The Ramsey Show - App - Lessons Can Be Learned From Hard Times (Hour 2)

Episode Date: April 7, 2020

Chris Hogan, Savings, Debt, Retirement Tools to get you started:  Debt Calculator: http://bit.ly/2QIoSPV Insurance Coverage Checkup: http://bit.ly/2BrqEuo Complete Guide to Budgeting: http://bit.ly/2QEyonc Interview Guide: http://bit.ly/2BuGnZE Check out other podcasts in the Ramsey Network: http://bit.ly/2JgzaQR 

🎵 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. I'm Dave Ramsey, your host. You jump in, we'll talk about your life and your money. It's a free call at 888-825-5225.

That's 888-825-5225. Joining me on the show today, Ramsey personality Chris Hogan, multiple number one bestselling author, the latest being the Everyday Millionaires book, where it is the summation of the largest study of millionaires ever done in North America, done by Ramsey Research, airtight research, and pretty incredible stuff. So, Chris, any time I go through crap in my life, if I'm go through that i always want to get the lesson

from it if i'm gonna go through the pain i want to get the lesson yes because in every journey through the valley of the shadow of death there is a lesson it whether it's a struggle in my marriage whether i'm ready to kill one of my kids whether it's uh physical whether it's uh emotional spiritual financial business problems whatever it is if i'm going to go through the crap i want to get i want to come out of it with something more than the pain. I want the pain to have meant something. Yes. And so that's what America is doing right now.

We're going through a thing, no doubt. And there's certainly some medical lessons, some public health lessons, things that, frankly, I don't know anything about nor am I inclined to learn a lot about. I understand they're important. It's just not why God put me on the planet. But there's some economic lessons and personal financial lessons. And when I went broke because I was stupid, there were lessons I had to learn. And I learned those lessons.

And so I've never had to go back there again. And so my goal is if I'm going to get the pain that stupid brings me i'd only want to get it once yes absolutely i want to pass the test yeah it is it's that you want the souvenir i i i tell people information without application is just information information that gets applied in your life has a chance to become wisdom. And I think, Dave, we're getting a lot of people out there, especially on this money stuff, that are starting to go, I don't like this. I don't like waiting to find out when the government's sending a check. I don't like to wait on Congress to have to vote on something to figure out what I'm going to do for myself financially. People are waking up and seeing this for what it is. Yeah.

It is a – I remember being 10 years old, pulling a nail out of a board. I was tearing down a deck with my grandpa, and I got ready to toss the nail, and he's like, oh, no, no, no, no. And he made me lay it down on the board and straighten it out and save that used nail in a coffee can because he had something I didn't have. He had an experience called the Great Depression, and it reformed or formed for him his decisions about money the rest of his life. Some of them were toxic, but most of them were good, just simple frugality.

In other words, I'm not going to spend everything I make. I'm not going to waste, waste not, want not. I'm not going to be everything I make. I'm not going to waste. Waste not, want not. I'm not going to be. He never wasted anything. I mean, he was almost a pack rat because we fixed everything in those days. Now everything you throw away. That's right. But you don't fix anything anymore.

But you used to take something apart and fix it if it was broken. And you'd go down in the basement on the workbench and do that. And so the lessons are there. And the lessons for this are you know some of you were engaged in stupid activities and you can get away with stupid when everything's going good but when stupid is stress tested it comes up lacking and and that's what's going on right now i mean you were like oh ramsey you're just a you know you're just a babe you're a boomer meme and so you're just you know yo you don't understand yolo and you're just a you know you're just a babe you're a boomer meme and so you're just you

know yo you don't understand yolo and you're just an old guy you're just an old fart saves all his money and you know no i i get having fun i'm as up for fun as anybody but uh but i've been there and a man with an experience is not at the mercy of a man with an opinion and so uh you know what warren buffett said you can tell who was skinny dipping when the tide goes out a bunch of you were skinny dipping and it's not here to i say i told you so but here's the thing debt equals risk more debt equals more risk personal debt equals personal risk and therefore volatility risk equals volatility you're more unstable and so your your mountaintops are higher and your valleys are lower when you take on more risk in your life and that's true of the economy. Part of the problem we've got is that we've got an economy based on everybody pays payments.

But when everybody doesn't have a job, they can't pay those payments. That's right. And all of a sudden, one week without pay, two weeks without pay, three weeks without pay is a freaking end of the world catastrophe for folks because that valley is going to be it's the depth of it and the speed by which you reach the bottom of the valley is faster because of the debt debt equals risk and it it it increases the the volatility of the overall economy yes the more of us that are more of you that are in debt, I'm not in debt, and it increases

your personal volatility. Well, Dave, you and I have said, I'm talking about almost 80% of people are living paycheck to paycheck, and I think people heard the stat, now they're feeling it. Ooh. See, you listen. Math becomes different when you have some experience, and some of you out there are feeling that 8 out of ten hear that don't hear just 80 think of 10 of your friends according to that's that eight of the 10

of them are living paycheck to paycheck you bring it closer to home think of 10 of your family members eight of them and so now as you look at houses on your street right now that are sitting on their front porch social distancing yeah eight of them yeah got a problem as soon as the income stops yeah there's no margin i can afford the payments in quotes means only if my job goes perfect and life goes just perfect and by the way it never does that's a stupid but statement yeah this is not i told you so this is i want to make sure that those of you that have not gotten the lesson yet that you get what's here for you in this downturn that you get what chris called the souvenir if you're going to take the trip get the. If you're going to take the trip, get the souvenir. If you're going to take the test, understand the lesson and pass the test.

Otherwise, there will be another test with the same questions. You get to take the test over if you flunk the test. So understand the answers to the questions this time. And it's not I told you so. It's not me beating you over the head i had the same crap happen to me because i was dumber than a rock and i just did everything bass-ackwards and created a mess in my life and some of y'all are sitting there right now and i feel sorry for you i love you i don't want you to be there ever again but this is your moment where

you say never again and someday 30 40 years from, you're sitting with that grandbaby on your knee and you're saying, back in old 20, your grandpa was a dadgum fool. And he ain't no more, boy. He's a millionaire now. That's right. And here's what I did. I got out of debt and I stayed out of debt. You'll be telling them grandpa stories.

It'll be better than boomer stories. Yes. All you got to do is climb, people. Start climbing. Grab the rope. If you do this one simple thing that we all do, you are literally at risk of being hacked and someone stealing what you've worked so hard for. Do you ever use public Wi-Fi?

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why blinds.com is the number one online retailer of custom window coverings. Free samples, free shipping, and new promos all the time. Use the promo code RAMSY to get the best possible deal. Chris, our question comes from Catherine in Utah. I'm on baby step five, saving for kids college, and I work for a university. My benefits include complete undergraduate tuition waivers for my spouse and dependents. I plan on working at my current job until I retire. My children are six and four. I'm wondering if you recommend that I still save up college funds for my two children despite having the tuition waiver for both. Should my children expect to go to the university I work

for or should I save up for college in case they decide to go elsewhere? Oh, that's interesting. Haven't been familiar with the state system, and they are very true to their word in that scenario when I was coaching and going to grad school. You know, as your kids are four and six years old, I love the idea and the concept that that's available, but who knows what can happen in 12 to 14 years. I like the idea of continuing to put money aside and saving up for your kid's college just in case. And, you know, I think that's the best thing to do to be able to be prepared for the unknown. Yeah.

Okay, so one of two things happens. One is you're still employed, in which case you got free school or not free school. My kid's going to the free school. You better believe it. Not really an option. So they like the campus is prettier somewhere else. Well, I'm sorry. It's a $100,000 decision there, little puppy, and you don't get to make that one.

So you'd be going to the school. Option number two is something has happened with your career track, and you're not there, which is what you brought up, Chris, in which case you would need money. And so there is no downside to having saved money. There's no like, oh, I wish I hadn't done that. Right. You don't have that moment.

And so what I would do, I probably, you know, to the extent you're sure you're going to be there, and you feel the way this is worded, it feels like you really think you're going to be there. Okay? It's all in these words, the way you use them. To the extent you think you're going to be there, I would not do a 529. I would just do an UTMA. And that's a Uniform Transfer to Minors Act, which means the money is in the kid's name. It's taxed at their rate instead of your rate,

and so it won't have any taxes until it starts to being a substantial amount of money. Now, back when my kids were little at that age, there was no 529s or ESAs, and so that's the only way I could save for my kid's college. And so the only tax break is that it's not taxed at my rate. It was taxed at their rate. But the downside is it's in their name. And so it's their money at 21. Now, what ended up happening in my case, Catherine, was by the time my kids got to college age, we had enough saved for them to go to college in their, quote, college fund, unquote, which was just a mutual fund in their name and a series of mutual funds in their name.

And then we were making enough money. We just cash flowed their college. And so they got the equivalent of a college fund as a graduation gift to start off their adult lives. And therefore, they're not in debt going not only from college but for anything else because they're set with that money. And that money was already in their name, so there's no tax implication of shifting it to their name. And so in your case, let's say you built up, I don't know, 50, 100 grand in your kid's name, and then you're still working there.

They go to school free. Your kid graduates 50 to 100 grand, gets married. That's the down payment on their first house. That's right. And they get their life started off right. You know, of course, that's assuming that they're not doing cocaine, you know, which in which case we would hide this money. But it's like it's in your name, but good luck finding it.

Yeah. And so, I mean, because we just have this weird thing. We love our children and we're not going to participate in their stupidity with financing it, that is. So anyway, it worked out for us. All of our kids turned out okay in that regard, but it set them up for their lives. And so that Rachel, Daniel, and Denise, you know, getting married or being married, coming out of school not only debt-free but with degrees, but also then they had that money. And so that's when everything turns out like super awesome.

But there's no case where you're going to go, Dadgum, except if they were drug addicts. I mean, but other than that, there's no case you're going, I just wish I hadn't saved that money. Yeah. No, I'm with you. So I would save some because it gives you options. A pile of money just really about all it's good for is it gives you options. Yeah. No, it does. And options, Dave, are'm with you. So I would save some, because it gives you options. A pile of money, just really about all it's good for is it gives you options.

Yeah. No, it does. And options, Dave, are a good thing. You don't want to feel trapped. Amen. Daniel's in Tennessee. Daniel, welcome to the Dave Ramsey Show. Hey, Dave.

Hey, Chris. Thanks for taking my call. Sure. What's up? So me and my wife got done with Financial Peace University about six months ago. We're on baby step two. We've knocked out a little over $9,000 in debt so far. So, we have three small credit card debts.

It's about $6,000 between the three. And the next thing in line is my wife's car. We had to cancel our, we had saved up some money for our anniversary trip, which we're canceling because of what's going on right now. And we're thinking with that money and with the stimulus money from the government, we're considering just getting out from underneath my wife's car rather than paying off the smaller credit card debts. Okay. How much do you owe on the car, Daniel? It's $13,600 and something. What's your household income? About $80,000. How much have you paid off in debt so far?

In the six months, we've paid off about $9,000. Okay. So you're not really making good progress? I feel like we're doing pretty good. We've made a cut back on our budget. It definitely feels like we've paid off uh seven or eight different debts at this point that's good that's good okay um well i i would do what i taught you to do which is work your debt snowball smallest to largest um yeah how much is in the anniversary account uh it's just about $700.

Okay, so it's not a very big thing. Okay, so you got $2,400 and $3,000 is what you got to throw at the thing anyway. Would you say you owe it on the car? We owe about $13,000. It's worth about $9,000. So how's the stimulus knocking out that? Because we have two kids also. That's another thousand

so you got 3,400 plus 700 is not 13,000 well no we're we the car is our loan is 13,000 and the car is worth about 9,000 you want to sell the car yeah yeah we're thinking about picking oh okay i missed that i thought you were paying off the car yeah out of order on the baby steps but no if you're using this to sell the car and clear a debt yeah i'm back with you then i would do that okay because uh the three other debts we have are only about 70 bucks a month if we do get rid of the car we're freeing up 600 a month for our budget yeah that car is a nightmare i can tell everything about the numbers on it sucks so um yeah i i think the uh uh yeah what we we would we always tell people to do

out of order because it's not a thirteen thousand dollar debt that you're taking on it's a three thousand dollar debt the amount that you're upside down is all that you're dealing with and you've got this cash yeah if you can do that i in this case i would yeah i definitely would do that so he didn't tell us about selling the car okay he said he said take out the car right but we thought he meant the debt yeah so that that's the difference and so yeah i mean yes that makes sense and um and that a big sacrifice, and there you go. And here's the good news. You're going to go on a better anniversary trip because of this than the one you had planned. I don't know what anniversary this is, but Sharon and I have been on some anniversary trips since we weren't broke anymore,

and they are nice when you ain't broke no more. Just a little bit nicer? A little bit nicer. Just a little bit nicer. A little bit nicer. You live like bit nicer. A little bit nicer. You live like no one else later, you can live and give like no one else. And that's what you're doing right now, man. You're paying a price to win.

Proud of you. Thanks for calling in. I'm glad we could help. Chris Hogan and Dave Ramsey here on The Dave Ramsey Show. Business Leader Radio. Business leaders hiring right now may be the furthest thing from your mind, but the fact of the matter is we will recover. One of the smartest things you can do for your business is to be prepared. I want you to know my friends at LinkedIn are ready to help you find the right people for your business when you're ready to hire them. LinkedIn Jobs matches your role with

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jesus is with us. And Megan, if I picked up the right line anyway, I would have been. And they're ready to do their debt-free scream from Wyoming. Hey, guys, how are you? We're doing well, Dave. How are you? Awesomeness. So how much have you paid off, guys?

We paid off $81,000 in 20 months. Good for you. And your range of income during that time? Our range of income was $60,000 to $90,000 in 20 months. Good for you. And your range of income during that time? Range of income was $60,000 to $90,000. Cool. What do you guys do for a living? I stay home with the kiddos and I also clean a few houses while our youngest is at preschool a few mornings a week. And I'm a high school math teacher. I'm also a worship leader at our local church here. I paint over the summer. I do summer school and I'm a soccer coach math teacher. I'm also a worship leader at our local church here. I paint over the summer. I do summer school, and I'm a soccer coach as well. Man, you're just busy all the time. Yeah. So what'd you do to kick the income 30 grand, just all those extra jobs and stuff?

Yeah, you know, it was just one of those things that, you know, we really wanted to accomplish this goal, and we just got crazy with work work and we found every opportunity that we could to bring our income up and uh so that's how we were able to get that 30 000 increase yeah very cool what kind of debt was the 81 um it was his truck and our house whoa you paid off your house we did so where in in Wyoming are you? The town is called Worland, Wyoming. Mm-hmm. And north central. Okay, so what is this house worth that you paid off?

So the house is worth anywhere between $140,000 and $150,000. And it looks like a nice place. We're seeing the pictures on YouTube. What's the square footage on that, a couple thousand? Yeah, I would say so. Okay. And so 140,000 in that area buys a lot of house. Yeah.

Yeah. Very cool. Yeah, you got a great place there for that kind of money. And you're debt-free, making 90 grand a year. Absolutely. Hey, Suze, how much did you owe on this truck? $10,000. Okay. $10,000 on the truck.

That's not as bad as I thought it was going to be. So what caused you all to say, enough's enough? We're getting this debt out of our lives. Yeah. Well, you know, when I was growing up, my parents were always pretty conservative. You know, it's not that they didn't have debt, but they were always pretty conservative. And I started listening to Dave sometime when Haseys was in college. I don't remember exactly when, but it just made a lot of sense to me,

and I knew I wanted to live that way. And it took a little bit longer to get Haseys on board. It took a few years there. See, for me, it just felt like it had to be my idea for me to fully engage in the program And what was funny about it was that you know? About three years back our high school needed another math teacher to teach foundations in personal finance So I just jumped at the opportunity and I was like my wife has been talking to me about all of this I need to really figure out what?

what this is all about and You know just we you know, after that, she didn't give me the opportunity to opt out. She's like, you know the program now. You know what you're doing. Now let's just get it done. It just took her a while for it to be your, she's a brilliant wife. It took her a while to make it your idea. That's right.

Jesus, you got voluntold that you were going to get this done, you know? Yeah, you know, I came home and I told her about, like, honey, they're looking for somebody to teach foundations and personal finance, and she just basically told me, you better do it. You better fight for that class. You better make sure that they give it to you. Thank you. Thanks for teaching it. And it's rewarding to watch those teenagers learn this stuff, isn't it? Yes, definitely, 100%.

And they're actually listening to me right now, my six-period class. And I just am very happy that I get to share just our journey with them and that they actually can see at a very young age that, you know, it's possible. It's possible to live a debt-free life and that you can still accomplish a lot of things without borrowing money. You sure can, buddy. Listen, I've got goosebumps sitting here thinking that your kids are listening to you two. You all are getting ready to become real heroes to them because you didn't just teach them.

You did it, you all. You did it. And you're about to give them an imprint in their brain that they're never going to forget. Great job. I'm proud of you guys. My old high school math teacher did his debt-free scream on the Dave Ramsey Show, and I was listening in. And now I'm 30, and now I'm 30, and I'm almost a millionaire. That's one of those kids listening right now.

That's exactly right. That's amazing. Yeah. That's pretty cool, guys. I'm so proud of y'all. You're heroes, not only in your personal lives, but what you're doing there in the high school. kids listening right now that's exactly right that's amazing yeah that's pretty cool guys i'm so proud of y'all you're heroes not only in your personal lives but what you're doing there in the high school thank you for all of that absolutely incredible okay so now megan now that you move from um a conservative financial family to actually having techniques to apply and steps to apply,

what do you tell people the key to getting out of debt is? You have a very impressive story here. Yeah, well, definitely the budget is huge, and I really love, we were kind of talking about this, I think a lot of people try to copy and paste month to month, and, oh, man, it just doesn't work, you know. And so it's really key for us to sit down together. This month is different than last month and some things stay the same, but we need to tweak some things and move some money around. And

so that's really been huge for us. The budget is huge. And I think I would add to that, Dave and Chris, that, you know, dreaming together and sharing a vision is very important. So that having the why before the what is crucial into what you're doing. And to add with what Megan said, it's just working together towards a common goal, you know. I'm truly blessed to have Megan as my wife. You know, I just couldn't imagine us getting this done if we were pulling in both, you know, opposite directions. So, you know, even though for a good portion of time she wasn't bringing home an income, you know, she was cutting out coupons, you know, for eating out and buying groceries only when they were on sale. And, in fact, you know, even when Megan would come home and I would tell her, you know,

hey, make sure you bring me my favorite chips from the store. You know, my kids were always really quick to say when they didn't bring them, sorry, Dad, they weren't on sale that day. So even our kids are trained with that. So I'm very blessed to have her by my side, and I really have a great teammate. Yeah, it makes all the difference in the world. And that's what people don't understand. They think personal finance is a math problem.

It's a relationship problem. Relationship with each other, relationship with the person in your mirror. And when you get all that stuff lined up, the math suddenly starts to work. It's pretty amazing. And it won't work until you do. So you guys are really on to something there. Well, congratulations, you guys. We are very proud of you.

We've got a copy of Chris's book, number one bestseller, Everyday Millionaires. You're definitely on your way to doing that, and I love that you got the six period on their way to being everyday millionaires. Go six period. We're cheering for you. Yes. I love it. Very, very cool. All right.

It's Jesus and Megan. $81,000 paid off in 20 months, making $60,000 to $90,000. House and everything. These people are officially weird. Count it down. Let's hear a debt-free scream. Three, two, one. We're debt-free!

That is how it's done. Life is good. Wow wow pretty stinking amazing all right let's go to melanie in new jersey dad blame it i cannot hit the right button there we go melanie's in new jersey hey melanie how are you hi dave i love your show thanks so much for taking my call. Thank you. How can I help? So unfortunately, my mom passed away in January, and she had several credit cards with debts on them. But one of the credit card companies told us that the balance was around $1,500, and they said that they would discharge it and that we wouldn't have to pay it back. But we did receive a claim against the estate from a debt collection agency,

so I wasn't sure if we need to pay that or not. Okay, we don't have to pay it, but the estate does. Okay, regardless, even if the credit card company told us they discharged well do you have it in writing no just over the phone yeah it didn't happen then they lied oh okay yeah if you don't have it in writing it didn't happen because the credit card credit card collectors you can tell they're lying if their mouth moves so the estate has assets to pay its debts uh just enough oh so it's just kind of cleaning up a mess then exactly yeah that's a pain i'm sorry but yeah the what you when you pass away what you don't owe the money but what she owned versus what she owes has to be paid uh Assets minus liabilities is net worth, and that's

what the estate looks at. So yeah, they're going to get paid. Now you can try to negotiate with them and get them to settle. Folks, I love telling you about well-made, well-thought-out products. Today, I'm talking about Grip6 belts. I don't know about you, but I'm not a fan of traditional belts. They never fit right, and they're uncomfortable. Grip6 belts are unique. Owner BJ designed a truly modern, minimalist belt made of high-quality materials with no holes, no flap, and no bulk. And the buckles come in really cool designs and are interchangeable. I personally own these belts in different styles and talk about affordability,

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the Ken Coleman Show and all the various podcasts and the Dave Ramsey Show and including the Chris Hogan Show and all that. But we pivoted, and the first thing we did was we sat down on that Monday morning when basically the nation shut down on that week or the week before or the week after, right in there. And a lot of people quarantined. A lot of people just stay at home orders, those kinds of things. And so a lot of folks are home. That's simple.

And we said, okay, how can we do during these unprecedented high stress times where we've got tens of millions of americans by the time we're through will have lost their jobs we're at about 10 million right now um jobs report comes out again you know it's going to be bad again and so i mean when you got companies like macy's laying off a hundred thousand000 and all the major rental car companies have laid off about 80%, and basically Marriott and, you know, their various properties, like the Gaylord properties and the Ritz properties, all shut down, and all those people are on the street. And so you've got unemployment going rampant.

So how can we help? And we said, well, Financial Peace University has helped more people than anybody else, than any other class in recent history, in the history of the last 100 years or so, on personal finance. It's the gold standard of personal finance classes to learn how to handle money, get on a budget, get out of debt, build wealth, be incredibly generous. And there's nine lessons typically taught over nine weeks, but you can take them at any time. The whole class is online. And so we said what we're going to do is, and we started this, it'll be 14 days ago tomorrow. And so when we're continuing

it right now, I don't know how long we'll continue it but for now it's continued including today at this moment and financial peace university now is a 14-day free trial which uh pro tip allows you to binge watch that instead of tiger king okay and so and the legacy journeys in there and smart money smart kids there's a lot of stuff in there that beats narcos okay and so i mean you're just binge or ozarks or whatever it is you're binge watching i'm bringing up all the netflix shows that i keep hearing people watching but um it's just you know it's it's uh guilty pleasures i guess but this is not. This is brain candy, brain food, and it gives you the information to come out of this time with the information to never be vulnerable to this type of thing financially again.

And it's a 14-day free trial. Go to DaveRamsey.com slash hope. And, Chris, we've got a lot of other stuff as well on that website that we threw up there that's free or almost free. Oh, yeah, absolutely, Dave. For example, you can get the book, the audio of the Total Money Makeover, Dave's number one national bestselling book. It was the book that changed the game for me. You can get that audio for $1.99, people, the audio book. You also have access to Ken Coleman's book, The Proximity Principle, for $1.99, people, the audio book. You also have access to Ken Coleman's book,

The Proximity Principle, for $1.99. Which is important if you're looking for jobs. Absolutely, or you know someone that's looking for a job. And so there's a lot. A free 15-minute call with one of our coaches. Which, again, hear this. Hold on. You can get a free 15-minute call with a financial coach.

Okay, hear this. And so you've got an opportunity to begin to change the game. And I know a lot of people out there are feeling the pain and feeling the stress and the crunch, but I'm going to tell you something. It's time to equip yourself. It's time to get ready for that never-again moment where you never again feel vulnerable. You never again feel like you're ill-prepared. You've got an opportunity to take

some, take a stance for yourself and your future. And we've got nothing but time on our hands. So don't tell me you're too busy or you can't afford to listen to me. You can't afford not to do this nine lessons, nine weeks. You can get in there and watch it, get it and start to equip yourself. It's, it's a fantastic opportunity. Yeah. yeah 14 days we've never done this in 30 years and uh so it's just for you guys right now and it's a way for you to get the information and the inspiration and it's a full premium product we didn't dumb it down it's the whole thing completely free for 14 day free trial DaveRamsey.com slash hope to get that and all the other stuff that's there there's's a whole list of things there.

We keep adding stuff to it every day, so if you haven't gone back and checked in a little while, the list is getting rather long, and I'm going to go through all of them. George is in North Carolina. Hey, George, welcome to the Dave Ramsey Show. Thank you so much, guys. Great work by both of you. My wife and I are, and my two kids for that matter, we're very comfortable all the time like this from following the principles.

So thank you so much. Thank you. My question is about investments. I have two different accounts. I'm assuming I need to somehow get these to a Roth IRA. I have a 401k through my employer. It was a Roth 401k, but they stopped matching when open enrollment was

in the fall. So I stopped, uh, enrolling in that plan, I suppose. Um, but I can't do anything with that one until I, until I stopped working for them for three years or some sort of stipulation. But the other one is a SIP IRA that, uh, I converted to a traditional IRA some years back. And now I want to convert that to a Roth. Right. It's got a good bid in there. How much? I just don't know.

I believe it's like $32,000 or something like that. Okay. Somewhere around there. It'll cost you $7,000 or $8,000 in taxes, depending on what your tax rate is when you do that. And I don't want you to have that bill until you've gotten everything else paid off. Are you out of debt? Everything but the house.

We're chipping away at the house, like, $8,000 to $10,000 a month extra on principle. So we're doing good with that. Well, you would delay paying off your house by one month, roughly, if you convert this to a Roth and and create a eight thousand dollar tax bill but do that now while the market's low or wait doesn't matter doesn't matter yeah i probably would probably would because it does matter because you're right because the those shares then are going to grow from this point. The next rebound, which may be rather sharp, would be tax-free growth. Otherwise, if you wait, all of that's taxable, and we're going to increase the tax created when you do the conversion.

So, yeah, I think it's a great time to convert to a Roth. I hadn't even thought about that, but that's exactly right. Yeah, that's why I wanted to call and ask you, because I was waiting because of the taxes i didn't i you know if i did it a year ago i wasn't in the position to pay those taxes right george george what's your household income uh just under 200 okay thousands okay combined okay yeah i agree with dave i think you could definitely go ahead and move on this uh put yourself in position but again then you want to turn your attention to attacking the house

yeah i think you're already you're already putting eight thousand a month you said right on the house yeah a hundred percent yeah we got this thing you're kicking butt man you're killing us a hundred thousand bucks a year on that puppy you're're going to be done in no time. Oh, yeah. That thing's out. His head's out. Yeah. So delaying that by one month to take advantage of the dipped market and lowering the amount

of the taxes and then the tax-free growth, or the growth will be tax-free growth from this point forward, is an excellent time to convert to a Roth. I would not do it, guys. The rest of you listening out there, if you're in baby step two, you're trying to pay off credit cards or something, no. Just leave your traditional traditional. You can come back and address it later. But he's in a unique situation where he's at, you know, the tail end of Baby Steps 4, 5, 6.

He's at the tail end of that. And so we're just kind of taking a little bit of a detour right there and knocking that out because of the math. That's right. Now, listen to me. If you're out there and you're walking through the baby steps, do me a favor. Follow the recipe. Okay? I've had a few callers call into the Chris Hogan show, and they're like, well, hold on.

I want to do this. No. Okay? The recipe is not broke. Follow it. Right? If you want the end result of what the recipe brings, which is what? Living like no one else so later you can live and give.

Follow the recipe. And that's so true. I mean, even right now, don't try to recreate. Don't think too much. Follow the recipe. It works. Yeah, the Ramsey-ish everybody talks about doing. And Chris always says, ish is a wish.

Yeah, it's frustrating. Don't do that. Well, I mean, all of us at some point have to realize, I've got to have help. And if I've got to have help, I've got to take the advice. Yes. And that's submitting yourself. And for me, that's hard because I'm always right about everything, even if I don't know what I'm talking about. And some of y'all are that way, too.

Chris Hogan with me this hour. And next, this is The Dave Ramsey Show. In the middle of these uncertain times, Ramsey Solutions wants to give you some hope. For the very first time ever, We're giving you Financial Peace University free for 14 days. Go to DaveRamsey.com slash hope so you can watch from home.