okay. So we love Kansas City. Awesome. Welcome, welcome. Good to have you. How much debt have you guys paid off? $95,000. Wow. How long did that take? It took 36 months. And your range of income during that time?

$80,000 to $110,000. Way to go. And what do you guys do for a living? I'm a surgical nurse. And I'm a teacher and an administrator. Very good. Great careers. Well done, guys.

So what kind of debt was this $95,000? 100% student loans. Oh, just like that. Yeah. Okay. And how long have you guys been married? Eight years and a couple weeks. Okay.

So five years into your marriage, three years ago, something happened. Yeah. yeah what happened um well we had a baby okay so uh our oldest was born in 2014 so that's what set us off on this plan so when a baby's born it's wake up call we gotta do something about this debt totally totally and i wanted to be able to stay at home with my kids nothing's gonna keep mama between her and her babies so the idea of going back to work 40 hours a week and putting my kids in day care full time just made me sick so i mean that works for some people and that's fine but for me um that really messed me up and it's a great motivator so um we always knew we needed to pay off this debt but that kicked us into high gear for sure. So tell me how that unfolded.

You come home with a baby from the hospital and you go, uh-uh. No, it was when I had to go back to work. Oh. I was like, I am way more in love with this baby than I realized was even possible. Yeah. And I got to do something. So I started working weekends. Yeah. And I got to do something. So I started working weekends. Okay.

In order to make enough money to where we could pay off student loans and I could stay at home with the kids during the week. Oh, okay. So I worked weekends for three and a half years to make this possible. Okay. So were you doing like 12s? 12s, yeah. Saturday and Sunday 12s.

But I would get paid for 36 hours. Oh, because you were taking the weekend shift that other people don't want yeah i worked 24 hours got paid for 36 wow that's what we have done and his work also game on game on for three years okay yeah so how did you get connected with us in the process how did this um our his sister and her husband amy and adam they really turned us on to your program. And we knew that they started talking to us about you and what they were doing. And they had a sign hanging up in their kitchen that the baby steps. And I remember early in our marriage looking at that thinking, they're crazy.

There's no way we're going to be able to do this. And we did. We did. Okay. to do this and uh we did we did okay so after you decide you want to stay home you called them up and they didn't sound so crazy then no and they said do this baby steps thing yeah basically yeah they and and they told us about your radio program so we started listening to your podcast and um that and hearing other people's debt-free screams is what made us realize this was possible. Yeah, and here you are doing yours. I know. It's surreal.

Well done. I'm proud of you. So, Colin, did you have people cheering you on or people telling you you're crazy while you're doing this? No, we thank a lot of people for a lot of help. So, Amy and Adam, she mentioned them, my sister and brother-in-law, our parents, our connect group people, all of them were with us through this journey. We never really got a lot of pushback or people thought we were really weird, but we had to make a lot of sacrifices. Like weekends, she couldn't go to church, which is very important to both of us.

For three years. Three and a half years. Ouch. Those were watching the kids 12 hours a half years. Ouch. Yeah. I mean, those are, you know, watching the kids 12 hours a day on a weekend. I don't know if I'm built for that. You are now. But I am.

Do what you got to do. So you had another baby during the process? Yeah, we have two. Yeah. So we actually paid off our debt in 24 months. So right smack dab in the middle, we had another baby. So the month I found out I was pregnant to the month I went back to work was a year so we took a year off uh while i was pregnant and on maternity leave so the first 12 and 12 look at you with your 12s yeah okay yeah wow very interesting and yeah you

have to just put push pause yeah until baby number two comes and then play again exactly game on again and finish it up. And boy, now you're really motivated because that daycare bill, well, you didn't have a daycare bill. Exactly. Yeah. Because of the way you worked it. Okay.

Wow. Very cool. So after all of this, what do you tell people the key to getting out of debt is? I think keep communicating. Just, hey, babe, you're overspending. Keep each other accountable. Because both of us had a tendency to, one, go haywire sometimes. I'm like, oh, I'm just tired of this.

I just want to buy something. And we just had to keep each other in check. And I think another big part is to give each other grace, that we're both going to make mistakes. And, hey, I'm here to help you get back up and get back on this train you know was a big deal for me good i think it was um just being able to be willing to sacrifice you just have to you have to have the heart and the desire to you know it's going to do whatever it takes it's been a huge sacrifice for us especially with our schedule to be able to do what we needed to do. But people kind of look at us weird.

Like they say, we can never do that schedule. We can never do something like that. It's like you can, you just have to be willing to sacrifice to do it. You live like no one else later, you can live like no one else. You work like no one else later, you can work like no one else. Right. So very cool stuff. Well done, you guys.

Very well done. Yeah. So did you, the radio show and the podcast gave you all the information you needed? You know, we never did actually technically go through Financial Peace University. I feel like we kind of got it through people and through the radio show and YouTube and all that. So that's one thing I think if we could go back, we'd probably redo that part of it. But we think we got hopefully most of the ideas. You got the information and the inspiration you needed from YouTube and the podcast.

That's all you need. The podcast was huge. That's all you need. I would have liked to have taken the class, but I knew the second step was to pay off your debt. I'm like, well, I'm not going to take this class with this huge step that I have to finish. I know what I I got to do. So, yeah. Cool.

Good for you. Yeah. Well done, you guys. Thank you. We've got a copy of Chris Hogan's retire-inspired book for you. That's a number one bestseller, and that needs to be the next chapter in your story for you to be millionaires, and you should be. Making this kind of money and outrageously generous along the way. So, well done.

How old are you two? I'm 31. I'm 34. Awesome. So well done. How old are you two? I'm 31. I'm 34. Awesome. And no payments. How does it feel? Great. It's just kind of surreal.

You know, we're still saving up a down payment for a house, so we've been living in an apartment since we've gotten married, and with two kids it's starting to get old. It's getting old. We're getting antsy. So, I mean, we feel like we're still pushing hard right now trying to save up a down payment. Are you still working weekends? Yeah.

You're doing that for the down payment now? Yes. Okay. Wow. Yep. Get another goal. Here we go. Game on.

I know. It's like we're finished with this one goal and now it's the next thing. There you go. So, we're still pushing. And I think giving was another huge reason you mentioned that, that we wanted to get out of debt because we want to help people, but it's like we can't with this huge ring around our neck, this weight around our neck. So just a lot more peace about our finances, and I can go out and buy a new shirt or a new pair of shoes.

And it's okay. I don't feel this guilt inside of my stomach, you know, so it's a great feeling. And I would encourage anyone to do it. Love it. Love it. Colin and Kristen, Kansas City, Missouri, $95,000 paid off in 36 months, making $80,000 to $110,000 working the weekends. Count it down. Let's hear a debt-free scream.

Three, two, one. We're debt-free! We're debt free! Love it. Well done, you guys. Very well done. Open phones this hour as we talk about you and your life. Chris Hogan is up here at the bottom of the hour. If you want to join us, the phone number is 888-825-5225.

Chris will be with us, as I said, at the bottom, answering your questions for the next 30 minutes. Going to hang out with us. And got a possible big announcement. Yeah, that could happen. Yeah, Chris has been known for big things. So there you go. Just be watching.

Watching the big boys. There's lots of stuff that could happen here. So check it out. This is The Dave Ramsey Show. Thank you. Hey, this is Dave Ramsey. You know, most of us have gotten behind on our bills at one time or another. That's nothing to be ashamed of. It happens. And many of us know the embarrassment that comes with those harassing calls from collectors.

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These folks will connect you with an attorney who I know can help you. These attorneys know how to stop collection agencies from bullying and threatening you anymore. CollectionBully.com. Go. CollectionBully.com. Go to CollectionBully.com today. That's CollectionBully.com. Open phones this hour. Chris Hogan, Ramsey personality, number one best-selling author, joins me this half hour to answer your questions. Phone number here is 888-825-5225.

His number one best-selling book, Retire Inspired, launched a podcast that was very successful by the same name, Retire Inspired. We sure did, Dave. But a big announcement today on that. Well, it is. It's a big deal. We had so many calls coming in, people with questions, people wanting to talk about things bigger than just retirement. So guess what?

We're going to rename the show. Okay. We're going to rename it to The Chris Hogan Show. That's original. Well, this good man I know has paved the way. And so... We have The Ken Coleman Show, The Dave Ramsey Show, The Chris Hogan Show, The Rachel Cruz Show on YouTube.

Right. So we're really original with our naming process here. We are. I know. But that's okay. That's okay. At least we know what it is. And you won't get confused.

There can be no confusion. We know what we're gonna get you know who you're listening it's not gonna be rachel it's gonna be chris the chris hogan show yes yeah and the good news is i mean you've got this millionaire book coming out next year from the millionaire study that we've done uh the team here with you and that that manuscript is being completed now we'll start the pre-sale on that book and so there's gonna be a lot of questions about millionaire stuff that's right um you probably do a millionaire theme hour on that won't you yeah we'll definitely plug in yeah later on as that book comes out that would make sense it really would and uh and you know all of that is still on topic for you of making sure people retire with dignity but you can take questions about

anything about money just like i do you absolutely and we've been talking to people about financial peace university we've got people on there that have been coordinators that are plugging in and are looking to give back that have hit millionaire status we've got people with questions about inheritance uh dave i mean it just goes on on. How to buy a home the right way. A lot of the things we cover in Financial Peace University, which is the nine-week course out there that's available to people to really help them learn how to deal with money. And so I'm excited to really open it up, take the calls just like you, and to really dive in and to help people right where they are. Well, that'll be perfect. And, of course, you've been filling in here when I'm out some, especially this summer.

You've been on here, and you and Ken and ken and rachel everybody christy here by jumping in and out that's perfect so the first episode of the newly named chris hogan show releases tomorrow tomorrow very first one so you'll have an opportunity to hear the new intro music to see the new graphic we got new oh it's all brand new graphics everything Oh, it's all brand new, Dave. New graphics, everything. It is. It's brand new, and I'm excited. So I can't wait. I want people to tune in, listen to the show, and then tweet me to hit me up on social media and let me know what you think.

Yeah. And you can call into the show. You sure can. The phone number is 844-283-9383. 844-283-9383 now why that matters is it's a podcast so it's obviously not a live broadcast duh but how are you going to connect with chris well you just leave a voicemail and they'll get right back to you you can even email in your question and they'll get back to you and set you up not telling you what to say but set up a time for you to be a caller on the podcast, the Chris Hogan Show podcast.

You do that at the email ask at chrishogan360.com. Ask at chrishogan360.com. So this is exciting. It's big, Dave. I'm very excited about it. I want people to call in, email in. I want to hear your success stories. I want to hear your questions and really dive in because, as you know, Dave, there are people that are listening to the show that have the same question.

They're looking for guidance. People are looking for the truth. How can they get better and how can they improve? And our job is to guide them. And so I'm looking forward to doing just that. Yeah, so they get to live their story. That's right. We just show them how.

All right, Hannah is with us in Atlanta, Georgia. Hi, Hannah. Your question for Chris Hogan and me. Hi. So I am a recent graduate. I have about $1,500. Wait a minute. Stop.

Stop. You're not speaking directly into your phone. We can't understand you. Try again. Can you hear me now? Yes, ma'am. Hello. Stop. You're not speaking directly into your phone. We can't understand you. Sorry. Can you hear me now? Yes, ma'am. Hello. Yes, ma'am.

I'm a recent graduate. I have about $1,500 in credit card debt and then $31,000 in student debt. And I'm still in that grace period where I haven't started to pay my student debt yet because it's like so I don't have to like pay the interest or anything yet and I just got an inheritance from my grandmother of $22,000 and so my question is I know that I need to go ahead and pay off my credit card debt because that's like the really bad interest and stuff but do I go ahead and pay my student debt like from what's left over of that 22 after I pay off my credit card? So I pay it in one big lump sum before I have to start paying interest and then just kind of like snowball the rest of it. Like once I, you know, get that paid off or do I pay it like monthly and do it that way? I'm not really sure what to do. So what is your income?

So right now I'm a nanny and I work three days a week at $14 an hour, but I'm going in for an interview tomorrow as a marketing coordinator for a company. You just graduated from college? Yeah, so I'm in the job hunt right now. Okay. All right, good, good. If you found a job job would you move cities no i would i would stay where i'm at are you living with your parents right now i'm living in kensal you're living where in kensal georgia okay but that's not with your parents no it's not with my parents okay chris yeah hannah as you are looking at it now, just graduating,

how are you planning to pay for your rent and your living expenses where you're living in Kennesaw? Well, so right now, my parents are helping me out with my rent until I get a job, but once I get a job, it would just be budgeting and putting back money where I can. Okay, okay. So you are focused and you're moving forward. If I'm in your shoes, what I would do with this inheritance, because this is a blessing from your grandmother, is really to take a deep breath, take a step back and understand you want to move forward with this.

Following the baby steps, I'm going to set aside a $1,000 emergency fund. That's cushioned between you and life happening. And leave that alone. That needs to just sit there. And then from there, what I would do is begin to attack the debt just like you've identified. And I think that's important to do. And so, yeah, you pay off the $1,500 in credit card debt. And what I might do is I might park that money, the rest of it, after you do that in a savings account for a month or two until you land the big job.

When you land the good job and you've got your budget stabilized, I'd clean that account out and leaving $1,000, like Chris said, and pay the rest of it on the student loan debt. If you get a job making $40,000 or $50,000, you only have $11,000 in debt left that way. And you can clean that debt up very, very quickly if you go ahead and apply all of this to the debt. I might hold off on not applying at all to the student loan today until you land the big job. And as soon as you land the good job, or if you can go ahead and get more hours nannying or doing something else to carry your own weight. But right now, if your parents are supporting you, I might use some of that money to support myself until you get the big job. And then once you've gotten that, that's applied all but $1,000 to the student loan

and then attack the student loan with the big job as soon as you land it. So if you got the job you interviewed for, this is all going to happen in August. Yeah. And Dave, she mentioned something about when it comes time to pay on that student loan loan debt should she hold on to it and just pay monthly or pay a lump sum i'm going to pay a lump sum as fast and as hard as i can just to get them out of your life because everything is fast and as hard as you can go because people say that and they intend to hold on to it and they make monthly payments the problem is is then you get normal to it so stay allergic to it attack it with the lump sum when you start to get

that real job as dave is talking about then you can finish paying off the rest but stay focused and i'm proud of you yeah very good good stuff open phones this hour joining me chris hogan number one best-selling author ramsey personality the book is retire inspired the new podcast releases today the first episode of of The Chris Hogan Show. He was doing a podcast called Retire Inspired. It was very, very popular. He's going to be talking about things in addition to retirement, like the new millionaire study and taking questions from you.

If you want to call into that podcast, call and leave a message at 844-283-9383 or email us at AskChrisHogan360.com. Ask at ChrisHogan360.com. Back with more of your questions here on the Dave Ramsey Show. So so By the time I was 26, I had $4 million worth of real estate, and then I lost it all because I didn't do it the right way. That's why I feel so strongly that buying real estate is an incredible way to build wealth,

but only when you're debt-free and do business with people who have your best interest at heart. My friends at Churchill Mortgage have been showing people how to build wealth through real estate for over 25 years. Their whole program is engineered around having better information so you make smarter decisions for your family. Whether you're buying your first home or your last, Churchill Mortgage is the only lender I would trust. I trust them. My team trusts them. And so should you. You need to call Churchill Mortgage today at 888-LOAN-200. That's 888-LOAN-200 or churchillemortgage.com. This is a paid advertisement. NMLS ID 1591. Equal housing lender 761 Old Hickory Boulevard, Brentwood, Tennessee 37027. Up next on the Dave Ramsey Show is Jillian in Rochester, New York. Hey, Jillian, how are you?

Hi, Dave. Good, thanks. How are you? Better than I deserve. What's up in your world? Hi. Okay, so I had a question. I wanted to make sure that my husband and I were on the right track. We have two loans left, a personal loan, which is roughly $11,000, and then a school loan, which is $45,000. We should have the $11,000 paid off in the next few months, but we're going to school loans.

So we are on the loan forgiveness program, and I've heard you talk about it. Our forgiveness portion comes up in January of 2021. So what we're intending to do once we pay off the personal loan is ultimately accumulate, you know, save a bunch of, save all our extra, quote-unquote, extra funds, put it in a savings account. And then if the loan forgiveness falls through, pay it off in a lump sum. And if it goes through, fabulous. And then split that money then between a few home improvements and then the 529s for our kids. If it goes through, yeah. But before that, you ought to be going ahead and doing those things because you should be debt-free,

effectively debt-free by setting that money aside long before that date. And so you need to move on through the baby steps. So when you're debt-free, the next thing you would do is build an emergency fund, right? Right. And that means when you've got forty five thousand dollars in savings because you're going to ride this thing out then that then you're through with baby step two okay then you'd move on to baby step three do your emergency fund then you would start uh saving for kids college and doing home improvements and those kinds of things baby

steps four five and six at that point, you should be well down into that before the forgiveness date comes up. It shouldn't take you three and a half years to get out of debt. Okay. So with the lump sum then, okay, so leave that in savings so that way we will have it paid off. That'll just advance something that's going on in Baby Steps 4, 5, and 6 when you get there.

Yeah, Jillian, this is Chris. Do you have a reason to doubt on the forgiveness? You sound skeptical. Well, I mean, you never know with the government. And I don't, I mean, I trust them, but I don't. Right. You know what I mean? So, I mean, we've heard this before. My husband's a teacher, and, you know, on the previous political,

well, the past president, you know, said that he was going to do all these things for teachers, and that did not happen. So that's where I'm skeptical. Yeah, I'm skeptical of the whole program, but I'm also skeptical that, I mean, there's been stuff with the Department of Education saying that some of these aren't going to go through, that they were promised, and all kinds of stuff happening. And that's the current administration as well as the past ones. So everybody is pretty much screwed around with this program.

Plus, I don't want you to wait three and a half freaking years to be debt-free. So we're going to treat you like you're debt-free when you have $45,000 in the bank to pay this loan off, and then you move on to baby steps 3, 4, 5, 6 along there, and then depending on where you are in that process, then you'll decide what to do with that money when you get there. Does that make sense? So if we have the $45 45 000 prior to that three and a half year mark you better have or wait you better have it should not take you three and a half years to get out of debt what's your household income um 110 okay and you have

56 000 in debt so you should be debt-free in less than two years. Okay. Okay, which means the $11,000 is gone, and there's $45,000 in the bank two years from today. Okay. That's a year and a half before the debt is forgiven. Right. During that year and a half, you're going to move on to baby step three fully funding your emergency fund then you're going to move on to whatever home repairs you're going to do and you're going to start putting 15 of your income into retirement and start your kids college funding then that year and a half is going to come up and you're going to have that 45 000 laying there and i'm

probably either going to throw that in the kids college at that point if you've got additional home improvements fine or i may throw it at the mortgage somewhere in there but you should be a year and a half down into your other baby steps by then does that make sense yeah okay yeah that's how you i want you to do it otherwise you're screwing around with this thing and you're doing what the loan forgiveness is causing people to and you dumbed down your plan and agreed to stay in debt longer. Yes. Because, but the way we're treating this, it's as if you're out of debt because you have enough money in the bank extra to pay the student loan off.

Dave, that's the perfect scenario, and a lot of people forget to think that way. These forgiveness programs, I've seen them out there. If you're late on a payment, if it's in repayment, you're disqualified. There are a lot of little nuances to it. So I want to encourage the listeners and Jillian, get your paperwork out, read it clearly, understand what's going on, and then follow the plan that Dave just told you. Having that money set aside, the $11,000 paid off, take what you were paying on that $11,000, add to what you would be paying on that student loan that's in deferment, putting that aside, and you store up in the bank and get ready to pay it off

if they fall through and they don't do what they promised. There you go. That's how it works. Open phones at 888-825-5225. Mark is with us in Toronto. Hey, Mark, how are you? Hello, Mr. Ramsey. Hey, Mr. Hogan.

How are you guys doing today? Better than I deserve. How can we help? So I am just calling to ask. I'm 20 years old, pretty young, just finished paying off my last year's school debt, which was about $4,000. I've put away the money for the emergency fund, and now I'm looking to start investing. And I know you guys' investments are a little bit for people who are a little bit older. And I was just wondering, how do you look for mutual funds and other investments that can bring you a good return on investment without having to go through all the paperwork and go through all the research that comes with that, so to speak? You shouldn't invest money in something that you've not done some research on. Okay. How old are you?

I'm 20. Okay. At 21, in the States, you can do mutual fund purchases. I don't know what it is in Canada. We don't have advisors there that we recommend or anything else. Is it 21 there? No. Technically, it's 19, but I'm working because uh i worked with my mother i had a brokerage account with my mother uh a while ago

a while back from 16 so i just still work through that with her uh she's just the actual uh adult on the account and i still work through that account with her as well okay well we would have you be debt free before you build the emergency fund. And so if you've got enough money in your savings today to pay off your debt, I'd write a check today and be debt-free. Oh, yeah, yeah. I've already paid it off. I've paid it off. I thought you said you had $4,000 in debt left. No, no, no. I just finished paying off the $4,000. Oh, I misunderstood. thousand dollars no and i had the four thousand dollars paid off and i have the emergency fund

built up built up to it was about nine hundred thousand dollars so now i'm looking to to starting to invest uh because you know i kind of want to start building uh the wealth now as opposed to waiting till 40 50 uh and apparently it's it'd be a little bit later no it. No, it's not going to be much. I mean, you finish your emergency fund and you can go ahead and start putting 15% of your income away. There's nothing to wait on. You may have to wait until 21 to put it into your name instead of running it through your mom's name. But up until then, you can, you know, for the next year, you can run it through your mom's name. But you finish the emergency fund, you're debt-free,

and then our system is marked that you put 15% of your income away. If you start at 20, you're going to be very wealthy. He really is. I'm very proud of him. At 20 years old, to be plugged in to the information, following the plan, following the baby steps. And, Mark, I just want to encourage you. You definitely need to read. You need to understand what it is you're investing in.

You don't want to take someone's word for it. You need to know how it works, and you need to be able to explain it to someone else in very basic terms. If you don't understand it, don't invest in it. And so I'd encourage you, check out Dave's website, DaveRamsey.com. Go to my website, ChrisHogan360.com. We've got information on there about investing and how you can reach out and get connected with the right kind of professional for you. There you go. Chris Hogan, The Chris Hogan Show releases tomorrow.

So excited. That is the name of the podcast, the new name of the podcast, all new setup. And you can send him questions and be part of that podcast at askatchrishogan360.com. Thanks for stopping by, sir. Thank you for having me, Dave. This is The Dave Ramsey60.com. Thanks for stopping by, sir. Thank you for having me, Dave. This is The Dave Ramsey Show. Hey, guys. This is James Childs, producer of The Dave Ramsey Show. I'm excited Rambzy.

I'll see you next time. Bye-bye. Bye-bye. Bye-bye. Bye-bye. Bye-bye. Bye-bye. Bye-bye.

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Bye-bye. Bye-bye. Bye-bye. Bye-bye. Bye-bye. Bye-bye. Bye-bye. Bye-bye. Bye-bye. Bye-bye. Bye-bye. Bye-bye. Bye-bye. Bye-bye. Bye-bye. Bye-bye. Bye-bye. Bye-bye. Bye-bye. Bye-bye. Bye-bye. Bye-bye. Bye-bye. Bye-bye. Bye-bye. Bye-bye. Bye-bye. Bye-bye. Bye-bye. Bye-bye. Bye-bye. than you know, I get calls and emails from people dealing with the recent loss of a spouse or a

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