The Ramsey Show - App - Pay Cash for Your Cars if You Want to Be Wealthy! (Hour 2)

Episode Date: January 22, 2020

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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'm Dave Ramsey, your host. Thank you for joining us. Open phones at 888-825-5225. That's 888-825-5225. Jessica is in Florida starting off this hour. Hi, Jessica.

How are you? Hi, Mr. Ramsey. I'm good. How are you doing? Better than I deserve. What's up? I'm so excited to be talking to you. First-time caller, six-month-or-so listener.

My husband and I just started the Baby Steps this January, and we are attending FPU at our local church, Idlewild Baptist Church. Shout out to them. Great. In Lutes, Florida. And so my question is, my husband and I have a 20-year age gap. I'm 25, and he's 45, and we have nothing started in retirement. We're still on baby step two

with about $22,000 left to go, but I would like to know how we should start funding retirement once that becomes an option for us. Now when you get to baby step four and you're putting 15% of your income into retirement, what is his income and what is your income? My income is $50,000, about $42,000 after taxes, and he's not working right now. He's not eligible. He actually came here with a K-1 visa when we got married last year. We're both Christians, and we haven't been able to combine our incomes yet because he's not eligible to work until another month or two. Okay. What will he be doing, and what do you estimate his income will be?

He's actually going to go into translation and interpretation. He knows seven different languages, so we want to get him certified and start doing that, so anywhere between $50,000 to $60,000, hopefully yearly. Okay. If he were to save 15% of $60,000 from age 47 to age 65, he'll be just fine. He'll have millions of dollars. That was my question. Yeah, he'll have millions of dollars. Okay.

And so so you know as if he were a single person is how we can look at it and so and of course he's going to get to 67 20 years before you do right exactly that's why i was a little yeah and by the yeah and by the way you know his income will go up over the next 20 years 22 years while your income goes up over the next 20 years, 22 years, while your income goes up over the next 22 years, hopefully. Right. Yeah, absolutely. Most people have at least basic standard of living increases as a minimum, right? Yes.

So you start out, and if he starts out at 60. We're renting. Yeah, and if he starts out at 60 and the two of you together, each of you or the total household is putting 15% of your income in. Now, if he were to make substantially less than you, I would have said let's still put more. Let's fund a Roth IRA in his name, maybe not one in your name. Fund anything we can fund. Max out stuff in his name and minimize the one that's in your name in order to put more of it in his name since he's going to need it sooner,

and still have the total be 15% of your total household income at Baby Step 4. But we just weight it heavier, the actual dollars, into his name because that way he can get to them when he turns 59 and a half 20 years before you do but you don't need to do that he's making plenty of money he's got 20 years 22 years before we worry about this and uh he's you you don't have to worry about even waiting it because of the numbers you gave me so yeah, yeah, just when you get to baby step four, make sure you're investing 15% of your household income and make sure at least half of it is going into his name. In other words, his 401K, his Roth IRAs, those kinds of things. That's what you're looking for there.

Chris is with us in New Hampshire. Hey, Chris, welcome to the Dave Ramsey Show. Thank you. How are you? Better than I deserve. What's up? Well, I've got Dave Ramsey Show. Thank you. How are you? Better than I deserve. What's up? Well, I've got a bit of a conundrum. I currently am setting, I got myself debt-free this past September, paid off all my credit cards, student loans, everything. And right now, I'm currently selling cars, and my employer gives a $300 a month vehicle allowance.

So long as you have a vehicle loan through them. And my, my father's mechanic, he has a dealer license and wants to, cause my car doesn't pass inspection. He wants to take me this summer to go purchase a vehicle at auction for like six, seven grand cash. And I don't know if I should do that or save the six to seven grand, put it aside so that I can pay the vehicle off and purchase it through my employer

and let them pay for it. Well, they're going to pay for it as long as you work there, but as soon as you don't work there anymore, you have car debt. No, I'm not going into debt with the promise of your employer paying a car allowance. Not a chance. Pay cash for your cars. Pay cash for your cars the rest of your life if you want to be wealthy. Okay.

Yeah, because I'm just starting out. I mean, I'm 25. I was very lucky. I made $55,000 last year. I'm very happy. Here's what happens, okay? Inevitably, you go buy a car based on the $300 payment that you're supposed to be receiving from them. You take out a loan, and something happens that you leave that job six months later.

Now you have a car loan. But then I take the money that I was going to go purchase at auction and just pay it off. Yeah. Best laid plans are mice and men, though. You're going to get yourself in trouble trying to play one foot left foot. And just don't do it. Just stay away from it. If you'll just stay away from debt and keep the risk low in your life and keep handling your money well,

and you've obviously got to get from making money and continue to make money and manage the money well, and don't try to do something where you're tricking something into happening. No, I'm not going to do that. Absolutely not. I would never take out a car loan, and I would never take out a car loan because the company gives you a car allowance. It is a trap. You are stepping up on the rug, and when you do, they're going to pull it, and you're going to go down the hole, down the hole, down the hole.

You do not want to have this experience. Please just pay cash for your car. Your dad's on the track. Save up, pay cash for your car. Save up and pay cash for your car. He knows how to buy cars at the auction, and he knows how to buy cars. He's a mechanic. That's the guy you need to be listening to.

Your dad's the genius in this equation. Thanks for the call, brother. Appreciate you joining us. Open phones at 888-825-5225. Lewis is on Twitter. Do you know if there's any mutual funds made up of companies, entirely of companies, that are debt-free? Not to my knowledge. I would doubt it seriously. There's a lot of debt-free companies, but I've never seen anybody bundle them together in a mutual fund. I'd be shocked to find that that happened. It might be out there, but I think I would have heard about it. This is the Dave Ramsey Show. Business leaders, right now you have the opportunity to take your business to the next level this new year.

You can start by hiring the right people to help your business grow. At Ramsey Solutions, we post on LinkedIn Jobs because they are the best at matching the right person with the right job. LinkedIn Jobs screens candidates with the skills you're looking for so you can hire smart and fast. The thing I love about LinkedIn is they look beyond just the work skills and put your job post in front of qualified candidates who match your business requirements perfectly. That's how LinkedIn makes sure your job post is seen by the people you want to hire. People with the skills, qualifications, and other interests that will help your business grow. It's no wonder a hire is made every eight seconds on LinkedIn.

So this year, set your business up to succeed. Get started today and get $50 off your first job post. Visit LinkedIn. So this year, set your business up to succeed. 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. One of the smartest things you can do with your money in the new years is protect it. That means having the right insurance in place, checking your credit report regularly, having an updated will, ID theft insurance, all that kind of stuff. And we have built a tool that will show you which of these you need to adjust, and it only takes five minutes.

We'll even email you a to-do list and tell you exactly what you should do next and next and next. This tool is called the Five-Minute Coverage Checkup Tool. It takes five minutes, and it could be the most important five minutes you spend, particularly here at the beginning of the year. Stephen took it and he said, we discovered we were paying about 30% more for our home insurance and 40% more for our auto insurance and with less coverage. If we'd done this a few years ago, we probably could have paid off our home six months sooner. Get out your phone and text the word check up to 33 789 check up to 33 789 or go to Dave Ramsey dot com slash check up that's how you do it love it Mary Beth is with us uh she's

in New North Carolina hi Mary Beth how are you I'm well. Thank you for taking my call. Sure. What's up? So I just wanted to get your perspective on this. So I'll just kind of lay out exactly what the situation is. So we own one property outright. We use that as a rental for rental income. Our second property is our primary residence, but we're looking to sell that in the coming months to buy a new house. The first house, the rental property, that's worth $165,000, and that has a $250 per month HOA.

So we don't really like that. We'd like to sell it. The second property, which is the one that we're living in now, that one is worth $265,000. We owe $100,000 left on it. The second property, which is the one that we're living in now, that one is worth $265,000. We owe $100,000 left on it. And then the new house that we're buying is $400,000. And we have $75,000 in stock from my husband's old employer. We're wondering what you would recommend on how to make the best financial decision in getting the new house. Well, the way I would answer the question is not what is the best thing today, but what is the best thing that takes you to the best place 10 years from now, 20 years from now?

What's your household income? Growth, it's $120. Okay, so you're doing real well. And how old are you two? I'm 37. He's 51. Okay, all right. So 10 years from now, we have a 61 and a 47-year-old.

Yes. What puts you in the best place 10 years from now is the way I look at this. And based on that analysis and what I know about building wealth, what I would do if I woke up in your shoes is you don't like the rental property. I would sell both of these properties and the stock, and I would pay cash, no mortgage at all, for your residence. Then I would take the fact that you don't have a house payment on a $400,000 house in North Carolina, which is a nice property. And I would

make $120,000 a year and I would pile up a big pile of cash and continue to invest aggressively for retirement. And then I would save and pay cash for a rental or two that I like and that I invested in intentionally because they gave me a good rate of return. And so I would say 10 years from now, you've got quite a bit of money in mutual funds in your retirement accounts, your 401ks, and your Roth IRAs, and you've got a couple of paid-for rentals because you've had no house payment for that 10-year period of time. No payments at all. How does the cash out on the stock thing work, though?

What's the penalty? You're going to have some – there won't be any penalties on it, but you'll have some taxes on it. You said there were stock options or there were a stock bonus? Stock options. Okay. Have the options been cashed in as he cashed them in and actually owns the stock or he just owns the options only no we own the stock okay then you will pay capital

gains at 15 on any stock on any gain over what you paid for it if you've held it for over a year and so the 75 000 there what would you think you paid for that pile of stock okay well give me a guess what do you think you paid for it um any idea what your basis in the stock is okay let's let's just pretend okay let's pretend that it's 45 is what you paid for and it's gone to 75. That gives you a $30,000 gain, which means you'd have about a $4,000 tax bill. Okay. And that's all.

So there's not a, depending on what you paid for it, you're only going to pay 15% capital gains as long as you've owned it a year on the gain over what you paid for. What you paid for it is your basis, and that's the direction to go. Good question. We appreciate you joining us. Very well done. That's what I would do. Brianna is with us. She's in Virginia.

Hey, Brianna, welcome to the Dave Ramsey Show. Hi, thanks for taking my call. Sure, what's up? So a little over a year ago, my husband and I sold our first house and moved across the country kind of in a rush. And because of the timing of things, we bought a new home here, ended up with a 30-year FHA mortgage because we didn't have enough for a 20% down payment. And our interest rate is 5.125.

Good Lord. Yeah. So actually right now, as of last week, we were looking at refinancing and started the application on that. But then we've been listening to you and kind of talked and realized we actually just want to get really serious with the Baby Steps plan. And right now we're at 30% to 33% of our take-home pay on the mortgage. And we're both pretty strongly considering the idea of just selling this house

and moving to buying something that's more affordable for the Baby Steps with your 25% 15-year mortgage guideline. What's your household income? Today's salary, like without bonuses and stuff, is $178,000. $178,000? Yes, per year. And how much bonuses do you usually get? So that would be for me, I'd say this year in the next few years would be between

um 10 to 20 000 before taxes okay and um what do you guys do for a living um i work for a tech company and he works um customer support for a startup tech company. You work for a what company? A tech company. Pet? Tech, T-E-C-H, technology. Oh, tech. I'm sorry. I can't. I'm sorry. I'm having trouble hearing. Okay. All right. Tech company.

All right. How old are you? 26. Okay. Did you calculate the 33% with bonuses or without? How old are you? 26. Okay. Did you calculate the 33% with bonuses or without? So I did a range. I think with the bonus, it's about 30%. So the lowest it was was 30 on the 30-year mortgage.

Yeah. Did you calculate? Are you taking money out of your check for 401ks and did you calculate that i am and um i know i did i believe i calculated it with that yeah okay i don't think you're as tight as you think you are you're making a lot of money you're making a couple hundred grand a year um and so if you don't like the're as tight as you think you are. You're making a lot of money. You're making a couple hundred grand a year. Yeah. So if you don't like the house and you want to move, I'm okay. But this house is not killing you.

I would refinance it and keep it. Oh, really? Yeah. You're in an upward trajectory on your income. You're fine. You're in good industries. You're not going to be making 200 you're going to be making 300 and um and yeah i'm thinking if you put your for see i'm talking

when i talk about take-home pay i don't talk about what everything i'm talking about just after taxes after proper tax withholding 25 of your take-home pay. Not after money coming out for a car payment over at the credit union. Not after money coming out for child support. Not after money coming out for 401k. Money coming out for taxes from what's left. After tax take-home pay and somewhere around 25% of that. You're going to be a little bit over that when you refinance on a 15-year and get that interest rate down, but not a ton. You're okay. You're alright. If you little bit over that when you refinance on a 15-year and get that interest rate down, but not a ton. You're okay.

You're all right. If you like the house, I'd stay. This is the Dave Ramsey Show. Let's talk about low interest rates, baby. I know right now that Churchill Mortgage can get qualified buyers into a 15-year conventional loan for well under 4% with no discount points or no hidden fees. Listen, if you're even thinking about buying a home or refinancing, do it right now. These rates are incredibly low. Here's what I'd like you to do. Take 10 minutes and call Churchill Mortgage and see what you can qualify for.

So even if you have to get creative and buy something further out of the city to get something you can afford, now's the time to make the move. That's why I'm sending you to Churchill Mortgage. I trust them to look out for you and your budget. Don't miss this opportunity. You can secure these low rates now for up to 90 days through Churchill Mortgage. Go to churchillmortgage.com or call 888-LOAN-200. That's churchillmortgage.com. NMLSconsumeraccess.org, Equal Housing Lender, 1749 Mallory Lane, Suite 100. Brentwood, Tennessee 37027. Thank you for joining us, America. Sindel is with us in Georgia.

Hi, Sindel. How are you? I'm doing well. How are you, Mr. Ramsey? Better than I deserve. What's up? My husband, after three years, I'm a little late to the game, but I'm ready to join accounts with my husband into one account together.

He's also looking into getting a house as well, which I am not comfortable with because I don't think we can afford it, but he says that we can. I have credit cards attached to my name, which is why he doesn't want to move forward with joining accounts because he doesn't want his name to be attached to credit cards. I don't have any credit card debt. It's just literally I have an excellent credit score and that's it. And I feel a little uneasy about moving forward in our financial teaching diversity steps to put on my credit cards because we're living in Savannah, and I have yet to honestly look around and see what's available in that market. For the house he's looking at purchasing, it's like a $60,000 house.

I'm not working right now he's going to school he's receiving a gi disability payment for his rating and stuff like that which is um about two thousand dollars a month um we're honestly living off of savings currently renting a home um but plan on moving to a smaller place so we could have a little bit more room in our budget. But I'm kind of stuck, and I'm not sure how to feel better about moving forward. We are looking into following your plan for Financial Peace University. So I was wondering what insight you had on that. Well, were you to follow our plan in Financial Peace University, you would get completely out of debt

and you would chop up every single credit card. You're using credit cards as an emotional security blanket and that is not healthy spiritually, emotionally, or financially. Somehow your credit score has given you comfort, which is a misnomer. All that means is you've borrowed a lot of money and paid it back. That's where your credit score came from. It doesn't mean that you have any money.

There is no comfort in a credit score, except for your ability to go deeply in debt if something happens, which would be really stupid. So I would tell you to get on the same page, get in agreement about what your long-term plans are, under what circumstances you're both going to feel good about this. In other words, if Sharon and I are looking at something, and let's say, for instance, we'll use buying a house, and she says, you know, I don't really want to do that.

I say, yeah, I do want to do that. Well, we don't do it until we solve her reason for not wanting to do it, and if we never solve that, we don't do it. We have to have unity on major financial decisions because people who do not do that do not prosper, nor do they prosper in their relationships, by the way. This sounds very obstinate that the way you are towards each other, the way the language that you used towards the way you're addressing each other. It sounds like it's very, you know, it's not like we're trying to win together. It's more like I want what I want and I want what I want. And that's not a good sign for you guys.

So I would tell you to sit down and say, okay, we both have a goal of owning a house someday. I think we can agree to that. We both have a goal of being on the same page and being in agreement. What is keeping us from doing those two things? Well, he's uncomfortable with your stupid use of the credit cards, and you're uncomfortable that he's moving towards a house that you don't feel good, like you guys are ready for right now. And so you guys got to solve those things in order to move forward. Because if you

just otherwise, you're just gonna stay at each other's throats all the time. Now we would put you on a written budget that both of you are combining your finances and working together towards your goals. The goals we teach are baby step goals. The first one is $1,000 saved. The second one is your debt free everything but your house. And the third one is finish your emergency fund of three to six months of expenses. Now, if you had no credit cards and you had a budget that you were operating on and you felt comfortable that everything was okay with a debit card because you had money, because there's money in the budget that you had a say-so over, the two of you have combined your incomes, you've combined your goals, and You had $10,000 or $15,000 sitting there for an emergency fund, and then you saved up a down payment.

Well, buying a home would be kind of a no-brainer at that point, and you'd be in a good shape to do that. The problem is you've got all these tattered ends to this conversation, and as long as those tattered ends are there, none of this is going to feel good. Your behavior with credit cards isn't going to feel good to him. His wanting to push you to buy a house you don't feel ready for, you don't feel heard, you don't feel like your vote counts in the way that y'all are handling the discussions, and you're not going to feel comfortable with that. And all of those are valid concerns. So you've got to learn to work through those things and get on the same page and work together if you

want to prosper. Hope that helps you. Blake is with us in iowa hi blake welcome to the dave ramsey show thank you dave uh first and foremost i just wanted to thank you for um what you guys do thank you good good financial advice is great but christian godley advice is even better. So I appreciate that very much. Thank you, sir. Real quick question, and I don't need to get into all the backstory necessarily, but I got a letter about 10 days ago, and I

have, we have a medical bill that ended up going to collections. I've never dealt with that before. Tried to read a few things online and whatnot on some of your websites on how to handle that. Just wanted to get your thoughts on how to approach that before I call collections.

I've already talked to the hospital. They say, hey, it's gone. Not our problem. We can't help you now. How big is the bill? A grand scheme of things. Not humongous but about 5200 so a decent chunk you have the 5200 um it would be it would be tight it drained me it drained me down to nothing do you have do you have do you owe the bill well and that's why I went to collection.

So the short of the long was it spent about a year in limbo because the insurance company was fighting with the hospital. They sent some duplicate bills, so they were sorting all that out. I was assured that everything was being taken care of, and then I was told as long as I make some kind of a payment towards this bill when they finally decided what we owed on it, they said make some kind of a payment to us, and I'll keep it active. That way it doesn't go to collections.

So I called about a month ago, and I made a $1,000 payment on it, and three weeks later I find out the remaining $5,200 went to collections. Do you actually owe the money? Was the calculation done correctly with the insurance company? You took out medical services. The insurance company paid a portion of it. Is the portion that's remaining that you actually owe $5,200? To the best that I can figure out, yes.

Okay, I would want to know because these people are very inaccurate. They are. Yeah, you need to do an audit on the account because you may find that the real bill is only $3,000. But I would audit the account and use mathematics to come to the conclusion that what the bill was minus what the insurance company paid is what you owe. Now, the way this works is the insurance company pays your bill for you. If they don't pay it, you still owe it. The fact that your insurance company didn't do what they were supposed to do does not get you off the hook. They were paying a bill for you. If they didn't pay it properly because of double billing or the hospital mishandled the paperwork or something,

then I'm going to get in there and make them do what they're supposed to do and clear as much of this as you can. But if you do all the audit and at the end of the day you owe $5,200 and you have $5,200, write them a check. You owe the money. And then it's over and then you rebuild your emergency fund. And I'm sorry that you went through a medical event that drained your savings. It's horrible. And now you'll have to rebuild it. But you owe the money.

You have the money. Pay the bill. And I wouldn't put it on payments, and I wouldn't, you know. If you have the money to pay a bill, and it is a valid bill, pay the bill. That's what we teach people to do and have for since I got on the air here and what I do. Now, if it's not a valid bill, I'll fight them to the death. And I'm going to fight them to the death to figure out doing the audit

what is really there because I've gone through plenty of audits with customers when I was doing financial coaching one-on-one where I find that the hospital has billed the same exact procedure four times and the insurance company actually paid it twice. And they're still trying to get me for two, trying to get the customer for two. And it should have already been wiped out and then some. One of my favorite parts of this show is hearing your debt-free screams. You guys are our heroes. You've kicked debt to the curb and you've saved for the future.

Now we want to celebrate with you. If you have lived like no one else and are currently in baby steps four through seven, well, it's time to enjoy some money. And the perfect place to do that is on board our first ever Live Like No One Else cruise in March. march that's right just a couple of months away but get this it's not too late to book your cabin so don't miss your chance this caribbean cruise is going to be an incredible seven days at sea on a stunning new ship with amazing experiences i'm talking all of our ramsey personalities and other world-class entertainers.

We're stopping in the Bahamas, Puerto Rico, St. Thomas, and Turks and Caicos. It's going to be an amazing, debt-free celebration designed just for you. Don't miss the boat. Head over to RamseyCruise.com today to reserve your room. Donovan is with us in Utah. Hi, Donovan. Welcome to the Dave Ramsey Show. Hey, Dave. Thanks so much for taking my call.

I really appreciate it. Sure. What's up? So about two years, just over two years ago, my wife and I went out to purchase a home and we found a piece of land about just over half an acre and we purchased it with the intent to build. Then during the building process, or not during the process, it actually never started, but as we were preparing to build, we found that we were going to be build on the land. And we actually found a house about 30 miles near the land that we had purchased. And we decided to buy that house because it was a short sale and we got a really good deal on it. And so my question for you is, what are some things that you would recommend for trying to get rid of that land?

We've had it on the market for about two years for significantly less than the tax appraisal, and we don't feel like we're getting as much interest as we feel like we should. We're not getting as many interested people in the land as we feel like we should. Tax appraisal doesn't have anything to do with market value. So you need to determine what market value is. I would get with one of our endorsed local providers and find out what some of the properties around there have sold for, and let's get the thing aggressively priced. What did you pay for it?

About $14,500, I believe, just over $14,000. $14,000? Yep, for 0.63 acres. Okay, so this is legitimately in the middle of nowhere. Yeah, it's a bit of a rural area. Yeah, you think? At that price, yeah. Yeah, but there is housing nearby. It's not that nobody lives there. Yeah, but I mean, this is not a high-demand boomtown.

0.63 acres wouldn't be going for $14,000, okay? Correct, yeah. So here's the thing. The time we currently live in, it goes for more than that, yeah. What's your household income? About $ okay all right well i don't want you to lose 14 grand but also don't want you to um sit there and pay taxes on something for 10 years because you screwed around tried to get three thousand dollars more for something that it will ever bring uh I'm guessing you're in a low demand, low activity area, and that's your biggest problem. And so you're probably going to have to address this with price. The other thing I've had a little

bit of luck with is have the first class top-notch real estate agent, call the next-door neighbors and see if someone on either side would like to add to their land for a really good deal. And maybe the people behind or one on each side, one across the street. I would, of course, scout out anybody that's building houses in the area and let them know that, you know, here's a bargain. But, I mean, my guess is that this is an area where you won't find a lot. You won't find within a five-mile radius that 100 other lots sold and yours didn't. You may find two sold. In other words, a low-activity area. And so you're going to have to become one of the ones that sells and usually

that's price and it's a high quality realtor and so check with one of our endorsed local providers and maybe they can either help you or maybe they can recommend someone in that particular area. The other thing I would do is if there's not an ELP working that area since it's a rural area, you know, who has their sign on everything out there? Because sometimes in an area like that, there's one person that really kind of owns the market, so to speak. And everywhere you look, you see their sign. And I would talk to them and say, okay, what's it take to get this thing sold? John is with us.

John's in Washington. Hi, John. Welcome to the Dave Ramsey Show Dave, thanks for taking my call We're teaching a Financial Peace University class at our church starting February Thank you, what's your church? Medical Lake Community Church Great, thank you, wonderful

I've worked for a company 24 years I'm 61, My wife's 60. Our company is closing end of March. I have about 122,500 in 401K. I make about 58,000. My wife makes 17. And we have a side business that we run April to September running, doing asphalt seal coating and striping. And we make about $45,000 net working that three days a week. I'm probably going to run that six days a week. And I should

build easily double that. We have a really good reputation and are recommended by a lot of people. So I should be able to build that and survive off of that and my wife's pay. I love it. My question is on my 401k, I can roll that to an IRA or I can cash out. I was thinking about cashing out with our seal coating business. I've got an old 83 truck that's not going to last much longer. Our company truck where I work at, I can purchase for 20 grand, pay off our pontoon boat for 14.5 and a credit card for four, and we would be debt-free except for our house, and then put 10,000 into my emergency fund. You've still not used half of the money. Right. I think, um, cause I think if I cash out, I get about 98,000 and that would leave me about 50.

I could put another 10 on my house and then I get off of my PMI and put 40,000 or 50,000 back into an investment. Um, does that sound reasonable? And where should I invest that? Go back into an IRA or just go back in the stock market or what would be a suggestion or my way up based on all of it? I would roll it to an IRA in good mutual funds, and I would pull just enough out to do most of those goals. I probably would back the $40,000 down that you're setting aside in savings,

but I'd pay off the stuff and I'd get me a cheap truck. I wouldn't spend a lot of money. You're going to pay taxes on whatever you pull out, but no penalties. And that's the only reason. I tell people never cash out a 401K to get out of debt unless it's to stop an emergency or to stop a foreclosure or a bankruptcy. If you're under 59 1⁄ a half but you're not you got no penalty so you've got access to this with just paying the taxes on it i'd leave the rest of it

in there let's just take out the minimal amount to accomplish most of the goals i probably would not fully fund the emergency fund uh with taxable money uh but i would i would pay off the the debts and i would get you a little upgrade of a truck, and then let's kick this business in the butt and get it running. I like that idea a lot. And so what I'm saying is we're not going to even use half the money. Right. And then let's build your emergency fund up out of, because that puts you at baby step three.

Let's build your emergency fund up out of cash flow from the household, and let's then be funding Roth IRAs going forward with the income that you're creating, because you need a bigger nest egg than $50,000 or $60,000. Absolutely, yeah. It's a little scary about cashing it out and doing it, but I know that if we're debt-free and then we have a truck that's going to last us longer Absolutely, yeah. It's a little scary about cashing it out and doing it alone. But I know that if we're debt-free and then we have a truck that's going to last us longer as far as the business, I can't be down. I've got one truck.

We've been doing this since 2012. I got you. I mean, I'm fine with everything. Nothing you're describing here. I mean, you don't go buy a brand-new truck. You go buy a used truck. It's a construction truck, right? So you buy something that's going to get the crap knocked out of it and then you'll be okay yeah i would do all of that uh and then be but be very diligent to work the the the reason you're doing that is to

create margin in your budget to be able to invest correct and so you've got to do that part of it otherwise it's just spent money. Got it. Yeah, so you've got to turn it around. But you've got the exact right plan. I would just dial it back a little, and I wouldn't use quite as much of the money as you're talking about. And let's leave the rest of it in the mutual fund, in an IRA, and in some mutual funds that are performing well. And then let's just start chunking with Roth IRAs. And you can do a SEP over at the business, depending on how it's structured, or a simple 401k, simple IRA over at the business.

Either one of those are fine. And you can start getting some money going into retirement pretty quickly. And that's a game plan. But I like your recovery mode after being at the same place for all those years. You're emotionally in a very good place after what you've been through here. Hey, congratulations, dude. Tough. Get after it.

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