The Ramsey Show - App - It's Time To Go From Intense to Intentional! (Hour 1)

Episode Date: January 11, 2021

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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. Anthony O'Neill, Ramsey personality, best-selling author, is my co-host today as we take your questions about your life and your money. Open phones at 888-825-5225. That's 888-825-5225.

Melissa is with us in Las Vegas to start off this hour. Hi, Melissa. How are you? Good. How are you? Better than I deserve. What's up? So back in March, I was one of the people that lost their jobs to COVID.

And fortunately, we weren't in debt other than our mortgage. So buckled up between my husband always being the breadwinner anyway. Just use your EveryDollar app, really focused on budget. And we've actually been able to save eight months for an emergency fund. Wow. Good for you. Yeah. Yeah. As a family of six. Not easy. But now we're to the point where January of this year, and I talked to my husband about some goals I might have this year in terms of home improvements, you know, maybe a vacation down the road after being on lockdown this whole time. And he's like, let's just keep stashing it away.

Let's just keep stashing it away. And it's sitting in a regular savings account, number one. I don't know where else to plant it. But number two, how do you get over that kind of guilt that we've done so well when you see others not doing as well? And at what point do you relax and take your foot off that gas and, you know, enjoy some of that? Really good questions. I'm so proud of you.

Absolutely. What a great job. Yeah, yeah, yeah. Melissa, let me ask you this. Are both of you all back to work right now? I'm not working. The field that I'm in, Vegas being a hospitality industry, it's just not there. Yeah, for sure.

Okay. Well, here's the thing. There's a couple of answers to your question uh you had two or three questions number one uh the first three baby steps one through three are with gazelle intensity and that's what you've done and that's not doing anything that's not going out to eat that's not going on a vacation it's not buying anything we're getting out of debt and getting the emergency fund in place those foundational items are an emergency until you get them done then when you hit baby steps four five six you let your foot off the gas and you go from intense to intentional okay and what that means is you don't do anything by accident but you allow yourself to do some different things like for instance you could go out to eat then.

For instance, you could save up beyond the emergency fund and buy a car or go on vacation if you wanted. That kind of a thing. Meanwhile, you're starting your retirement, you're starting your kid's college, and you're beginning to work down on your home. Baby steps four, five, and six, right? And so from intense to intentional, and that's where you are, your emergency fund sitting in a savings is fine.

You can put it in a money market. It's never going to earn much money. Anthony and I always tell people it is not an investment. It is insurance. It's not there to make you wealthy. It's there to protect the things that make you wealthy. So don't expect that $8,000 to make you rich. And you really don't need to pile up more than that if that's three to six months of expenses.

Right. Any piling up you do beyond that. No, we have eight months of expenses. Okay, you have too much. You have too much. Yes, that's where we're at. Okay, set aside six months in a separate account just for emergencies and don't expect it to do anything except sit there.

It's your umbrella in the corner. You don't need to get it out of the corner unless it rains. Right, right. And then I would take that two months to answer the next part of your question is, when do we have a good time? Like, when can we really enjoy it? So I would take that one month and enjoy it, then take the other month and look into investing it. But I think you have worked hard throughout the whole 2021. You went over and beyond.

But you're right. I think, like Dave said, be intentional. And I think sometimes we have to be intentional and enjoy some of the fruit of our labor. And so I would take that one month. Maybe just take you and your family out. Let y'all just breathe. Stick within that budget. But then make sure you're still doing baby steps four, five, and six during this time as well.

You know, the way the brain works, it's kind of like a pendulum, if you think. If you think most people are on the pendulums all the way to the left. They're disorganized. There's no intentionality. They just stuff happens to them. They don't happen to it. And they wonder why they're broke. Right?

Mm-hmm. Then when you swing it all the way over to the right that's gazelle intense and we're beans and rice rice and greens we're not doing anything except piling up debt right and now all i'm saying is swing it back to the middle never go all the way back to the left the middle is just be intentional but not intense and that's where sharon and i have lived for many many years and the amazing thing is you can build a tremendous amount of wealth and be tremendously generous in the intentional phase you don't have to say gazelle intense to become wealthy you do need to go gazelle intense to get the mess cleaned up number one and number two to carve new grooves in

your brain because the old grooves in your brain that most people use are stupid. Yes. And they don't work. Right? And that's what you did by this period, this year, prove to yourself and to each other that we can do this money thing. Right? Right. But you can't sprint a marathon.

And you've been sprinting. You sprint the first, you know, mile here. But then you've got to let up and get into a rhythm. And that's where we do when we go across Baby Step 3. So that's a really, really good question. As far as all the other people and where they are, the guilt about that? Dave, I'd just be grateful for where I'm at and acknowledge where they are. But at the end of the day, I'm grateful that I can take care of myself and my family and I serve and help whenever I can.

Yeah. What I don't like is Dave Ramsey followers on social media trashing people who aren't doing it. All you got to do is just go, hey, I'm doing it. This is what I'm doing. All you got to do is talk about you. You don't have to go fix everybody else. And if they don't win, it's most likely. likely i mean there's several reasons people don't win with

money most of them are our own fault most of them are the person in my mirror sometimes there's outside forces that impact it also but most of the problems with my money in my life are caused by me and that's that's the thing so you can't you know i you know because someone didn't have the advantages of knowledge that i had you know some people didn't have the benefit of having been homeless like you right living in their car and some people haven't had the benefit of going broke like i did right and holding my baby brand new baby in my arms and not knowing how I'm going to buy the food. Some people have never had that benefit. And I say it's a benefit. Yeah, it is.

It's a privilege. I'm privileged in that regard. You're privileged in the regard that you lived in the back of your car because it changed your life forever. It changed your paradigm forever. And not everybody has that benefit. Some people had to just live medium, and they never get off of medium because medium's good enough. And here it is, Dave. The reason why it changed your life going broke, but your life was changed to change others.

Yeah. Her life was changed when she lost her job. There you go. And they scared them. Yes. I got four kids. We're going to get on a plan. And they got eight months saved now in the middle of a dadgum pandemic.

Look at you. See, now, I mean, everybody's got an opportunity to do something. It's just a matter of what and when. There it is. This is the Dave Ramsey Show. I'm going to go on a little rant here for a minute. I took a call from a father who wanted to know how to plan for the care of his special needs daughter after he dies. Why is it that parents of special needs children are so deliberate in their planning while other parents have a tendency to be sloppy? Do the needs of your family matter less if something happens to you?

Oh, I'm sorry, did I just guilt trip you into getting some term life insurance? Well, then good. Your family needs you to step up. Having the right amount of term life insurance is a matter of personal responsibility. If you want to use the new year as a reason for doing the right thing, then do it. Term life insurance is something every family needs, which is why I talk about it every day. It's not complicated, it's not expensive, and you need to do this now. Zander Insurance is the only place I recommend.

Visit Zander.com or call them at 800-356-4282. Please learn from other people's mistakes and get this taken care of. That's 800-356-4282 or Zander.com. Anthony O'Neill, Ramsey personality, is my co-host today. Open phones here on the Dave Ramsey Show at 888-825-5225. Lindsay is in Fredericksburg, Virginia. Hi, Lindsay. How are you? Good. How are you?

Better than I deserve. What's up? So my husband and I are on baby steps four five and six um and we are looking at selling our rental property and we are currently using the income that we receive from that property to fund our retirement and it is about four hundred dollars a month um and then my husband puts in his his company's 401k match. So my question is, we're looking at between how much we still owe on the mortgage and the possible list price of the home. We're looking at about $80,000. We need to know what to do with. So since that house is funding our retirement, the debate is, do we use it to, do we put it in a savings account and then just pull out monthly what we need to continue our 15%

retirement? Or do we, we just need to know what to do with it, I guess. You should be able to do 15% of your income into retirement out of your budget. So our monthly budget currently doesn't have enough room for the $400. What's your household income? About $67,000. And how much are you putting into retirement? Well, we put the $400 a month from the property. And then my husband does his 401k match. So, Lindsay, does it...

I forget exactly how much that is. Does your $6,000 to $7,000 include the money you're getting from your rental properties? Or is that separate just from your job? It does not serve just from jobs. Okay, so I think what Dave is asking, are you doing 15% of the $67,000 without the rental property?

Yes. So the $67,000 does not include our income from the rental property. I got that part. Are you investing 15% of your $67,000 does not include our income from the rental property. I got that part. Got that part, yeah. So are you investing 15% of your $67,000? Yes. Okay. All right.

Because you should be at about $10,000. You should be about $800 and something a month going in. And $400 a month coming out of your husband's check or whoever's check, you should be able to do $800 a month on a $67,000 income without having to supplement it. Okay. Something's wrong with your budget. Your budget's being eat up with something else. Yeah, it is with our current mortgage.

How much is your mortgage? So currently, monthly, we pay $14,000, I think, with our mortgage. $1,400. $1,400, right. Yes. Sorry. $100, sorry. And your take-home pay is $38,000. Yeah, you have a high mortgage payment.

Your payments are... We do, sir. It's about 42%. Yeah. I recently... When we got the mortgage, I was also working full-time. I recently... What's the interest rate on the mortgage?

We stay home with our daughter. What's our interest rate on our... Mortgage. Mortgage for the rental property or for our current property? No, your current property. Our current property, it's 44.25%. Okay. Here's our fix.

Okay. Refinance the home and put the $80,000 into the refinance. Okay. And that will lower your payment and your interest rate both okay then you'll have room in your budget to save 15 the reason i knew there's something wrong in your budget because i've done you know tens of thousands of budgets over 30 years and 50 you can save 15 of your income if you don't have too big a house payment and you're out of debt right and um you know at any income you can do that if you don't have too big a house payment and you're out of debt. Right. And, you know, at any income, you can do that if you don't have too much allocated to housing.

That's why it's a ratio. That's why we don't have a set amount going into retirement. We say 15%. Yeah. So, yeah, if you want to splurge, carve off a little of that and, you know, hit a hit towards the kid's college and babysit five as you drive by to six, that's fine. But I think if you'll refinance your mortgage with $80,000 down and get you a cheaper interest rate, and while you're at it to a 15-year, you're probably going to end up with a lower payment at that point. And when you made the choice to come home and be with your baby, that's okay.

But you might have made the choice if you hadn't sold the rental to sell your home because you got a home you couldn't afford at that point. But it looks like you can now that you've done all this and so it worked out i was gonna say that fine is that an option to dave sell both and then go buy a property that you know that is what below the 25 or right at at least a 25 yeah because if they can sell that current property and have 80 000 equity depending on what their house is they got a hundred thousand dollars they could put towards a a good home exactly and what what i would do before i tried that is let's try to get the 42 percent fixed yes okay because the problem with a payment that's 42 percent of your take-home pay

is what we just discovered right took us a little while to get there but what we just discovered is that you don't have room because of your house to build wealth. And you become house poor. There you go. Because you've got too much tied up in your monthly payment on your house. So the fix for that is sell the house, number one, or do something that gets that payment down or gets your income up. Yeah. But if you're going to choose out there, it's okay to choose to quit your job and come home and be with your baby. Yeah.

I'm fully supportive of that decision. But sometimes when you decide that, unless his income is on an upward trajectory, you're also saying we now have a house we can't afford. Yeah, and I think, America, I want you all to hear this too, and I really want you all to don't miss this. She was through baby steps one through three. She already had, she was out of bed. Doing good.

Doing great, but then still living in kind of stress because he wasn't being intentional about making sure that they can get that 42% down to 25%. Either his income goes up, or in this case, we found some money to get the mortgage down, or the house has to go away. Yes. So, I mean, you don't have to do it if his income, you know, if two years from now his income's going to double because he's on some kind of upward trajectory, you can hang on and be okay. But, you know, it's not a two-month thing. It's not, nothing's on fire here. But the point is, mathematically, you can't fund retirement adequately and other things. You know, next time you get ready to buy a car, it's going to be a payment because you

haven't had the wiggle room in your budget to save up for a car. Yeah. And it gets you in trouble. So, Lindsey, you guys are doing a really good job overall. Just a couple of adjustments there, and I'm really proud of you. Good work. Nick's with us in Jacksonville, Florida. Hi, Nick.

How are you? Hi, Dave. Thanks for taking my call. I'm very well. Sure. Good. How can we help? Well, let me give you a little info.

I am 35. I am divorced. I just finished my associate's degree. No alimony, no kids. But I do have $33,000 in credit card debt, $32,000 in student loans. I just started my first semester of my bachelor's degree. I'm very excited about that. And my goal is to finish my education without taking any more student loans. That's good. And so right now I make about $4,600 a month net. And my outgoing is $3,800. And I've cut my expenses where I can. I'm paying $500 a month on my credit cards.

Since I'm still in school, I don't have to pay student loans yet. But I'm paying about $700 a month out of pocket for tuition. And my car payment is $425 a month. Now, I own $9,400 on my vehicle, and it has a trade-in value of about $7,400. But I got an offer to trade it into the dealership at an unspecified above value. I was looking at similar vehicles, and it looks like I could lease a similar vehicle for $200 a month. I've got two years left on this six-year loan for my car. Should I trade it in and lease a vehicle for two years so that I can put an extra $200 towards my debt? No, I'd stick with what you got. Yep.

It's a real tough binge, but it's a short pitch. And your worst case scenario is you've got to pick up some extra work while you're in school, which is going to be very strenuous. But if you could kick your income up $1,000 a month, it changes all this equation. Yeah, yeah. And Nick, you're doing a great job. I love how you broke down your numbers. You know where you are. That's a big deal. That's huge, man. So I agree with Dave. a great job. I love how you broke down your numbers. You know where you are. That's a big deal.

That's huge, man. So I agree with Dave. Stick right there. Get a little bit more income. You're going to be all right, bro, in two years. Yeah, this is tight. You know where you are and you know what you got to do. And so you're looking at options.

But now, here's the thing. The right financial decision almost always is harder in the short term and better in the long term. The wrong one is always better in the short term and better in the long term. The wrong one is always better in the short term and worse in the long term. And most people do the second one. That's why they're broke. And that's where this falls in that category. This is the Dave Ramsey Show. www.rimbaracer.com Anthony O'Neill, Ramsey Personality, is my co-host today. Open phones at 888-825-5225.

Check out his episodes, The Table, on YouTube. His YouTube show is called The Table. A lot of folks around The Table having a discussion at different times, and thus the name. But always good content there. Fun stuff, too. Yeah, it is. It is fun stuff. And thought-provoking, all of that kind of stuff.

So check out The Table on YouTube. New episodes every Monday from Anthony O'Neill. Of course, his book, Destroy Your Student Loan Debt, one of our Ramsey Quick Reads, as well as the whole idea of Debt-Free Degree, which was a number one best-selling book, a full-on book there, and all of that, Anthony O'Neill's ways of serving you guys, anthonyoneill.com, you can learn all about it. Open phone's at 888-825-5225. Christopher is in Lubbock, Texas.

Hi, Christopher. How are you? Doing well, sir. How are you guys? Better than I deserve. How can I help? All right. So we have a question.

Back in February 2020, my wife and I, we closed in on the house that we're not living in due to the fact that my wife is a residential hall supervisor at a college. And so after we closed on the house in March, we found out about Dave Ramsey and the whole babysit. So now we're kind of stuck. Should we sell the house even though we will have to pay off around $6,000 out of pocket and walk away with no profit from the sale? Or our next best option is to rent it out or ask someone to live in it for free,

but they would have to pay the utilities only because we need somebody living in it. We don't live in it, and we'll be living here at the residential hall for two more years, and the closing cost would be like about $5,278. Who said? dollars who said uh just we use the two elps that you have on your uh on your website we talked to two of the realtors in our local area and so they gave us they ran the numbers around that um we're still trying to figure out which is the best realtor to go with so we're still in that process right now. Okay. But what you're basically saying is you didn't put anything down on the house and you don't have any money.

Yes, sir. Almost nothing down, thus you have no equity. So when you try to sell it, you're going to have to write a check? Just because of the closing cost, yes, sir. No, because you don't have any equity because you're putting down payment down. Yeah. Okay. Yeah.

But the closing, you're out of pocket. They're estimating it's going to be five grand. Yes, sir. In order to get it sold because you don't have any equity at all. Yes, sir. And the house is in Lubbock? No, so we live about 45 minutes outside of Lubbock, and that's where my wife is the residential hall supervisor.

And so we paid off $27,000 in car loans already since we started the Baby Steps in March. And now we're here with the house, whether to sell it or to rent it, to see what's best for our income and family. We have an income of about $40,000 right now. How much debt do you currently still have, Christopher? Our student loans combined is $98,600.

Okay. And how much is the mortgage payment right now? $630,000. Okay. You can save up to $5,000 in two months based on the rate which you paid off the $27,000. Yeah. And, yeah, save up the $5,000, write a check, and sell the house. Yeah. Yeah, you bought a house when you were deeply in debt and broke. Yeah.

Yes, sir. And it's become a curse to you rather than a blessing. Yes, sir. Yeah. I'm sorry curse to you rather than a blessing. Yes, sir. Yeah, I'm sorry. What a horrible thing to go through. But the good news is you can learn this lesson at your age and never have to do it again, right? Yes, sir. Yes.

What are you doing? Yeah, go ahead, man. Should we get a personal loan if closing costs are too high for us to cash flow? No. You should cash flow them in the next two months. Yeah. You should be able to save $5,000 in two months based on the fact that you paid off $27,000 since March. You see? That same rate of paying off debt, you can save up $5,000 in two months and then by, you know, get the house

on the market in one month, it'll take a month to close it anyway. And by then you'll have the cash to write a check and you won't have any loan in order to get rid of the house. I don't want you to get a loan. I just want you to get rid of the house. Right. Yeah. And I was going to say, too, as well, Christopher, figure out a way, what can you do extra on

the side to generate like another $10,000 this year to help you go towards your debt? Yeah. But because $40,000 is, I mean, that's okay. I'm going to be real with you. But you need more so you can get out of this $90,000 quicker. $98,000. $98,000. So nearly $100,000 in student loans.

And here's the plan, okay? When the two years is up, if you're not going to be getting free housing anymore, you are a renter. Yes. With $98,000 in student loan debt debt you're still going to have some of that student loan debt at that point and you are a renter until that student loan debt is gone and until you have an emergency fund of three to six months of expenses saved and until in addition to those two things you have your down payment saved up were you in that situation right now

you wouldn't have ever called me. Yes. Because you would have had equity in the home, and if you didn't, you'd have had an emergency fund to write the check to cover the closing costs to get rid of the home, and you would have had also more wiggle room in your budget because you would not have had $98,000 in student loan debt. So do not buy a home, folks. This is exactly the reason we tell you not to buy a house until you're out of debt, you have your emergency fund,

and you have a good down payment in addition to those two things. It'll bite you. And look at it, Dave. He went in there thinking he was buying something that's going to be a dream, and now it's a nightmare. He's trying to figure out how to get out of it. And so instead of you making money off of the house, you're spending more money to get rid of the house that you fell in love with.

So this is why we teach what we teach, because we want your dream to become and stay a dream. Yeah, not a nightmare. That's a good point. Good point. Tomorrow night, Chris Hogan, Rachel Cruz, and Craig Groeschel and I, Pastor Craig, will be at his church at LifeChurch.TV in Oklahoma City doing a live stream. There'll be close to 200,000 of you watching the reset live stream. It may be over 200 by then. It's approaching it now.

And it was 173 this morning, and yesterday was like 30,000. So it'll probably be over 200. But anyway, doesn't matter. Minor issue. We're going to teach you how to reset after 2020. 2020 was your wake-up call. It either scared you or it punched you in the nose and you lost your job or you had a real problem or whatever.

But hopefully you got a wake-up call and you said, hey, we're never going to be vulnerable again when the big bad wolf comes around. We're going to be in the brick house. So we're going to talk about that tomorrow night. It is a free live stream, January the 12th, Tuesday night at 7 p.m. Again, Chris Hogan, Rachel Cruz, Craig Groeschel, me. Rachel's going to be talking about Know Yourself, Know Your Money, the content from her new book that came out a week ago.

And thank you for the number of you that have trusted us with that. Absolutely incredible number of sales on that book. And Craig Groeschel, Pastor Craig's going to do a talk. I asked him to do that. I'd heard him do before, and he's adjusted a little bit on discipline, and it is absolutely amazing. And, of course, Chris Hogan and I are going to walk you through the actual tactical things you need to do with money. And if you want to watch this live stream live, all you have to do is text the word. It's free, by the way.

I mentioned it's free. Text the word RESET to 33789. RESET, because this is your chance to reset for 2021, to 33789, 33789. And if you're interested in getting into Ramsey Plus, they are running a huge reset deal right now to get you ready for the year. With, of course, Financial Peace University, of course, all the other courses in there, and the premium version of EveryDollar, which connects to your bank, the world's best budgeting app, all of that. You can do a free trial at DaveRamsey.com slash reset for Ramsey Plus. Lots of free stuff today.

Check out the free trial to Ramsey Plus at DaveRamsey.com slash reset and text the word reset for free Reset live stream tomorrow night. Text RESET to 33789. This is the Dave Ramsey Show. We'll see you next time. Anthony O'Neill Ramsey Personality is my co-host today. Open phones at 888-825-5225. 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 window 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 Caleb in Iowa. He says, I'm 23, making $120,000 gross, and so far I've been able to earn my way out of the dumb financial decisions I have made without really changing my lifestyle, and I've struggled following baby step four without really ever really changing my lifestyle on more than one occasion, but always end up relapsing down to steps two and three in the next few weeks. three months emergency fund any tips on getting on board with a more responsible lifestyle at this step so i can quit this cycle 23 23 uh you are the problem um and i think the and i say that in a respectful way caleb i think you you're asking us for advice i think you need to look in the mirror and tell yourself it's time for discipline and intentionality. OK, there's no reason why you should be going back and forth. You don't have nothing major happening in your life.

It sounds like you're just making poor decisions. And I always teach this to 23 year olds, Dave, that the caliber of your future will be determined by the choice you make today. And he's not making the right choices. And that's true of a 53-year-old, too. So, Caleb, I think you're halfway there by recognizing the problem. When you don't recognize that there's a problem, then you don't have to address it. My dad used to say, knowing that there's a problem is 90% of solving it.

A lot of people are just unaware that there's even a problem. They're in the zombie apocalypse and just wandering around, right, and just in a zone. And so I think you're halfway there just by recognizing that there's an issue. And what happens is as we go through our life, we have different things that come into our life that call us to a higher level of nobility. For instance, when you get married and you have your first child, suddenly you will do anything to protect and provide for that child.

It takes someone who was self-centered, and they grow up almost instantaneously. You know, they become other-centered. That little baby, other-centered. You know, and that's one time that it happens. Other times you can just, it's a matter of like where you are, Caleb. It's just a decision. Like for sometimes I run into people your age, Caleb, that aren't married, don't have a kid, but they're looking at a different kind of a why.

You need a big why is what we're talking about. A reason to not lapse. Yeah. And that baby is an example of a reason to not lapse. But another one that I was talking to, Anthony, you and I believe we're talking to the young man. He's a strong faith. Oh, yeah. And his reason for that was he didn't want to disappoint God.

He wanted to be a faithful servant. Yes. He wanted to be trustworthy, worthy of trust. Yeah. So it was a thing between him and Jesus. It wasn't, I don't want to let Dave down or Anthony down. It wasn't, my wife's going to be mad at me. It wasn't, my kid can't to let Dave down or Anthony down. It wasn't, my wife's going to be mad at me. It wasn't, my kid can't eat because I'm misbehaving.

It was, I just don't want to let Jesus down. I want to be worthy of trust. I want to be a good steward, a good manager of God's resources. As an act of his faith, it became his why. Yes, yes. And so I don't care what your why is, but right now you just don't have one. Yeah, yeah. And, you right now you just don't have one. Yeah. Yeah.

And, you know, you need a real reason. I'll give you an example, okay? Somebody who wants to lose weight to look nicer in their clothes is not nearly as motivated as someone that the doctor says, if you don't lose 50 pounds and get your cholesterol down, you are going to die. Yep. I have a different why. Fitting in your clothes versus dying. Yes, sir.

Okay? It's a different kind of a why. Yeah. It raises you to a different level of motivation. It does. And the interesting thing is that you can just decide that item is there. Now, you don't have to decide you're going to die. I don't mean that.

But you can just go, I'm just disgusted with myself, and I'm not going to do this anymore yeah you know that's a decision and he's kind of heading towards that this verbiage is getting increasingly frustrated with the guy in his mirror you see it yes i see it i mean i and here's the thing i too i want to say caleb dave is talking about a why and one of the things i talk about on my channel is if your why doesn't make you cry then the price of commitment will make you cry you need to dig very deep into yourself and find something that just activates that emotional side of you as a young man what can make you care deeply yes yes and when you can identify that then you will never go back to what you're saying you do not want to go back to. I could never go back to sleeping in the back of my car.

I can never go back to living paycheck to paycheck. I can never do that because what I care about so deeply on the inside just gets me so emotional that it pushes me forward. Even when I feel like sometimes it's how people break major stuff like addictions yes they have to have a why yeah yeah they have to have something that's better than the drink yep they have to have something that's better than the drug they have to have something that's better than the porn or the gambling it's a it's more important to them than that item is and and you got to care deeply and so you could take those kinds of ideas, folks, and just by putting some thought to it, some prayer to it, some meditation to it,

and in a sense you are manufacturing your nobility, your why. And the beautiful thing about Caleb's situation is he's asking the question. Yes. Most people in our culture are so oblivious that they need to even ask that question and even if someone asks it of them they become offended so you know robert is with us in chicago hey robert welcome to the dave ramsey show hi dave thanks for taking my call sure what's up um i'm a pretty new listener i just got married in october so i congratulations a little bit more seriously.

Thank you. So I've been binging episodes, and I read The Complete Guide to Money, and I realized I was raised by pretty wise parents because I'm starting off in steps four through six. Yay. And I had a bunch of money in savings, so we just paid off the house this week. Wow. Oh, well, you're fine. Buy that, Robert.

Congrats, man. Yeah. That's huge. We have obviously no kids yet. And so my couple of questions are, I'm not sure how much life insurance I should take out since we have the house paid off and I don't have kids. And then also, I've been investing in retirement, but not quite to 15% because my income, I'm having to do a backdoor Roth, so I'm kind of figuring that out. But I'm not quite sure about your categories, you say, are growth, growth and income, aggressive growth, international. And at least in my brokerage, things aren't labeled like that, so I don't really know what that means and what type of labels I'm supposed to be looking for for the mutual fund.

That's good. A lot going on there. Yeah, the very first one, man, how much do you make a year? What's your household income? Household income is around $200,000. Okay, cool. So what we teach here is just 10 times that. That should be the minimum. On your life insurance.

On your life insurance. Okay. And that's term life. So that's not a whole life. That's term life. Right. And even with, because I've heard you guys talk on some of the other episodes about, you know, you're thinking about the stuff that you want to get taken care of with that money.

You could reduce it in your situation because it's really 10 times to 12 times what it's going to take her to live. Yeah. Yeah. Okay. And she probably doesn't need $200,000 to live with a paid-for house if you die tomorrow in a car wreck, right? Yeah. Yeah. Okay, and she probably doesn't need $200,000 to live with a paid-for house if you die tomorrow in a car wreck, right? Yeah. But, you know, it's at least a million on top of where you are

because we want her to be well cared for, and that would provide somewhere in the $80,000 a year income range instead of the $200,000. But I'm guessing she's a professional as well. I'm the primary. Okay. And then when you have kids, it'll change even more. But I would start with at least $1 million, and you could go up to as high as $2 million

if you want to. It's not very expensive if you're healthy. As far as your investing goes, if you want to sit down with one of our SmartVestor pros, they can walk you through the details of the types of mutual funds. The biggest thing is there's a clue in the category title. If it says growth, it's growth stocks. And it's a company that's growing. It's in there. If it's aggressive growth, this means, by definition, it's going to that's growing. It's in there. If it's aggressive growth, this means by definition, it's going to be more volatile.

If it's a foreign fund, obviously it's going to be overseas stuff. And that's what you're, you know, the title tells you what's in it. And sometimes they use different titles, but it means the same thing. Have a friend or a family member that needs a daily dose of Ramsey advice in their life?

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