The Ramsey Show - App - Manage Your Emotions - Don't Let Your Emotions Manage You! (Hour 3)

Episode Date: December 25, 2019

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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. I am Dave Ramsey, your host. Thank you for joining us, America. We're glad you're here. Open phones at 888-825-5225. Danielle is with us in New York City. Merry Christmas to you, Danielle.

Merry Christmas. Thank you. How can I help today? Well, I'm a newer listener. I just discovered your show. I try to listen every day, and I'm motivated to get my hour finances on check. We have basically not done any of your steps in order. And so I'm backpedaling and we have about $20,000 in credit card debt that I

want to get on top of. And I'm wondering if, um, like a debt consolidation loan, um loan is a good idea. Okay. Well, generally it is not, because generally you end up paying more in interest and not less. So you have credit card debt that you want to consolidate. Right. How much credit card debt do you have? It's about $20,000.

Okay. And what's your household income about $20,000. Okay. And what's your household income? $250,000. Okay. All right. And what do you think your interest rates are on that $20,000? They range, I would say, from probably 11% to maybe 19% or 21%. Okay.

All right. So if you could save 10% on the interest for one year, you would save $2,000. Right? Okay. Does that sound right? And that would be okay to do if you can pull that off as long as it's not a second mortgage on your home. But mainly it's only okay to do is if you have a game plan

to attack all of your debt very very aggressively which it sounds like you're ready to do because here's the problem people do debt consolidation and they feel like oh now i've got a lower payment and the pressure goes off and they go back to their old evil ways right and you don't want to do that okay okay? You guys make a ton of money. You should blow through this debt and be done with it very, very quickly. How much other debt do you have, not counting your home? We do have two fairly expensive cars that are on the newer side. And what do you owe on those cars?

Probably $65,000. Okay. Each or one? No, together. Okay. Each or one? No, together. Okay. And what else do you have? Um, we have no student loan debt anymore. That's done.

Good. Um, we have about $500,000 in retirement between the two of us. Mm-hmm. Um, plus we'll both get pensions when we retire. Mm-hmm. So I feel like we're in good shape for retirement. Temporarily, you're heading in the right way. That won't do it if you're used to making $250,000, but you've got a good start.

And so what do you guys do for a living? We're both teachers. Very good. Okay, great, great. So this is your only debt is $85,000? Yes, the cars and the credit card, yeah, other than our house. Okay. So here's what I would say is if you go on beans and rice, rice and beans, a scorched earth lifestyle making $250,000 a year,

how fast do you pay off $85,000? My God, I don't know. $85,000? My God, I don't know. $85,000 from $250,000 leaves a lot. Yes, it does. It's like $7,000. It's like $6,000 or $7,000. Sorry, go ahead. That's okay.

Stop all of your retirement temporarily. Be on a written budget. The two of you sit down together, write this out, and say, this is vital, it's important. And the faster we do this, the more successful we will be with it. And the way you do it the fastest is you cut the deepest. Okay? So if I said, you know, 85 from 250, that would leave 165 to live on not counting taxes.

Right. Now, you are in an expensive world that you live in, but really, you don't have to do that. Like, that's like one year. Yeah, we just need to get on a budget. It would be like like super super tight your friends are going to think you joined a cult okay because you're not going to see the inside of a restaurant you're not going on vacation we are getting out of debt because you've been just sloppy is all you've been you make so much money you've been sloppy very and you can do it you can

do it you've not been it's not like you've been way out of control, stupid or crazy. You've just been disorganized, sloppy. You weren't paying attention to it. It's like when you're, what do you teach, what subject do you teach? Elementary school. And what age? First grade. Oh, wow.

So you really do get to see the bright student that you really wish they would apply themselves? Yeah. That's you. That's you. Do you really do get to see the bright student that you really wish they would apply themselves? Yeah. That's you. That's you. You're my new bright student, and I want you to apply yourself, okay? Okay. Because you know that when you look at that kid, you can see what they can do.

They don't see they can do it yet, but I mean, I'm looking at your math. A year, year and a half, depending on your taxes, stopping all your retirement, completely focused, trashing your lifestyle where people think you're weird, and you just get after it. See, that solves the $20,000 problem so quickly that debt consolidation, the math on it doesn't do much good. Okay. Because you're going to pay the $20,000 off really fast. Okay. If we're paying off $85,000 in a year.

Right. That makes sense. And that's how I would get after this. So it's a good question. It's a good discussion. You got this, kiddo. You can do it. You can do it. I know you can do it.

I can see your potential. Now if I could just get you to do it. Open phones at 888-825-5225. Thank you for being with us. Yehuda is with us in Baltimore. Hey, Yehuda, what's up? Hey, how's it going? Better than I deserve. How can I help?

Good, good. I have a quick question for you. I know you're not a fan of having a credit card. I've heard you say that many times. I was just wondering, how is someone supposed to build credit without using credit cards? Why would you want to build credit without using credit cards why would you want to build credit so don't you need credit to get a mortgage oh so you can go in debt okay

actually you don't well to get a mortgage you don't why if you could get a mortgage without building credit what why else would you build credit so so that's a good can you get a mortgage without building credit yeah i'll tell you how in a good question. Can you get a mortgage without building credit? Yeah, I'll tell you how in a minute. But if you could get a mortgage without building credit and you had a zero credit score, is there any other reason you would want to build credit? Not particularly.

Okay. Because really, the thing of building credit is a thing invented by the banks because basically it works like this i'm going to go into debt why so i can build credit why so i can go into debt why so i can build credit why so i can go into debt why so i can build credit why because i just love banks you know that's really what the whole society is turned into if you think about it and so you can get a mortgage with a zero credit score if you go to a mortgage company like

churchill mortgage that does what's called or was willing to do what's called manual underwriting which means they verify your job they verify your income they verify your income, they verify your savings position, and they'll verify that you paid your landlord earlier on time, and with zero credit score, you can get the same interest rate, the same mortgage as someone without. But you have to have a mortgage company that knows how to and is willing to go to the trouble. It's extra trouble for them to do manual underwriting, and Churchill Mortgage is one of them that will do that. We endorse Churchill, and we love them, and that's what we'd recommend, avoiding debt.

How often can you get the best of both worlds? Not very often, right? Well, with the Rate Secured program at Churchill Mortgage, it's possible. You can secure a low rate now to nail down your budget and if rates drop while you're shopping for a home, they'll give you the lower rate. That's right. They take on the risk of fluctuating interest rates, not you. Who does that? Well, you should fall in love with the numbers before you fall in love with the house. This program lets you do just that. So if you're buying a home this year, you'd be crazy not to call Churchill and get your rate

secured now. Call Churchill Mortgage today and have the best of both worlds. Go to ChurchillMortgage.com or call 888-LOAN-200. That's ChurchillMortgage.com. This is a paid advertisement. NMLS ID 1591. NMLSconsumeraccess.org. Equal housing lender. 761 Old Hickory Boulevard, Brentwood, Tennessee 37027. Phil is with us in Denver. Merry Christmas, Phil. Welcome to the Dave Ramsey Show. What's up? Hi, Dave.

Merry Christmas to you and your family. Thank you. I have a question about 529 investing and strategy. I have a three-and-a-half-year-old, and I opened a 529 basically as soon as we got a Social Security number. And after capping out for my wife and I for four years now, I got about $130,000 in that account. And so moving forward, the general feedback I get is, I'm already bumping up against too high of a number.

Maybe I should be putting it somewhere else. And I'm not entirely convinced about that. Yep. I wanted to hear your thoughts on it. I would. I wanted to hear your thoughts on it. I would. I think you've got enough. Because if you fast forward what $130,000 is going to be worth 15 years from today, if that's invested in good mutual funds inside that $529,000, you're going to have too much

in there. Right. So you don't need to put any more in that. Because here's the thing. You can take the money out and use it for education, and that's all. If they get a scholarship, you can pull that amount of money out without any taxes. You can use the money for education without any taxes, but if you pull the money out for anything else,

or unless you transfer it to a sibling of the child, then you're going to get taxed and penalized like you were taking money out of a 401K early or something. And, you know, at that point, you've got too much in there. And, yeah, I think you probably do have more than enough in there. I wouldn't put another dime in that. So I guess the ancillary question is that right now it grows tax-deferred, and I'm at a pretty high tax rate at the moment. It grows tax-free.

It does not grow tax-free. It does not grow oh yeah i'll see just a standard you know mutual fund right now yearly i'd be at a pretty high tax rate which may be 10 higher than what i'll be at let's say in 20 years when i'm pulling it out and that's sort of the why would your tax rate go down 20 years from now? Well, if I'm retired and living on my retirement savings at that point. Well, I hope you've got enough retirement savings that your tax rate goes up. If you build substantial wealth, your tax rate will not go down because your income will be as much or higher just off of your investments than it is now. And you're the kind of guy that's going to do that based on the kind of thing you're telling me here.

So, no, I'm not going to play that game. Plus, you haven't paid off your mortgage yet, have you? I'll be paid off in about 14 months, but not yet. Until you've done that, we don't have a discussion. But, you know, what I have done is just stay debt-free, and I use a max-out retirement, and I put the appropriate amount in kids' college. We did not have 529s or ESA available 25 years ago, 30 years ago ago when we were saving for kids' college. But then from there, what you can do is two things or three things that I have done,

if you wanted to, to avoid taxes. You can buy low turnover mutual funds. And an example, that means they don't sell the stocks inside the mutual fund very often. A low turnover mutual fund would have a 5% or less turnover ratio. And so that means those stocks inside that mutual fund, that mutual fund value is growing tax-deferred, capital gains-wise. And when you pull it out, it's taxed at a capital gains rate if you've left it on one year, which would be less than your current tax rate or your future tax rate. So it is tax advantaged in two ways. One, it's growing capital because if a stock goes from $50 to $70, you don't pay tax on

that $20 until you sell it, right? Right. And that's what's happening with a low turnover mutual fund. So I've done some of that. An easy way to do that is just like a no-load S&P fund. Okay? And that's not a big part of my strategy, but I have some in there. The second thing you can do is buy real estate that you pay cash for,

which will, of course, do the same thing. It grows with tax-deferred growth because it's capital gains-type growth. You don't pay taxes on the increase in value of a piece of real estate until it sells. And there was a third thing, and I lost it. But that's the two main things I have. Oh, as far as the kid goes, that was it. The third thing is you can put some more money just in the kid's name, and that's called an UTMA, a Uniform Transfer to Minors Act.

And then that account's growth is taxed at the kid's rate, not at your rate. Gotcha. And so it is a lower tax there, and for the first big block of money it makes, if you file and let the kid take their own standard deduction, you don't use them as a deduction, depending on which way works best in your tax planning, then you can actually grow that account quite a bit without paying a diamond taxes on it for the first big chunks of money that it makes uh and so i actually did all three of those things because the utima was the only thing we had back in the day there was no 529s or esas the utmost what you did for college

planning but all that is is opening an account in the kid's name, and you're the custodian of it. It's their money when they turn 21. You lose control of it at that point. And so we used to laughingly say, let the beatings begin. Yeah, you've got to make sure the kid has got some character because you're getting ready to hand them a lot of money, and if they're doing cocaine, you just finance their habit. So that's not a plan. But anyway, that's the three things that we did, and they were all tax advantaged

and gave us a lot of flexibility because you end up with just a big pile of money, and then you can kind of do, you know, I can just take care of college over here if they want to go get a master's degree or a Ph.D. or something. You know, the ESA or the 529s run dry. Well, you've got plenty of money. You just go over there and do it, pull it out of their UTMA, or you just, you know, the esa or the 529s run dry well you've got plenty of money just go over there and do it pull it out of their utma or you just you know pull it out of some of your wealth but you're going to have plenty of wealth you're not going to come up short it's just a matter of how to keep the government's hands off of it um and one last thing on that

phil and i did a lot of what you're doing i used to think you spent a lot of my time um and effort and i still do by the way um think, I used to spend a lot of my time and effort, and I still do, by the way, trying to keep the government's hands off of my money because it's my money. And any legal way that is proper under the code that I can, any move I can make to keep their hands off of it, it is my job as a good manager of the money for God to do that. Because sending the money to Washington, D.C. is not a godly activity. And so I'm not doing that unless I have to by law. And so I spend a lot of time and I actually spend a lot of money now with tax experts trying to, you know, do whatever I can that's reasonable and smart.

What you don't want to do in that discussion discussion and i've seen people do this all throughout my career is you cut your nose off to spite your face and what that means is you you start making bad moves because they're good tax moves but they're bad economic moves the economics behind the move don't make sense and so you end up in bad investments or are trapped in some kind of a thing or you build this flow chart of companies that money gets trapped in and you can really get yourself in a mess there. So don't spend so much effort trying to keep taxes off of wealth that you forget to build wealth.

And people do that. People do that all the time. I'm not saying you are yet, but guys that think like you and me, where we just hate sending money to Washington, we have a tendency towards making that mistake. And I have made that mistake, and I've seen people throughout my career of coaching people make that mistake a lot. They spend 90% of their time on taxation and 10% on wealth building instead of 90% on wealth

building and 10% on dealing with the taxation, which would probably be about the right ratio. So yes, you want to be wise. Yes, you want to be thoughtful. But don't overthink it to the point you put yourself in a bad situation. Good question, sir. Very good question. And I love where you are. Wouldn't you guys like to have your three-and-a-half-year-old already have $130,000 for their college?

That's where he's sitting. I mean, what a stud. That is very well done. I mean, that college, checkbox, you know? That one's done. Baby step five, over. Over and out, right? I mean, I love it.

That is so well played. So well played. Hey, guys, you can do this stuff. People, that's one of the reasons. I love having people on this show that have messed up like me and you and some of the rest of you. But I also like people like that on there. They're so studly. They got their crap together, you know, which says you're in your 30s.

You can get your crap together. You can actually be like a grown-up and everything. Wow. It's doable. This is The Dave Ramsey Show. Support a small business this holiday season that does business right. I'm talking about Grip6 belts. It's the only belt you can get online with no holes, no flap, and no bulk. And the buckles come in really cool designs and are interchangeable.

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Grip6.com. They have a 100% satisfaction guarantee. That means even if you mismeasure or pick the wrong color, they will remake your window blinds for free. Site-wide savings is happening right now, plus take an additional 5% off at Blinds.com. Alina in New York says, I love my husband and I want to overcome our issue around money. However, my husband lacks the ability or desire to change spending habits that affect me too he says he wants to change says he's going to change but it's always next week or next month i can't handle the constant roller coaster

help please is there any hope for us? It's killing our marriage. If we changed the subject from money to alcoholism or drug use, it would sound exactly the same. I love my husband, and I want to overcome our issues around his use of illegal drugs. However, my husband lacks the ability or desire to change his habits, and they affect me too. Says he wants to change, going to change, but it's always next week or next month. I can't handle it. Please help. Is there any hope for us?

It's killing our marriage. So it's a misbehavior is what it amounts to. In this case, thank God it's not drug use or alcoholism, which is much more difficult to overcome than simple immaturity, which is what this is. The inability to control impulses is attributed to children. Children do what feels good. I can't control my impulses. People like me just buy stuff.

People like you are children. It's a childish behavior. The inability to engage in basic self-control is childish it is what children do there are a lot of emotional children walking around in adult-sized bodies i get that sometimes i'm that guy sometimes i you know i want a chocolate chip cookie shut up you know and uh you know the inability to control that impulse but self-control is an attribute being able to delay pleasure for a greater good is an attribute of adulthood so any of us when we cave to our childish impulses rather than do what's good for the long term for ourselves and those that we love

you know all of us do that the problem is when you do it more than you do the adult stuff adults devise a plan and follow what children do what feels good and so what's important for all of us is to do more adult stuff than childish stuff so we get to be an adult. But when you are more childish than you are adult, then your spouse writes me an email and says, it's killing our marriage because I'm married to a little boy. A little boy who cannot control his spending. You know, I mean, that's what she's saying. And it's like, yeah, man, dude, come on, you wuss.

Man up. Your woman is calling you a boy child. Seriously. So how do you fix that? That's not a financial problem. That's a maturity problem. One definition of maturity is the ability to delay pleasure, learning to delay pleasure. Live like no one else so that later we can live and give like no one else. You don't accidentally win.

And so it's about, this is about maturity. It's about growing up. And it's about him putting the good of his family, the good of his relationship with his wife, ahead of his own selfish little childish impulses. He's selfish. That's the problem. We all are sometimes. I'm the same way.

Sometimes I do Sharon exactly the same way. Sometimes she does me the same way. You know what I mean? We all do this stuff. The question is at what percentage? And the lower my percentage of stupid childish impulses, the higher percentage or the higher quality of life I have. I mean, how many people, they impulse a Porsche, you know?

You can impulse an F-150. That'll kill you, man. That'll kill you. You cannot impulse that stuff. This is a major decision when you're spending money like this. So, the answer to your question, Helena, is that you should go and see a marriage counselor. You ought to ask him to come with you.

Because I'm afraid your marriage is going to end if he doesn't grow up. Because you're tired of living with a little boy. This, the wording in your email submission is dripping with anger due to frustration. I don't really blame you, but the problem with that is you're going to reach a point that the switch is going to flip, and you're done, and there's not going to be any getting you back into the deal. When people's switch flips particularly ladies

i've watched it happen for 30 years where the marriage is struggling and i'm doing financial coaching and she's just hanging on and hanging hanging on hanging on hanging on hanging on can't believe she's hung on this long and then i'm thinking man that maybe this old boy's going to turn around and hanging on hanging on boom she Boom, she's done. All of a sudden, the switch, just like a light switch, it just goes to off. And no marriage counselor, no pastor, no friend, no parent can talk her into coming back. She's done. Baked turkey, man. I mean, it's over.

And so you don't want you to be that, Helena. You want to catch this before you get closer to the switch than you realize you are. And that means you guys need some marital help, big time. You need a marriage counselor. And go see your pastor. Find out if they do marriage counseling at your church. Get a good Christian marriage counselor to walk you through this and talk to you about relationships and spiritual things and him. And if he won't go, at least you can go to learn how to talk to him to get him to go.

Because you guys are going to have to get on the same page. This guy, something's got to shake him, and he's got to grow up. Because you are married to a boy child we have a manhood crisis in this culture there's a shortage there's some males in the culture but there's a manhood shortage and there's an adulthood shortage in general a lot of people walking around that somehow their emotional growth was stunted and they never really came all the way into adulthood for whatever reason and we can see that by their childish impulsive selfish misbehavior. Again, I've done it too. I'm not saying I'm any better. I'm not being condescending.

So those of you that think I'm condescending, that's just because you are being convicted by this very little rant right here. I'm not condescending at all. I've done every bit of this. I've been more immature and more impulsive and more stupid than all of you. But when I quit doing it to the extent I quit doing it, the quality of my life goes up. The quality of my relationships go up.

The results I get in the marketplace go up. When I manage my emotions instead of them managing me, and it keeps me from being impulsive because I'm angry, or impulsive because I'm scared, or impulsive because I'm just four years old down inside. When I manage that, and it's called self-control, it is the attribute of an adult. I get a better life. And that's how I've gotten a better life. And that's how I've gotten a better life. And that's why I'm a better grandpa than I was a daddy.

And by the way, that's a rule. You have to be a better grandpa than you were a daddy because you should have learned something through all those years. My gosh, you didn't learn anything. What are you, just stupid? Papa Dave ought to be better at this than he was when he was 30. Right? Same thing with your money. Same thing with your career. Same thing with the whole deal.

All your relationships, right? It's called growing up. That's what it's about. Adulting. That's what the millennials call it, right? Adulting. That's what we're talking about here. This is the Dave Ramsey Show. In a season of giving, what better gift can you give someone in the coming year than a new job?

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Get started today and get $50 off your first job post. Visit linkedin.com slash Ramsey. That's linkedin.com slash Ramsey. Terms and conditions apply. Our scripture of the day, Proverbs 27, 17. As iron sharpens iron, so one person sharpens another. Rick Warren said, experience is not what happens to you. It is what you do with what happens to you. Don't waste your pain.

Use it to help others. Now, I got a good friend of mine. He says, I don't trust someone that doesn't walk with a limp. If you've never had any pain, I mean, you've never been busted. You've never been knocked down. You've never been so scared you can't breathe. Yeah. It's a different place, you know.

Puts you in a different position. Carl is with us in Syracuse, New York. Hi, Carl. Welcome to the Dave Ramsey Show. Hello. Thanks for taking my call, Dave. Sure. What's up?

I have a pretty simple question probably for you. I'm leaving one job and going to another, of course. With the job that I'm currently leaving, I will be taking a check for $10,000 from the retirement system that they have offered me. I have a car that I owe $8,000 on with a $220 a month payment. Should I pay that off? And I don't know about the fees and the penalties, however. How old are you? 55. Okay. No, you will be penalized 10% plus your tax rate,

and so depending on what brackets you're in, you're going to be paying somewhere north of 30% on this money to pull it out. I would instead roll it to an IRA and keep from having to pay any fees or penalties on it. You wouldn't borrow money at 30% interest to pay off the car. No. And it's the same thing mathematically. So, no, we don't cash out retirement plans to pay off debt unless it's to avoid bankruptcy or foreclosure.

Rick is in Denver. Hey, Rick, Merry Christmas to you. Thank you. Thank you. I want to compliment your call screener. She makes decisions quickly. Very good. Thank you. How you. I want to compliment your call screener. She makes decisions quickly. Very good. Thank you. How can I help? I've got an insurance policy that I bought 50 years ago on my life. The wife owns it.

She's been listening to you and thinks maybe we should cash it in. I'd like to keep it. So we're going to let you give us the advice. It's the annual premium is $454 a month, or a year. The cash value right now is $121,000, a little over $121,000. Insurance amount

is $149,000. It's a participating policy. Last year the increase was $5,400, about a 4.69% increase. Right. How old are you? We're both retired. We have no debt. Here's the situation, Rick.

When you die with this policy in place, they're going to pay your wife $149,000. Right. So you do not, and you lose your $121,000. I what? You lose the $121,000. They're going to pay $149,000. They're going to keep your $121,000 savings. They don't pay her $150,000.

They pay her $149,000. Well, but every year that goes up. No, but you're misunderstanding me. You've been paying extra all these years to create this savings account called cash value. You've been paying five times extra over what term insurance is, probably as much as 20 times extra in order to create this savings account of $121,000. So you really don't have $149,000 worth of insurance. You really have about $20,000 worth because you've got $121,000 of your money sitting there that they're going to keep.

And they're going to pay her $149,000. So the net of those two is really all the insurance is worth. Do you see what I'm saying? No, I've paid $24,000 over the 50 years. Yeah, I know. Let's try it this way. Let's try it this way. Stop, stop, stop a second. Let's try it this way. Let's try it this way. Stop, stop, stop a second. Let's try it this way.

If you take this out and cash this out, you'd have $121,000 in the bank, right? Uh-huh. And so when you die, there'd still be $121,000 in the bank, right? Mm-hmm. And if you took out a $20,000 insurance policy, you'd have the same amount of money for her, right?

$121,000 in the bank plus a $20,000 policy is $141,000. It's the same deal. So you're paying an awful lot of money for basically $20,000 worth of insurance net, like a ton of money. And you've got, so the answer to your question overall is, yes, I would cash this out in 20 seconds. Get it out there fast, because I don't want to die tonight with it in there. I want to get it out there in the hands as fast as I possibly can.

And put it in investments. Put it in investments. You'll make a lot more than 4% to start with. And top of that uh when you die they don't keep it but right now they're going to keep it they're going to you've got 149 000 life insurance policy with zero savings or you've got 121 000 worth of savings and 25 000 worth of life insurance is what totals 149 you can look at it however you want to look at it but it's one of those two it's not both you don't get 149 at death plus 121 and you've paid extra to have the savings all these years and then they're going to keep it when you die effectively so um the whole whole life investment type life insurance is one of the worst financial products on the planet.

And so, yes, I'm going to get out of this so fast. It's scaring me that we're not out of it already. Get out of it by the end of the day as quickly as you possibly can. And that's the reasoning. I mean, it's real simple. It's a lot of money that you have built up in there. It's real simple. It's a lot of money that you have built up in there. It's your money. And so effectively, you know, it's gone because you're paying a lot of money for $149,000 life insurance policy.

Okay, that's enough. Yeah, cash it out. All right, Sarah is in Portland, Oregon. Hey, Sarah, welcome to the Dave Ramsey Show. Thank you for taking my call, Dave. Sure. What's up? My question is my husband and I have about $5,000

left to pay off in Baby Step No. 2, and we were wondering if we should cash out some single stocks to pay off the remaining debts, and that is non-retirement. Yes. Anytime you have any money that's non-retirement, we use that. We cash it out of wherever, all the way down to $1,000 until we're debt-free.

Okay. So how much have you got in single stocks? We have $12,500 in single stocks. Okay, great. And do you have any debt other than the $5,000? No. I've been listening to you since April, and I've paid off $20,000 already. Way to go, kiddo. Awesome. Proud of you.

Thank you. And do you have any money in your emergency fund? Yes, $1,000. Oh, you're following the plan. Look at you. I like it. Okay, so cash out the entire $12,500, and let's pay off the $5,000 worth of debt,

put $7,500 with your $1,000, and now we're on our way to finishing our emergency fund of three to six months of expenses. Okay, and how much would I expect in taxes and fees, do you think, out of that $12,500? How much should I set aside for that? It depends on what you paid for the stock. Your basis is what you paid for. Do you have any idea what you paid for it? Well, my husband started with $5,000, and it's grown from $5,000 to $12,500 in the last 15 years.

Okay, then that's a $7,000 gain, and it would be at 15% of $7,000, so probably roughly $1,000. Okay. But if you want to calculate it very precisely, the proper way to do it would be to contact the stock brokerage firm that has the stuff, or even the company that you have the stock with, and find out what your basis is, meaning exactly what he paid for it, and then exactly what it sells for, and then the difference exactly times

15% is going to be your taxes. Okay. Your gain, your capital gain is taxed at long-term capital gains are taxed at 15%. Wow, you're doing so good, Sarah. Congratulations. Very, very, very well done. Open phones at 888-825-5225. Thank you for joining us, America.

Merry Christmas to you. We're so glad you're with us. So glad. So many of you are doing so good. Man, there's so many good things happening out there. You are really doing good. I believe in you. Keep it up.

Keep it up. That puts us out of the Day Bramsley Show and the books. We'll be back with you before you know it. In the meantime, remember, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus. Hey, guys, it's Blake Thompson, Senior Executive Producer for The Dave Ramsey Show. This hour is over, but you can find more great content on our YouTube channel. Catch the most watched Dave Rants,

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