The Ramsey Show - App - Money Habits That Will Make You a Millionaire (Hour 3)

Episode Date: October 11, 2018

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Live from the headquarters of Ramsey Solutions, it's the Dave Ramsey Show, where debt is dumb, cash is king, and the paid off home mortgage has taken the place of the BMW as the status symbol of choice. I am Dave Ramsey, your host. Thank you for joining us, America. It's a free call anywhere in North America. The phone number is 888-825-5225. Hey, did you guys hear the stock market's down?

You know, if it goes up, it's never in the news. But when it goes down, it's like headlines. If we didn't have a hurricane, it'd be the headline right now, right? And praying for my friends in Florida. Wow wow you got hammered down there dude that looks rough i will tell you this the stock market will recover a lot faster than a couple of those cities in florida will so here here's what you're facing just Just a reminder, the Dow has dropped a record level. It's not gone down this much since 2016.

And this is what always happens. These people sound like a beagle chasing a rabbit on the news, don't they? This is a wailing and gnashing. Sounds like a 13-year-old boy with his voice changing. It's unbelievable. And here's the thing. You never invest in the stock market in good growth stock mutual funds like I teach you to do for the short term. You never invest for the short term.

You need to plan on leaving that money alone at least five years. Ninety-some-odd percent of the five-year periods in the stock market's history have made money. If you leave it alone, it'll make money. And so when it goes down, with that in mind, what that means is it's on sale. You know, when I was a kid, there was a store called Kmart. Any of you remember Kmart? And we would go to Kmart, and they had this little box on wheels with a pole sticking out of it, and on top of the pole was a blue flashing light. And they would roll that thing around inside the store

and put it up next to some kind of an item and some piece of merchandise and turn on the blue light. And it was called the Blue Light Special. And which made all of us redneck hillbillies get real excited and run to the blue light. You know, it's like moth, like a moth attracted to a flame. You know, it's just unbelievable. We would run over there and buy stuff. We didn't even know what it was because it was on sale it was a blue light special

and uh i just every time i think about something being on sale i think of a blue light special so given that the stock market over 70 years is averaged going up 11% a year, almost 12% a year. Anytime it goes down, since it has a 75-year track record going up, anytime it goes down, I always just visualize somebody rolling that little box with that blue light over next to the stock market and turn it on and say it's a blue light special. There's a sale on. The stock market's on sale this week, people.

Now, I don't suggest you try to figure out when to buy and when to sell. I just buy every month. I buy every single month. I found out that's what millionaires do, and I wanted to be one of them, so I started doing what they do. They put money in their 401K every month, and they don't take it out. They just put money in there every month. And you can start that when you're 22 32 42 or 52 but you can put that money in there every month and you don't stop based on a beagle chasing the rabbit looking into a camera in some new york

studio you don't stop and start and try to figure out when the market's going up or when the market's going down you just buy every month that's going up or when the market's going down. You just buy every month. That's what millionaires do, and it's how they become millionaires. But when you jump up and you jump down and you jumped up and you jumped down and you're trying to figure this out, you're going to lose your butt. No one gets hurt on a roller coaster except those that jump off. Ride the ride. Throw your hands up and say,

Whee! It's on sale! It's a blue light special. Go buy some. I'm always tempted when it goes down to buy extra. I don't even buy extra then. I don't buy extra when it goes up. I don't buy extra when it goes down.

I just buy every single month. My stuff's set up on automatic, and every month my checking account goes down. I just buy every single month. My stuff's set up on automatic, and it just, every month, my checking account gets punched. My ticket gets punched, and it goes into my mutual funds. Because that's what millionaires do. That's what wealthy people do. They don't try to time the market. I remember when the market dove in 2008, and some of the billionaires that have their money tied up in stock would say,

Well, Mr. Buffett, you lost $4 billion today or you lost $400 million today or whatever it is. And he would say, I didn't lose anything because I didn't sell anything. There's no loss unless you sold it. Your value went down, but you didn't sell anything. There's no loss unless you sold it. Your value went down, but you didn't sell it. You know, when you sell it is when you actually trap the losses, when you capture the losses, when you recognize the losses. You haven't lost money on a car until you sell it. When you sell it is when you know you lost the money, right?

But as long as you're driving it it you haven't experienced any loss yet but you know the value has gone down but you haven't sold it but when you actually sell it and you say i put thirty two thousand dollars perfectly good dollars into this thing and i just sold this thing for ten thousand dollars i just experienced a real twenty two thousand000 loss. When you sell it is when you experience the loss. And this is true of the Dow's biggest point drops in history. Oh, my God. You know, it's the same thing, right? The drama around these guys, man, it's amazing.

So don't sell your 401k, your mutual funds. Don't sell your Roth IRA. Don't freak out. Calm down. Calm down. Listen, I tell you, these news guys, man, it's kind of the point that all they do is to try to make you mad or scared. And if they can make you mad or scared, you stay glued to their stupid channel.

And you're scared to death of the hurricane or you're mad about politics or we're scared to death of the stock market. And if you're not scared or mad, you don't seem to stay tuned into these guys, and so they spend a lot of time. The old saying is, if it bleeds, it leads. The bloody car wreck is on the front page of the newspaper, right? The bloody car wreck is on the front page of the thing. The bloody Dow is on the front page of the opening stock. The bloody hurricane is on the front page.

Anytime somebody, you know, if it's bad news or if it'll make you angry. And some of you spend a lot of your time being angry and afraid because you watch too much of this stuff. Turn it off. I'm sitting here.

It's running in my studio right now. I need to grab the remote. Where's the remote? I'm going to turn that off right now. Sitting here looking at it right this second. This is just dumb. I'm sitting here saying it's dumb and I'm doing it. I just turned it off. All right. Feel right now. Sitting here looking at it right this second. This is just dumb. I'm sitting here saying it's dumb, and I'm doing it.

I just turned it off. All right. I feel better now. So a lot of these guys are friends of mine. They're fine. They're not bad people, but that's how that business works. Their ratings come from making you mad or afraid. Be not afraid.

Ride the roller coaster. Woo-hoo! The blue light's on! Time to run towards the light. Not away from it. This is the Dave Ramsey Show. One question I get asked all the time is, do I need life insurance? Listen, the whole point of life insurance is to replace your income for someone who counts on you. So if you have a spouse or you have kids, yes, you need term life insurance.

It's the only way to protect them until you're out of debt and have built up your wealth. You're only digging a deeper hole if you waste money on cash value plans since it robs you of the ability to make real progress. And that's why I send you to Zander Insurance, and I have for 20 years. That's where I get all my insurance, and they only offer the plans I recommend. It is not expensive. It's not complicated. And Zander will be there as your guide every step of the way.

Visit Zander.com or call 800-356-4282. You need to get this taken care of. I can give you the advice, and I can tell you where to go, but it's really up to you to take that important step to get your family protected. That's Zander.com or 800-356-4282. Well, thank you, America. The number of our events that we are doing this fall selling out is amazing. We're going to be in Kansas City this weekend for our Smart Conference, a day-long event. It's coming Saturday. Over 6,000 folks going to be there with all of their MZ personalities, plus a bunch of our friends speaking.

World-class stuff. Complete sellout there in Kansas City. Our Smart Money Tour will be in Minneapolis October the 29th. Chris Hogan and I are doing a live event there at Eagle Brook Church after I speak at Eagle Brook through the weekend. And it is a complete sellout. They do have an overflow venue they're setting up, but it's been a complete sellout for several months, as a matter of fact. A business boutique, our event with Christy Wright, coming up November 1st through the 3rd. Over 3,000 ladies coming, equipping women to make money doing what they love.

Sold out this morning. It's gone. We'll keep it open for a little while because we always have a few no-shows, but it is a sellout. Over 3,000 tickets sold. Thank you very, very much. I've just been speaking this week at our Entree Leadership Master Series, and it was sold out with over 300 people. We keep those events small so that we can have interaction with the people there. But very, very good stuff. Things are on fire around here, without a doubt. The Smart Conference, the day-long event in Dallas, January the 12th, is the next one

that you can get into. I'll be in San Antonio, Texas, Novemberas november the 15th uh for our last smart money event of the year and that event will be a simulcast as well so uh we'll be broadcast over youtube for free or no it's not it's a simulcast i'm sorry it's a um you actually pay for it i think you pay 19 bucks or something or nine bucks or whatever it is it's very inexpensive but you can watch it. It's a great deal, and we'd love to have you do that. And so be sure and check it out.

Streaming. I don't know why I came up with simulcast streaming. Where did I get that? All right. Amara is with us in Battle Creek, Michigan. Hey, Amara, how are you? I'm doing fine. Good.

How can I help? I was calling because I'm a full-time student. I have about a year left in school. I'm a part-time waitress, so my income is low. And I happen to rack up quite a bit of credit card debt over the past five years just from horrible spending habits. And lately, I have been taking out extra student loans to pay down on that credit card debt. No. Student loans have a lower interest rate than credit cards. Yeah.

So altogether right now I've got about $59,000 in debt, 47 in student, about $1,700 in a car loan, and then about $10,000 in credit cards still. So you have a question? Yes. My question is, obviously, should I keep doing that? Okay. No, you should not use student loans to pay credit cards. Okay. Do you have any advice?

My income is about $16,000 to $20,000 per year with my waitressing. So it's just kind of unmanageable right now. Okay. Well, your first goal is, of course, to eat and keep the lights on. Your second goal is to finish school. When will you finish school? I will be finishing next summer. So about a year.

About a year. Yeah. Okay, less than a year. Good. So if you can tread water until then and add no more new debt, that's a victory. Okay? Then the second thing would be to pay the actual payments on the credit card, just minimums, and we'll call that a victory.

And then the third thing would be if you can actually start to make some progress paying down on those. You're not paying anything on the student loans while you're in school, right? Right, which is kind of why I'm using them as leverage to pay off credit cards. It's a really, really dumb idea. You're making a mess. And so have you cut up these credit cards? No, you haven't.

Cut them all up. Yeah, I don't use them. I've switched to switched to i don't care if you use them or not chop them up okay stop using them you have to stop this stuff radically and then the second thing i'm going to tell you is you probably need to work more or at a different place well it can't work more because of my school schedule and at a different place, I'd probably make the best tips in the area where I'm located. Okay. Well, a little more money, another $1,000 a month would change your life. Uh-huh. So that's what I'm looking at is what can I do to create that just on this short term.

You only got about nine months until your income can change, hopefully, with a new job and a new career at that point uh but hang on until then and stop borrowing on student loans to pay off credit cards naomi is in seattle hey naomi how are you better than i deserve thank you sure how can i help um so my husband runs a small business from home, and it hasn't been bringing in as much as it used to. For the past nine months, it's been declining steadily. And so I'm wondering, do we sell our home?

Does he quit the business, get another job? Yes. What's wrong with the business? Why is it dying? I'm not sure. We used to make a combined income of $15,000 a month and now both of us with the business it's down to $5,000 so our home

the mortgage is a large chunk of what we earn now I'm a little bit confused because you muddled everything together so how much of the $15,000 was you? about $3,000 a month are you still doing that? Yes.

Okay, so he was making 12, and now he is making seven. Yes. No, no, no, no, no. Now he's making nothing. His business has almost disappeared. Yes, you do know what's wrong with it. What's wrong with it? I don't know.

I have to talk to him. I feel like it's just competition, and he feels like the market, it's a lot of online stuff. The market is flooded with what he's been doing. Okay, but what does he do? He sells clothes online. Okay. And in the last 12 months,

so many people entered the clothing online business that weren't there before. The brand, I'm not sure. They dropped 90% of his income. Yeah, that's what it appears to look like. And he needs to get a job or he needs to fix this business. Yeah, is selling the home an option? No, because it doesn't fix the problem. The home's not the problem.

The problem is his business is failing. Okay. And we have to either fix it, we have to identify the problems with his business and make the changes to fix the business, or we have to get a job and close the business. One of the two. I don't care if he starts selling something other than clothes. He obviously knew how to sell something on the Internet at one point.

He was doing very well. He's making $150 a year. Yeah. That ain't bad. About three years. Yeah, that ain't bad. So, I mean, he knows how to do something with marketing on the Internet, some kind of digital marketing.

And it may be that the product line he's in or the space he's in got invaded, or maybe he's gotten lazy with his SEO and he's not handling his digital marketing properly, or I don't know. I can't tell what's going on, but I can tell you this, this isn't heading the right way, is it? No, it's not. So I'm going to give, my friend Henry Cloud wrote a book called Necessary Endings. Okay. And in that chapter, in one chapter in that book, he says that when you end something, a relationship, a job, a business, whatever it is, when you end something, it's when it's bad and you have lost hope. You have no reasonable, logical reason to think it's going to get better. And that's when you end it. Right. to think it's going to get better. And that's when you end it, right? I mean, if you've been with a guy who's been drinking for 20 years

and he says he's going to quit, there's no logical reason to believe him unless there's evidence to indicate he actually is quitting this time. And, you know, you're married to a drunk. You've got to make a decision at that point, right? In your case with this thing, this thing's trending the wrong way. You have to give me a logical, if I'm you, you and him, I have to look at this and say, look at yourself in the mirror and say, is there a logical, reasonable, good reason that says that we can turn this thing around if we turn these three knobs and get this business working?

If not, then we have to change the business to something completely different, or we go get a job, because this is not working. Hope that helps. Thanks for the call. This is the Dave Ramsey Show. Thank you. Are high health care costs getting you down? Are you confused trying to navigate your options? Do you wish you could find an affordable, biblical solution to your health care costs? Based on New Testament principles, Christian Health Care Ministries, or CHM,

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chministries.org In the lobby of Ramsey Solutions, Melrose is with us. Hi, Melrose. How are you? Hi, Dave. I'm feeling wonderful. Welcome. Where do you guys live? We live from Phoenix, Arizona.

Cool. Welcome to Nashville. And here to do a debt-free screen. Yes, we are. Very cool. And how much have you paid off? So we paid off $70,006.44 and we also cash flowed an international trip to the Philippines to visit my sick dad last year, 2017. Wow. And how long did this take you? It took me 23 months and 20 days. Good for you. And your range of income during that two-year period of time?

So between $86,000 to $106,000. Cool. And what do you do for a living? I am a cardiothoracic operating room nurse in St. Joseph. Good for you. Well done. What kind of debt was the $70,000? So their combination, it was an equitable distribution of our debts with my ex-husband.

So credit cards, timeshare, bunk beds, you name it, a HELOC, and also some of it are divorce lawyer fees. Oh, a little bit of everything. Yes. Wow, it added up. Okay, so what happened to put you on this track to get out of debt so aggressively 23 months ago? So, actually, it started early 2015 when my ex-husband and I decided we're going to end the marriage and eventually file for a divorce. I felt really the sense of defeat and failure for ending the marriage.

And we're both from the Philippines. We came here in America 2002, and we're both operating room nurses. We have, between the two of us, six figures of salary, but we also have accumulated six figures of debt. And I remember one day, I was driving down from work, and just an overwhelming panic. And I drive by a lot of billboards, but only one billboard spoke to me,

and that was your billboard. Uh-oh. So I wish I took a picture of it, but it was your face smiling. In retrospect, I think you were smirking at me. Asking me, what is wrong with you with all those debts? I was like, who is this guy? And this is the first time, too, that I've ever...

A smirking billboard. I love it. That was you. And that was the first time, too, that I Googled a person from the billboard. Wow. And so I went home, I Googled you, and I totally agreed with all your principles and your baby steps. But I disagreed at that time because why am I going to pay $149 at that time on debit or cash when I'm already deep in debt? And so I didn't buy the kit.

But then after a few weeks, I was still in panic. And so I remembered you and I said, okay, I'm just going to buy a kit. So I bought the kit. I love audio CDs, so I listened to your audio CDs. And I remembered crying in the car when I listened to the Dumping Debt CD when you were screaming, yell, or run, run, run. I was like, I really want to run. And then I cried more when I heard the roll of insurance where that dad died before he met his firstborn. But he was able to take care of his family.

And I was thinking, well, what if I die today or tomorrow? What will my kids be? And so I sat down. I rearranged our debts from smallest to largest. And then things escalated. I have to file for divorce February 2016. And then July 2016, July 16, after we met with my lawyer and we did the distribution of debts, sat down in my car after the meeting, start date July 16, 2016, end date July 16, 2018.

Because I said, by hook or by cro crook I am going to pay this debt and never again and I'll never give up. You're amazing. And I did and I paid it July 6, 2018. Ten days earlier. You're amazing. Well done. Don't set your mind to something because you

get her done. I love it. Very, very cool. And you brought the kiddos with you. What are their names and ages? Yes. This is Zofia. She's 12. And this is Zach.

He's 10. Okay. And so tell me about your shirts. Why I can, why I will, and actually I can. There were some naysayers, and sometimes I doubted myself, but for a little bit. I'm pretty, you know, bullheaded. So this is just me reminding myself and reminding the people who said I can't. Actually, I can't. And these are my whys.

They're definitely the reason why I took into the journey. Why I can and why I will. Why I can do it and why I will do it. Wow. Look at you. I love it. Wow, that's very cool. I like that a lot.

Very fun. So you have been through a really tough time, and yet here you stand on top of this mountain. Yes. You did it. It was a very emotional journey. You did it. You did it.

Yeah. You did it. You're dead free. I did it. How does it feel? I feel it's empowering, very empowering, and I'm filled with so much hope that anything now we can do. One thing about going through a divorce for almost anyone is it makes you feel like, well, it takes a little chunk of your self-esteem. It takes a little chunk of your confidence away.

Definitely. And then you turn right around and get it back by doing this. Because now you can tackle the world. Yes, and that's how I feel. You know you can now. So it filled all those holes back in, or at least some of them anyway, to remind you that you can do this, that you really can do anything you set your mind to. Very well done.

Good stuff. We got a copy of Chris Hogan's book for you, Retire Inspired. We want that to be the next chapter in your story that you become millionaires. So you had some naysayers. Who was your biggest cheerleader? Well, my biggest cheerleaders were my sisters back in the Philippines and my coworkers, actually. They knew all about my journey, and they helped me with all the overtime I have.

I have to ask them, can you give me your call so I can just have extra hours? Yeah. So, yeah, definitely some of my friends. Yes. Actually, I can. That's what you say to the naysayers. Actually, I can. Actually.

What do you tell people the secret to getting out of debt is? You did it. Actually, for me, personally, my key is sticking to my nursing roots with a big dose of Day Ramsey plan. We have this acronym called API, A-P-I-E. A is for Assessment of Signs and Symptoms of Your Debt and acknowledging that it is a problem I need to solve. And why am I doing it? It's because of my kids. P is for planning, and your plan is my plan, and you're my manual of instructions.

I have to do your baby steps. I is for intervention. A nursing plan with no action is a dead patient, so I have to do it. I actually attended smart money conferences. I won $500 from the last one. That all went to my car payment. That's good. I love it.

And E is for evaluation. So I have to see what works for me and what does not work for me. And then it's a revolving process, a pie. And I get hungry all the time when I think about it. I think your two wives watched their mom and saw that she's a world-class woman. And I think you've changed your family tree. They saw you can do anything. And you gave them a real example of how you're supposed to do life. Well done.

Thank you. Very proud of you. Thank you, Dave, for everything. Very proud of you. Thank you, Dave, for everything. Very proud of you. All right, Melrose, Sophia, and Zach from Phoenix, Arizona. $70,000 paid off in 23 months. What a story. $86,000 to $106,000 income plus cash flow to TREP.

Count it down. Let's hear a debt-free scream. Okay. Thank you, Lord. Here we go. Three, two, one. hear a debt-free scream. Okay, thank you, Lord. Here we go. Three, two, one. We're debt-free! Love it!

Woo! Touchdown, baby! Oh, man. Oh, man. People ask me all the time what the most inspiring calls I get are. People like her, man. If she doesn't inspire you, nothing does. You don't even have a heart in your chest.

You need to go get a cardiac checkup. Man. Amazing. This is the Dave Ramsey Show. Our scripture of the day, Philippians 4.8 Finally, brothers and sisters, whatever is true, whatever is noble Whatever is right, whatever is pure, whatever is lovely, whatever is admirable If anything is excellent or praiseworthy Think about such things.

Margaret Fuller said, today a reader, tomorrow a leader. Our question of the day comes from Blinds.com, the number one online retailer of custom window coverings. You get free samples, free shipping, new promos every month. You save even more. Always use the promo code the magic word remzi ronda is in california how can i avoid capital gains when i sell my investment property i don't want to buy another house or investment property you can't if you buy another investment property

you can do what's called a 1031 tax deferred exchange if you follow the rules and set up the whole process prior to the transactions. And you can roll effectively your gains into the next deal and not pay taxes on them at this time. But if you cash out or if you sell the investment property and do not buy another investment property under the guidance of a 1031 tax deferred exchange, you will pay capital gains on your gain. The interesting thing is it's usually not as much as people think it is. It's 15% only of your gain. So have your tax person actually analyze that, not advise you, but just tell you what the actual tax bill is going to be if you do sell it. And then you look up and you go, well, I hate this thing,

and I don't want to be in real estate, and so I'd rather want to pay a little bit of capital gains, and I'll have all that money, the rest of that money, sitting to do something I want to do because I don't want to do this anymore. And if that's the case, then, you know, it's not as painful as people think it is usually. Josh is with us. Josh is in Memphis, Tennessee.

Hi, Josh. How are you? Hey, Dave. Thank you for taking my call. It's great to speak with you. You too, sir. How can I help? Well, I have about four loans totaling about $59,236 from school debt from an advanced degree.

And just kind of really looking at the best advice on how to pay that off. I know that you're not a fan of the public service loan forgiveness program, and I'm just wondering maybe about the income-driven plan where the government might pay 50% of unpaid interest monthly or consolidation or just go ahead and getting down to it and knocking it out as quick as you can. The third one is the best one. You'll be out of debt faster that way. What's your income, Josh?

After taxes, I bring home about $64,000 and change. What do you do for a living? I'm a nurse practitioner at a nonprofit hospital over here. Okay, like St. Jude's then. Okay, cool. All right. Okay. I'm like St. Jude's then. Okay, cool. All right. Wonderful, wonderful place. Well, I don't know whether you can pick up extra time there or not,

but as a nurse practitioner, you're very marketable, and you can pick up other time. You can work as much as you want to work, as much as you're able to work logistically. And I would do that, and I would just try to pay this off in about two years and be done with it instead of monkeying around with some kind of a government plan. Here's the problem with the public service loan forgiveness program. It isn't happening.

Last year, 30,000 people put in an application for their loans to be forgiven. 96 people were approved. So, I mean, those aren't odds you want, you know. I don't want to wait 10 years only to find out that the government scammed me, basically. So, no, I think you just work like a crazy man, pick up as many hours as you can pick up. The great news is you're in nursing. I mean, it's just a wonderful career path because you can add hours or add, you know, pick up some ER time or whatever you need to do. I don't know.

On the short term, I mean, you can make $60,000 extra money so fast. It's unbelievable. Like in two years, you could just make 60 000 extra you know but again you'd be working a lot but just be done with this and just you know um i'm a band-aid all fast guy i mean just get it done take take the pain and get it done and um then you can get on with the rest of your life and you've got you've got a good again a great career track so you're going to be in really good shape. Thank you, Josh, for what you do at St. Jude.

Good stuff. All right, Tim is with us in Binghamton, New York. Hi, Tim. How are you? Hey, Dave. How are you doing? Better than I deserve. How can I help?

Oh, well, I have a quick question. I'm about $3,800 in debt. I'm under 25, and my car is about to go, but I'm trying to also save and pay off this debt as quick as possible. So my question is, is right now I'm putting 7% of my paycheck into my 401k. Should I dwindle that down to about one to 2% and just start throwing money at this loan. Right now I'm doing about $100 a week at it just to get it knocked down as fast as possible. But I just wanted your opinion. Sure.

And also thank you for so much. You know, through your YouTube videos and listening to your show, you've helped me avoid a lot of bad decisions like buying a crappy house and going into like a $20,000 car loan. So I really appreciate that. Cool. Good. So, well, thank you.

What do you make? What's your income? I do about $23,000 after taxes, but that's not including the overtime that I get. Yeah. What do you do? I'm a welder. Okay. So you get a lot of overtime?

For the most part. Can you get more? Oh, absolutely. Okay. So on a temporary basis, you could really load up your overtime and clean up this debt very, very quickly and then save up and get, you know, in case your car, save up your emergency fund and then save up and move up in car and cash. That would be my first three goals.

Yeah, that would be my first three goals with what I heard. Then and only then would I restart my 401K. So what I'm saying is temporarily, not forever, but maybe for a year or maybe even two, you completely stop your 401K to become completely debt-free, build your emergency fund of three to six months of expenses. And then once you've done that, then save up and pay cash for a car. And that's baby step three in 3B. And then you move to baby step four and restart your 401k.

And then you start putting 15% of your income into retirement. But at that point, you don't have any payments, and you're driving a paid-for, decent car. And these are all a really good place for you to be. And that's the direction I would tell you to move towards. So, yeah, while we have people working these baby steps, Tim, unless you're on baby step four, we're telling you to temporarily, temporarily, temporarily stop your 401k investing. Andrew is with us in Dallas, Texas. Hey, Andrew, how are you?

I'm doing well, Dave. How are you doing? Better than I deserve. What's up? Oh, not a whole lot. I recently took a new job where I'm making a good amount of money, and I'm very curious if I should start saving more or investing more. Okay.

Are you out of debt? I'm completely out of debt, yes, sir. I've paid off the whole nine yards. Good. Do you have an emergency fund of three to six months of expenses? I've got about 20 grand saved up currently. Okay. So what would you be saving for then?

That's the whole thing. My new job keeps me on the road about five days a week, so buying a house is kind of out of the question right now. So I guess the biggest question, what should I be saving for? Should I be putting more into Roth IRAs or something I can look forward to in the future? What would you recommend? Well, you're at what we call baby step four,

so you'd be starting to put 15% of your income away for retirement. Beyond that, if you wanted to start piling some money into an investment to buy a home later, that wouldn't be a bad thing. But today, it doesn't sound like you're in the market for a home. Yeah. Yeah, so it sounds like you need to get your retirement savings started. And 15% of your income going into that, take your gross income before taxes,.15, that's 15%. And then get that started in

your 401k. Do it in a Roth if you can. Match if you can. If you can't, then let's do, look at a Roth on your own. Do a Roth IRA on your own. And let's make sure you're getting that money set aside. If you'll save 15% of your income throughout your whole life into good mutual funds and a retirement plan, you'll be a millionaire, usually a multimillionaire, actually. And so we can just at least get that started. And then beyond that, if you want to save towards a house or even invest some money in a side mutual fund that's not a retirement account to use for a house later, you could do that. Well, let's get 15% started now and get you going,

get you headed in the right direction. So, hey, good question, man. Thank you for joining us. We appreciate you hanging out. That puts this hour of the Dave Ramsey Show in the books. We will be back with you before you know it. In the meantime, remember, there is ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus.

Hey, it's Kelly Daniel, associate producer and phone screener for The Dave Ramsey Show. Did you know that in 2017, Dave Ramsey Show listeners paid off $50 million of debt? That's pretty impressive. And it could be you this year. Keep listening for more inspiration.