The Ramsey Show - App - Make a Plan, Be Consistent, and Become DEBT-FREE! (Hour 2)

Episode Date: February 18, 2019

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Music Live from the headquarters of Ramsey Solutions Broadcasting from the Dollar Car Rental Studio, 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. Thank you for joining us, America. Open phones at 888-825-5225. That's 888-825-5225. Well, when I get off the air here in about an hour and some change, a couple hours,

I will be heading to the airport to go to Grand Rapids, Michigan, because tomorrow we will be doing a live, in-person, Entree Leadership One Day event. Christy Wright, Ken Coleman, and I will be leading our business leadership event. Entree Leadership is our playbook, how we've grown and run this business. It's where we break down our playbook and we show you how to run the plays. And if you want to come to that and you're in the Grand Rapids area, there are some tickets available. If you are in business and you would like to have that streamed for you on Tuesday,

you can do that. There's a live stream available to you. Also, on Wednesday night then, after we do that all day on Tuesday, we'll stick around, and on Wednesday evening, Anthony O'Neill and I will be doing the Smart Money event there Wednesday night in Grand Rapids. There is about 90 tickets left, so we will be declaring that a sellout very quickly. It's not quite sold, but just about. Most promoters call that type of thing a sellout, but we actually want every seat filled with someone to get their lives changed.

So there's still 90 tickets left, and you can still get in. The Grand Rapids Smart Money event. Oh, and by the way, Anthony is a blast to listen to. We're going to walk through the baby steps and show you exactly what to do, why to do it, when to do it. It's like a pep rally for a football game. It's like a pep rally before the concert. And so come out, hang out with us, and you will leave not only informed but motivated, laughing, crying, learning how to handle money.

And we'd love to have you come out in Grand Rapids. Again, there's about 90 tickets left. If it sells out before you get your ticket or if you're not in Grand Rapids and you don't want to come to Grand Rapids for the event, well, you should. But if you don't, then you can still watch that. It's going to be streamed on Wednesday night. And so you can purchase the stream at DaveRamsey.com as well. Thursday morning, we will fly home, and Anthony and Rachel will fly to Cincinnati

and be speaking in Cincinnati doing a smart money event on this Thursday night. And there are still tickets available for that, the February 21st Cincinnati event. And so if you'd like to come to that, that is this coming Thursday evening. So lots of options this week. Apparently the Ramsey team, Ramsey personalities are all going to be in action and flying around all over the place. So we'd love to have you just check out Dave Ramsey dot are all going to be in action and flying around all over the place.

So we'd love to have you. Just check out DaveRamsey.com for tickets. We're called 888-22-PIECE, 888-227-3223. Minneapolis starts this hour off. Kyle is with us. Kyle, welcome to the Dave Ramsey Show. Hey, Dave. Thanks for taking my call. How are you?

Better than I deserve. What's up in your world? Awesome. Well, taking my call. How are you? Better than I deserve. What's up in your world? Awesome. Well, quick question here. So my wife and I, we've decided to do your financial piece. We are on Lesson 5 of the 9 lessons. We just started here just after the first year. Anyways, so we have Step 1 done.

We are on Step 2. We've got $1,000 in student loans and $1,000 in student loans and one, no credit. Kyle, your phone's breaking up. I didn't hear your debt amounts. Say them again, please. We are at $65,000 in debt. Okay, and how much of that's student loans? So $35,000 is student loans and $30,000 is one car.

Okay. And what's your household income? $110,000. Very good. Okay. And your question is what? So my question is, my wife and I are planning to sell our house in three years. Should we sell the house now to pull out the $60,000 in equity and pay off our student loans and all of our debt.

Why are you selling your home in three years? So the house that we have right now, it doesn't meet our needs. We got the two kids, so we have too much house, essentially, with too much property. Why would you wait three years? Why would you wait three years? So three years, we did just file bankruptcy, so we have to wait the three years before we'd be qualified for another mortgage. Gotcha.

Okay. All right. So my question would be. No, I would not sell the house and rent for three years in order to get out of debt. I would sell my car. Okay. The car is a bigger problem than the house. I mean, half your debt is one car.

Yes. It's a lot easier to sell a car than it is a house. Emotionally, physically, you don't have to hire a mover to sell a car. Okay. And you don't have to rent to sell a car. And if you're going to sell anything, I'd do that. If not, if you want to keep the car what's your other car worth um so we actually don't have another vehicle but we will buy

like a 5 000 dave ramsey vehicle okay all right and so if you had 35 000 worth of cars that's not the end of the world if you make 110 as long as you can be out of debt in two years. Can you see yourself paying off $55,000 in two years making $110,000? I can. Okay. I can. So, no, I mean, if you want to keep the car, do you love the car? Well, right now it's our only car, and yes, we do.

I know, but you can get another car. Do you love the car? We do. Okay. Then if you want to fight to pay it off, I would just stay there and work your debt snowball, I know, but you can get another car. Do you love the car? We do. Okay. Then if you want to fight to pay it off, I would just stay there and work your debt snowball. And at the end of three years, you will have been debt-free for a year, car and everything. Because you should be debt-free in less than two years.

You're going to stay there three years. Just plow your way through this and keep the car. If you want to short-circuit it, though, we don't sell the house to short-circuit it. We short-circuit it by selling the car. If you want to speed it it though we don't sell the house to short circuit it we short circuit it by selling the car if you want to speed it up that's the thing and that's what i mean by short circuit if you want to kick it into overdraft microwave this a little bit then you would do that but um no i wouldn't sell my house uh i'd sit there for the three years let the thing go up in value and uh you know minneapolis is a great market you should be able to make some money on it during that time. Jacob is with us. I'm sorry.

Zoya is with us in San Jose. Is it Zoya? Is that correct? Yes, that's correct. Hi. Hi. How can I help? Hi.

Thank you so much for taking my call. Sure. I am 15 years old. I'm a sophomore in high school, and I just have a question about college. I want to be a vet, which requires both a bachelor and a master's. I have about $40,000 in my 529, and I was wondering if I should let it build up and use it for my master's later, or if I should use it for my bachelor's. Well, you're going to have to use it, period, because you've got a lot of money you've

got to spend. You're going to spend a lot more than $40,000. How are you going to cover the rest of it? Working, I do have a job currently, so doing some working. And then I do have a pretty good GPA from freshman and sophomore, so probably some scholarships as well. Great. Well, you're thinking the right way. In the veterinarian world, there's a lot of money spent on pets these days. And so there's a lot of possible scholarships in that world, from the drug companies that serve the animals to the suppliers of all kinds of different things that serve veterinarians and really work the scholarship angle on the veterinarian side of the equation, and certainly for your undergrad, too. You're 15 and you're already thinking about this?

You are what's known as a rock star. Go do this, but do it debt-free, kiddo. Choose your college carefully. Choose one you can afford to pay cash for. Work your tail off and get scholarships. You can do this. Why in the world would you trust some random guy in a cube when getting your mortgage? Do you really think he cares about your long-term money goals? Well, he doesn't.

Those companies care about getting you into whatever home loan program they're pushing that week. When it comes to ordering a cheeseburger, the meal deal works fine. But let's get real, people. We're talking about the largest investment you'll probably ever make. So don't be naive and trust an order taker who pressures you into a prepackaged loan. My friends at Churchill Mortgage have been helping my listeners for over 25 years. Call Churchill Mortgage and get custom solutions from an expert within 10 minutes. It's simple. They'll shoot straight with you and quickly show you the real way to save money.

Call 888-LOAN-200. That's 888-LOAN-200. Or visit ChurchillMortgage.com. This is a paid advertisement and MLS ID 1591 and MLS consumeraccess.org. Equal housing lender 761 Old Hickory Boulevard, Redwood, Tennessee 37027. Thank you for joining us. Suzanne is with us in New Orleans. Hi, Suzanne. Welcome to the Dave Ramsey Show.

Hey, Dave. Thank you so much for taking my call. I appreciate it. Certainly. What's up? Sure. So my husband and I are on a variable income. He is an internet sales manager for a Honda dealership. And we are currently

getting our Baby Step 1 done, but we'll be able to be in Baby Step 2 by next month, and we'll probably be able to pay off one or two debts. Great. Then we have $30,000 approximately in debt right now. His annual income last year was $70,000 gross. So approximately $55,000 came in. The issue is most of that was the first part of the year. From August to December, I just did the math, we only got about $11,000 into the home, which actually made us go back into debt a little bit further.

So my concern is we're going to be able to get out of debt fast but i don't know if it's going to be fast enough to be able to build up a significant emergency fund um for the end of the year how long have you been living on how long have you been living on a written budget okay so we've been on a written budget now for since january and i've made drastic cuts through a whole bunch of stuff okay and you're making and you're making drastic progress okay good so you have had the sense that by being intentional with money on paper on purpose and being in agreement with your husband on every dollar where it's going using the every dollar app or something like that paper what a paper and pencil whatever it is you've had the sense you got a raise you had that feeling right um yes yeah i'm just anxious because i'm

also i got that part but the the the sense that you're in control and you're telling money what to do instead of telling you what to do so here's what we're going to do, okay? One of two things will happen by the time we get to August, okay? One is you will have lived on your budget long enough to realize that you can make it bare bones if you have the exact same fall you had last year. Now, that's one possibility. See, the reason it didn't happen last year is you had no plan you were just wandering around and you woke up in debt you know but if you're actually got it all dialed in you might make it i don't know i haven't i

don't know your numbers you'll know them by then in detail okay but let's say that june comes along and you really know your numbers by june because six months of doing this stuff, you've got it dialed in. You know how much you got to dial in in just 45 days, right? I mean, so you think about adding several months of expertise to your experience. You're going to be you, if he has the same income fall from August to December that he had last year, then you have to stop your debt snowball. And you have to backfill some cash to get ready for winter. Because winter is coming and the squirrel has to put nuts into the nest to get ready for winter. And so you get ready. winter. Right, okay.

And so you get ready. That's what my instant told me, but I wasn't sure. But what I want you to do is I want you to give it a run down to June, because I think in June and July you can pile up enough, because you're not going to have to subsidize much if you have to subsidize at all. Okay. Because you're going to get better at this. You've already slashed spending. And by then you will have paid off some debts and so you'll have less monthly payments so what is the

bare minimum to survive per month now that you really got it dialed in and is he gonna will eleven thousand dollars in that period of time cover it this year if it'll cover it i think it might given given that 70 is your total income i think it might they're talking about four months and uh we're talking about 23 2500 a month okay and so you might make it swing under that but if you don't you'll know your numbers stop everything pile up a couple grand to where you got four or five hundred dollars a month to backfill to subsidize yourself out through christmas the next year then in january game on again here we go uh and so that that you can work it either way but make sure you're using your every dollar app make sure he's on board with you listen a salesman in his situation i understand he's on doing internet sales but he's still a salesman.

When you have set goals and you've got, you're seeing every dollar that you earn take you closer to your goals, it's highly motivating. I meet no good salesman whose income don't go up while they're getting out of debt because they have traction. They have this sense of destiny.

There's a goal in front of them, a carrot in front of them. Jacob is with us in Oklahoma City. Hey, Jacob, how are you? I'm good. How are you doing? Better than I deserve. What's up? I've got a question.

My father passed away this month, and he did not have a will, and the only asset he had was his condo that he lived in he'd only been in the condo about a year and a half and it was because he needed something rent controlled something small and manageable rent controlled did he own it or was he renting it he owned it but you know rent goes up every year the condo went up about owning, rent goes up every year. The condo went up about a quarter of what rent goes up. Yeah, rent control doesn't affect ownership. Yes, but we needed something where he could live on his fixed income. Okay, so you wanted to lock in the monthly amount.

I got you. Yes. And so did he owe more on the condo than it was worth? He owes exactly what it's worth. Okay. Then there's no benefit for you spending thousands of dollars to take this through probate in order to sell it, right? Exactly. If we went through probate with it, we would take it on as a rental property.

No, I wouldn't. It's 100% financed. Yes. Who wants that rental property? That's no fun. You're going to lose money on it every month. And that's my question. I would toss him the keys.

Did anybody else sign on the note other than him? Nope. I'd toss him the keys. Okay. You have no moral or legal obligation for someone who passed away's debt, even if it's your dad. And this is his only asset. You guys aren't taking something that is of value off to the side and not mentioning that.

No, he didn't own anything but this, and he has a vehicle that is going back to the bank as well. Okay. Yeah, I would do the same thing with a break-even condo. I'm sorry you lost your dad, Jacob. How old was he? He's 62. Whoa, he was young. Yeah, he'd been sick for 12 years. Oh, I'm sorry you lost your dad, Jacob. How old was he? He's 62. Whoa, he was young. Yeah, he'd been sick for 12 years. Oh, I'm sorry.

Oh, thank you. It's a hard thing to go through. It was easier because of you guys, though. I mean, we were fully funded emergency fund and everything else. One was hit. So you could take our final expenses and everything then? Yes, and it was much easier not having to worry about finances with all of this going on as well. Yeah, yeah.

So he had a car that was upside down and a condo that almost was. We toss him the keys on both, and you don't have to probate anything. All right. Thank you. Thank you, man. Appreciate the call. Sorry you're facing that. Open phones at 888-825-5225.

So if you are 26 and you're listening to me right now and you just heard that call, you should be feeling these emotions. Number one, sad. Sad that the man lived to 62 years old and had nothing financially. That's sad. I feel sad for him, and certainly his son was not devastated by it. It didn't hurt them or anything like that. It wasn't a bad thing financially for the children. It's just sad.

Because of all that potential. So if you're 26 years old, you should be sad for that family and sad for that man. It's a sad story. The second emotion you should feel is a shock to your system. It says, I'm going to take the steps so that I'm not that guy. I'm going to take the steps so that I'm not that guy.

And that's not to shame or condemn that guy, but you don't want that to be you. It's sad. This is the Dave Ramsey Show. Do you know who is a prime target for identity theft? Your children. Kids have no debts or credit history. Their personal information is just as easy to get, but the theft could go completely undetected for years. Every day all over the country, young adults are starting down their own path in life by opening a bank account or renting their first apartment,

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Zander.com or 800-356-4282. In the lobby of Ramsey Solutions, Skyla is with us. Hi, Skyla. How are you? I'm doing wonderful. How about yourself? Better than I deserve. Welcome. And where do you live? I live in Tilo, Texas. Oh, cool. Well, welcome. Good to have you.

All the way to Nashville to do a debt-free scream. Yes, sir. And how much have you paid off? $95,000 in eight and a half years. Good for you. Very good. And your range of income during that eight and a half years? Full-time, made $31,000 when I started, picked up bookkeeping jobs and roommates. So any given year, made an additional about $3,000 to $7,000. And then ending when I paid off my student loans was $42,000 when I paid off my house. Oh, you paid off your house and everything?

Yes, sir. Student loans and house. It was $35,000 on my student loans and $60,000 on my house. So I'm fully debt free. I called in when I paid off my student loans and I wanted to come in person now that I paid off my house. Man, that feels great. It does. How old are you? I am 35.

And you have a paid for house? I do. In Tyler, Texas. What's it worth? It's worth about $120,000. Wow. Very cool. And you don't have a house payment.

I do. I'm Very cool. And you don't have a house payment. I do. I'm done. Look at you. And man, not even 40 years old. That's absolutely impressive. Very, very well done. It was a long journey. So you worked the debt snowball first.

Yes, sir. And got out of debt. How long ago was that? Just at the end of September. That was my birthday present to myself as I paid off my house, made my last payment. Okay. But before the house, you paid off the student loan. Yes, sir. And how long did that take? I first found you in spring of 2010. One of my coworkers listened to you on

the radio and he'd always come in ranting, whatever was going on on the radio that day. And at that time I had just graduated college. And so my student loans were coming due and I had this massive debt of $35,000 and another payment of about $300 to figure out how to pay and not really having much of a budget. And on top of that, still having my house. And so life was very much overwhelming at 26 years old. And so you had a conference in March in Dallas. And so went to that and actually bought my kit, Financial Peace University on a credit card. So that's where I started.

Definitely had a lot to learn and so thankful for the principles that you taught there at Total Money Makeover and then through the FVU that I took the class twice and now have actually been teaching it and co-teaching it, coordinating it at my church. So this January class is actually my 19th class teaching FVU. Wow. Thank you. Yes, sir. Thank you. It's a privilege to be able to share my journeyth class teaching FVU. Wow. Thank you. Yes, sir. Thank you.

It's a privilege to be able to share my journey with other people. Very cool. So how long did it take from the time you started at 26 to pay off your student loan? It took me two and a half years. Okay. And then you had six years to pay off your house. Yes, sir. Okay.

Wow. Well, you're way ahead of schedule then. Yes, sir. So you paid off student loan in about a normal amount of time, but you paid off the house super fast. Yes, sir. Wow. I just continued that dead snowball into my house. I wanted it gone.

I wanted that freedom and that being a single person, not having anybody to support me financially, that I wanted that security of being able to fully use my finances for whatever God wants me to do with them. And so I wanted that burden gone, that I wanted to be fully debt-free and that life now moves at the speed of cash, that there's nothing I want bad enough to go back into that overwhelmed desperation feeling that I remember what it felt like to have $95,000 in debt.

And there is nothing in this world that I want even a fraction to go back to that. Yeah, wow. So what big thing are you going to do to celebrate? This is one of it. Trip to Nashville. Trip to Nashville. Went on a road trip.

I love a good road trip. And so nine hours in the car. Love it. What else are you going to do? I don't know. Spend time with family. It was nice to just on a whim buy a plane ticket to go visit my grandpa for Father's Day. He was coming up in a few months.

So exciting just to be, hey, let's go. I'll go. That's fun. And where does he live? I'm from Minnesota. Oh, okay. So my grandpa's 93, and I'm blessed to be able to go visit him. And my grandma actually is taking an FPU right now up in Minnesota.

So it's exciting to walk that journey with her. Very cool. So you've taught the class 19 times. Yes, sir. Oh, my gosh. You're like a super coordinator. I drink the class 19 times. Yes, sir. Oh, my gosh. You're like a super coordinator. I drink the Kool-Aid, yes, very much so. It's a blessing just to be able to share my story with others and to give people hope to say, I've been there.

I did stupid. I kind of love the home lesson because I go, I did everything wrong. Don't do what I did. So it's great just to be able to share my story and to give the people that come to our class at Green Acres Baptist Church the hope that you can do it. I get where you're at. This first couple of budgets, it isn't going to go right, but you'll gain traction and you'll be able to make progress. And this is what I did, and you can do it too. And, you know, $31,000 to $42,000 a year range of income.

And so what do you tell people the top three things they need to do if they're going to get out of debt? It's consistency over time, that you need to have a plan and that you need to backtrack that plan to what you need to do. That, okay, I wanted to get out of debt and what did I need to do in my tangible monthly, weekly budget? What do I need to do today to get here tomorrow and keep making that plan? And so life happened along the way.

Eight and a half years, my cars have been totaled. Life's happened along the way. Certainly it wasn't a straight line journey, but you just make adjustments and you keep going. This is where I want to go. And I'm going to keep making traction towards it. You have to adjust as life happens, certainly, but you continually make progress and you remind yourself, this is how far I've come and this is where I need to go. And for me, my spreadsheets have spreadsheets. And so you just keep knocking at those lines to get it to come down. And ultimately, then you're done. And you're like, I just got here. And certainly it doesn't feel like eight and a half years. But it's exciting to now be on the other side and to go, okay, I now have this legacy, this responsibility to now

walk forward to become that everyday millionaire and to do everything that, I now have this legacy, this responsibility to now walk forward, to become that everyday millionaire and to do everything that the Lord has for me with my finances. Amen. Way to go, kiddo. You're a rock star. Thank you. If I'm going to be off, we can just let you fill in. Yes, sir.

You got this dialed in. I'm available. Let me know. Very, very, very well done. Who is your biggest cheerleader? I've been blessed. I have a lot of cheerleaders in my life, certainly. First and foremost, my best friend, Francis, friend and mentor, Michelle, and my mom and everybody at Green Acres and the singles ministry.

And certainly my co-coordinators, the Grimes, Jean and Jeanine and Robert. It's been neat to be able to walk this journey with them from them seeing me. That first class I previewed but then couldn't really come to, and then the couple of classes I took with them, they're like, how about you just do this with us? And so it's been neat to walk this journey with them and then celebrating me to being able to celebrate them when they paid off their house and then them being able to celebrate me when I paid off mine.

And so it's been really neat to walk this journey with a multitude of people, and my friends are all watching live and excited for me. Well, I'm proud of you. Thank you. Very, very well done. Very well done. And thank you for leading so many classes. Yes, sir.

You've helped a lot of people. You really have. It's my privilege. That's pretty impressive stuff. Well, of course, we have a copy of Chris Hogan's Everyday Millionaires, number one bestseller for you. Because that will be your next chapter. Absolutely.

Without a doubt, you are on the way. And you're going to prove it can be done without making $240,000. You can do it making $40,000. Yes, sir. And you're on your way to proving that. So very, very well done. Proud of you. All right.

Skyla from Tyler, Texas, $95,000 paid off. That includes her house and everything. I'm looking at weird people. Did it in eight and a half years, making 31 to 42. Count it down. Let's hear a debt-free scream. Three, two, one. I'm debt-free!

I'm debt-free! Woo-hoo! Boom! That is how it's done, ladies and gentlemen. That's how it's done. Wow. Absolutely fabulous. Congratulations.

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You'll save even more. Use the promo code Ramsey to get the best deal. Caitlin is in North Carolina. Dave, I paid off my credit card, and I'd like to close it out completely, so I'm not being charged $95 annual fee. I've heard that canceling your cards is, quote, bad for your credit, unquote. What do you suggest? Keep the card and the $95 annual fee or cancel it completely?

Always cancel it completely. We don't want to set out to do something to destroy or harm your credit on purpose. But we also are not going to play their game. And their game is to keep you in debt and paying them fees in order to keep your credit bureau score, your credit report score high, your credit, your FICO score high. And I'm not going to, the FICO score is just a measure of how much you play kissy face with the bank. It's not a measure of whether you're winning with money. It does not say you're winning with money. It does not say you're winning with money.

It says you've been in debt, are in debt, and have paid it back. That's all it says. So we don't want to worship at the altar of the great FICO. Oh, great FICO, you are our provider. Not. I'm sorry, but your credit score is going to go down because you're going to cancel this stupid card. This is the Dave Ramsey Show. Thank you for joining us, America.

Margaret is in Huntsville. Welcome to The Dave Ramsey Show, Margaret. Hi, Dave. Thanks for speaking with me. Certainly. How can I help? Hey, so I'm finishing up Baby Step 3B, and I'm now evaluating my retirement investment options for Baby Step 4.

Yay. So, yes, I'm very excited. My plan is to first max out my Roth IRA, like you've talked about, but I'm less sure to do with my work options after that, because my work option is a 403B, and pretty much everything inside of it in terms of investment vehicles are annuities. And that doesn't sound great. So I'm wondering, and also I'm 26. I have plenty of time for this stuff to grow.

So I'm wondering if I should be putting the rest of the 15% in those annuities or should I turn to like a non-tax advantage vehicle? Depends on how bad the annuities, or should I turn to, like, a non-tax-advantaged vehicle? Depends on how bad the annuities are. They'd have to be really bad to turn away from the non-tax-advantaged vehicle. So what's your household income? Right now I make $43,000, and then I'm getting a raise in a couple months because I'm finishing up my master's that I cash-flowed. And what will you make? $52,000.

Okay. All right. And so we're trying to get to only $7,800, right? Which is 15% of $52,000. And you've already got $6,000 going into a Roth. So we're only talking about $1,800 a year. Okay. So it's not a ton of money. And so with that in mind, I would just use the 403B. Now, here's what to look for. How many different annuity options do they provide you in the 403B? I'm trying to still figure that out specifically,

but it's five different companies that they have relationships with. Okay. Here's what you're looking for. There are two kinds of annuities, fixed and variable. You do not want a fixed annuity or a guaranteed annuity. That's going to pay just above CD rates, maybe one and a half to two percent. Okay. They suck beyond belief. Stay away from those. It's a bad savings account with a life insurance company. That's all a fixed annuity is. You never buy those. A variable annuity, however, can be a good thing. And what a variable annuity is is an annuity wrapped around mutual funds.

And so you can select the mutual funds inside the variable annuity. And if it's a good variable annuity with good selections, you can select some good mutual funds. The four categories that we talk about with long track records of five or ten years or more, and that's growth, growth in income, aggressive growth, and international. If that's the case, then the only thing that will suck about this is is that you are paying an extra fee to the annuit to the insurance company for the annuity so that your so so that your retirement is growing tax deferred which it already is because it's in a 403b so that's how these insurance companies that sell these 403bs rip people off as it's a redundant product, meaning it's double up. You can't twice shelter the money.

It only gets sheltered once, but you're paying an extra annuity fee for it to be tax deferred. And so if you can find a good variable annuity among those four or five companies, that's the one I would pick. And what I do is just take your options your 403b options to your smart investor pro when you go to open up your roth ira and they'll help you with your selection over at over at work okay they'll help you go through that and they'll go oh don't do that that's a fixed here this is a pretty good company they're variable their fees aren't super bad and the mutual funds are excellent and again we, we're only putting in $1,800 out of $7,800, so the bulk of it's going to be in really well-invested in a tax-free growth Roth IRA.

That's going to be just wonderful. And then as your income goes up and things change over the years, you'll do more in different things. But you've got a really, really good start at 26. You are killing it. So proud of you. Good job. Frederico is with us in Las Vegas. Hi, Frederico. Welcome to the Dave Ramsey Show. Hi, Dave. Happy President's Day.

Happy President's Day to you. How can I help? Hi. About two or three years ago, I dropped out of college because I was working a part-time job where I saw an opportunity to leap into a web development career. Three years later, I am a successful web developer. I have about $20,000 in debt that I'm looking to pay off within the next year to a year and a half. In order to finish my degree, it's probably going to be about another $10,000 investment, and the degree would be in computer engineering. I'm looking to see if you think that that would be worth it in my situation.

What do you make as a web developer? $82,000. Okay, and what are you doing? Are you Ruby, or what are you doing? What kind of web development? I work on HTML, CSS, JavaScript, and React's front end. Okay, cool. And have you gotten certs in any of those areas, any of the certifications, the industry certs?

No, no certs. I do have two years of professional experience, but no cert. Okay, gotcha. Okay. And so, well, my experience with, we've got about 300 tech folks on our team, a bunch of JavaScript people, a bunch of Ruby people, a bunch of architect people, platform people, everything else. And a lot of them make very, very good money on our team. And we're always looking for more, as a matter of fact. But aside from that, my experience with them is whether they have a four-year degree is almost irrelevant.

It's whether or not they know the code. And we look more to the certs when we're hiring, and actually we'll do a code test before we hire them to see if they know how to write or not. Because a lot of people think they're a coder and they're not. You know the business, right? Yeah. So we get in, we actually test them. And if they test out, we don't really care where they learned the skill. A four-year degree in information systems or computer engineering, honestly, most of the stuff you study is already out of date.

Yeah. Getting that degree. There's a few places you can go and get a technology degree that's up to date, but most of the time, I mean, if you'll go get your certifications in these areas, that is more valuable than the other. If you want to go back just because you feel like you'd like to have that notch in your belt to have the degree, $10,000 is within reach. You make $82,000, get yourself out of debt, save up $10,000, and go knock out your degree, right?

Or see if work will pay for it they might even pay for it do you see guys making a ton more money than you're making just because they got a four-year uh no i i definitely don't um it is really reflective of their skill um in fact a lot of people in my last job didn't have a degree, but they were probably the most senior engineers. I do have a CEO of the last company I worked at telling me I should probably go back and get my degree, and a lot of families saying that. That's why I wanted to reach out to you. Yeah, it's a nice thing to have as a life bucket list kind of a thing. And would you maybe make $10,000 extra over the scope of your life because you did that? Yeah, probably. You might actually even learn something that would cause you to make,

that would increase your skill level $10,000 worth. I mean, all you get is make an extra grand a year for 10 years because of it, right? It's not hard to get an ROI on this level of an investment. But I just always want to check myself, particularly in the technology field, that this mythology that a degree is necessary to win. No, it's the knowledge you get when you're getting the degree that causes you to win. Like a business degree, you learn statistics and marketing and finance and accounting and leadership and management.

All of that stuff actually is applicable when you go into business, you know? But you get a four-year information systems degree from some university that's not kept up to snuff with what's going on, I mean, you'll come out with dadgum COBOL or something. I mean, it's just you'll come out with Cold Fusion or something that people just don't use anymore, and it's just useless. I was laughing with my tech guys the other day when I was in school. Now, anyway, yeah, I think you're fine.

If you want to go get it, go get it. But I don't think it's necessary for you to win. It's not mandatory, but it's not a horrible investment. I think you'll probably learn something that's worth 10 grand over the scope of your life, and it'll be satisfying to have that uh for your degree but it's far from an entry it's not like you have a barrier of entry what you've discovered is what i believe to be true to in the space mainly because i got a bunch of them working for me millions of dollars of payroll are these people working for me and on our team here and you know

it's based on your skill and really that's true most anything actually but it's based on your skill can you do the work and can you develop that and can you grow that skill that's what things that's what people are looking for when they're hiring you a good question thank you for joining us this is the dave ramsey show This is The Dave Ramsey Show. Hey, it's Kelly, associate producer and phone screener for The Dave Ramsey Show. This episode is over, but if you heard about a product or service and didn't have a chance to write it down, don't worry. We list everything that is mentioned during this episode in the podcast show notes section. Thanks for listening.