The Ramsey Show - App - QUIT Making Yourself a Victim of Inflation Using Debt! (Hour 2)

Episode Date: May 17, 2023

Dave Ramsey & Rachel Cruze answer your questions and discuss: Should we buy a bigger house or use a HELOC to add on?" "What should I do with an old 401(k)?" from the blog: 401(k) Rollovers: Everything You Need to Know, "Pausing investing to cash flow a new HVAC?" Should we pay someone to manage our investments? Have a question for the show? Call 888-825-5225 Weekdays from 2-5pm ET Join a Personality-led FPU class. Click here! Enter The Ramsey Cash Giveaway for a chance at $3,000! https://bit.ly/TRSgvwy Shop our bestsellers during the $10 Sale! https://bit.ly/TRS10Sale Want a plan for your money? Find out where to start: https://bit.ly/3cEP4n6 Listen to all The Ramsey Network podcasts: https://bit.ly/3GxiXm6 Interested in advertising on The Ramsey Show? https://ter.li/s64ye3 Learn more about your ad choices. https://www.megaphone.fm/adchoices Ramsey Solutions Privacy Policy

Live Live from the headquarters of Ramsey Solutions, broadcasting from the pods of Moving and Storage Studios, it's the Ramsey Show, where we help people build wealth, do work that they love, and create actual amazing relationships. Rachel Cruz, number one best-selling author, co-host of Smart Money Happy Hour, a very new popular new podcast with George Camel here on the Ramsey Networks, is my co-host today. Thank you for joining us, America.

The phone number is 888-825-5225. Tyler is going to start this hour off in Austinin texas hey tyler how are you hey i'm good how are you better than i deserve what's up hey i was calling um so my wife and i were on baby steps four five and six and we are thinking about building like an ADU, a little additional dwelling in our backyard. Um, and you know, just something small to add some square footage to allow for people to stay when family comes and visits, um, maybe a little homeschooling area. And then from time to time we might Airbnb it out. Um, but I'm looking at doing that and was thinking about taking out a home equity loan for that instead of moving up in house, right. Instead of selling our house and just getting more square

footage. And cause we're kind of getting to that point. Um, we owe like one 50 right now on our mortgage. So I like where that's at and I really don't want to move in house, but I'm, I'm just having a hard time kind of justifying that home equity loan but it also seems like it might be logical how much will the addition be Tyler have you guys priced anything out well we're thinking around 75,000 okay how much you guys make a year about a hundred okay well, we'll never, you know, be in the business to tell you to take a HELOC out, to do any type of renovation or addition on your home. Anything ever.

So to be able to save up and just cash flow this thing is what the next option would look like. Sounds to me like you're about to overbuild your neighborhood. Not really. I mean, I'm a realtor as well in the area. So, I mean, you know, it should add about $100,000 worth of value to our neighborhood. We've got a few other properties in the neighborhood that have that. So your house is worth what now? About $350,000.

Okay. And $450,000 customers always come on your street? Yeah, the last couple properties that sold were right at $400,000 without an ADU. $400,000, yeah. You're about to be at the top of or over-build your neighborhood with a weird type of square footage. The square footage that you're adding has to be used for particular uses versus a home of actual square footage.

I wouldn't do this from a real estate perspective. Okay. You said you're a realtor. Have you ever shown a house with a mother-in-law apartment to people that didn't have a mother-in-law and wanted to live in it? Yeah, yeah, I do. It's difficult. I looked at one not long ago.

I considered it, and we ruled it out because we were being charged price per square foot to include the mother-in-law apartment, and we're having to dream up how I turn it into a gun closet or something. Sure. You know, it just didn't have good use, right? So it's just because I guarantee you my mother-in-law is not moving in there. So, you know, that's, you know, and I'm definitely not running an Airbnb next door to me. No, I don't think it's good square footage. I don't think it's a good investment, and I wouldn't use a HELOC.

So I got about 73 reasons why I would not do this deal. I think you're jonesing for some extra square footage for your growing family. Yeah, I would look at it in-house, Tyler. And I think that's a reasonable move, and maybe moving up in-house, as long as the house payment is no more than a fourth of your take-home pay on a 15 year fixed and move up in neighborhood move up in square footage move up in house i'm not going to be in the top of the neighborhood with weird square footage because nowadays even newer builds i feel like and i guess depending on where you are in the country but i feel like even ones that we walked through you know a few years ago,

the layout for families is different than it was in 2010. So I'm like, so you can get maybe even what you want. The new plans are much better. Yeah. So Tyler, I feel like you guys as a family, you talked about homeschool area, even an extra area for guests. Like the way that houses now are are laid out I feel like you guys could maybe get everything that you want by just moving up and home versus having to do this whole construction thing and and I'll be honest too I think some of it I would I would be as realistic

as possible Tyler because if nobody is in that the the percentage of you guys actually Airbnb-ing it out is probably low like if you have kids and life is going on you know so like even the way of you guys actually Airbnb-ing it out is probably low. Like if you have kids and life is going on, so even the way that you guys are thinking about it, are there ways that another type of home could scratch that itch another way versus building out this whole other part of your house? Chris is in Idaho Falls, Idaho. Hi, Chris.

Welcome to the Ramsey Show. Hi, Dave. Thanks for having Ramsey Show. Hi, Dave. Thanks for having my call today. Sure. How can we help? So basically, I have a 401k from a previous employer, and it's just kind of sitting there. The career I'm at now doesn't offer the same benefits as before, and so it's kind of just been sitting for like the last six months or so, and I'm not sure what I should do with it.

100% of the time that you leave a company, we recommend you take your 401k with you by rolling it in a direct transfer rollover into a traditional IRA, picking out good mutual funds, growth, growth and income, aggressive growth and international, four categories evenly spaced, and do a direct transfer rollover. To help you do every bit of that, click SmartVestor at RamseySolutions.com. Find the brokers and financial folk in your area that we recommend that have the heart of a teacher and will walk you through that.

But we take it with you, and here's the reasons we take it with you. You can choose from mutual funds, over 8,000 mutual funds in the open market for your IRA. In your old 401K, you're stuck with a 12 or 8 or whatever number of options you had at the old company. So you have more options to pick better funds. You have more control over it, and you don't forget to manage it. When it's laying back there in some place in the past, people forget to look at it. And so those are the three reasons we tell you to take it with you always. Direct transfer means you fill out the paperwork, the money goes straight into there.

You do not take a check from the old place. If they send you a check, they have to withhold 20%, and you don't have 100% to do the rollover, and you're going to end up paying taxes on that other 20 you don't have that other 20 so do a hundred percent rollover direct transfer goes directly from your old company into the ira does not come to you get a smart investor pro to help you pick all that out and get it working it just gives you a lot more control yes and this is a very common thing right now i mean the amount of people switching jobs and changing companies and everything is it feels like at an all-time high uh it's so much so for a lot of you out there listening and you have and if you have left go back and get that 401k if you didn't take it with you um because yeah it's it when it's

front of minds like you said being able to manage it and actually look at it and feel emotion towards it and to know what to do, talking to a professional, all of it, it's yours, right? It's not just hanging back there in the past where your employer just keeps it. Exactly. Exactly. And don't roll it to your new employer if they do have a 401k. Because, again, limited options, less control. You've got total control this way. There's no point in keeping it at the old place and no point in rolling it to the new place.

So really good question, Chris. I'm glad you called us. Thank you. This is The Ramsey Show. Hey, you guys. Health insurance costs are only moving one way, and that way isn't down. And if higher costs aren't enough, the wait times to see your doctor are longer, and it's harder than ever to get anything approved through the bureaucracy. So if you feel like the system is working against you,

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to take care of healthcare costs. CHM programs start as low as $98 a month. So learn more today and join at chministries.org slash budget. That's chministries.org slash budget at chministries.org slash budget. Thank you for joining us, America. Open phones at 888-825-5225. When we started this whole thing called Ramsey, the Dave Ramsey show was called The Money Game, and I had a co-host back in the day. I had two co-hosts back in the day. Now I've got a bunch of co-hosts, different ones, obviously.

But when we started this thing, the whole idea was learning how to handle money with common sense. Today we talk about careers and mental health with common sense as well, relationships with common sense with Dr. D, Dr. John Deloney, and Ken Coleman. But the whole money thing was about how to handle money well to get control of our lives and become outrageously generous and wealthy and change our family tree. That has over 30 years. We've ended up spending an inordinate amount of energy towards that end to become wealthy and generous to get people out of debt because that's the biggest blocker for them to become outrageously wealthy and outrageously generous. If you get out of debt, your most powerful wealth-building tool is your income.

If you invest $100 a month from age 25 to age 65 in a decent growth stock mutual fund, it will be $1,176,000. You retire a millionaire, 25 to 65. But you can't have a $750 F-150 payment. You can't have a student loan that's been around so long you think it's a pet, a master card, American distress, or discovered bondage. You can't just keep yourself in payments where all you do is work for the man. All you do is work for these stinking banks that have better furniture and bigger buildings

than you do. And the reason is you gave them all your stinking money. And you have no money because you gave it all to them. And that has been what we've become known for because it's the single largest blocker for folks out there. And debt has been so normalized in our culture that to even imagine

living without it is unbelievable and uh article just handed to us by our producer yesterday the new york fed released its q1 report on household debt includes a record high 17 trillion dollar $17 trillion consumer debt balance in America today. So we're doing no good. I mean, we're not even making a dent. Apparently, we're going to be in business forever. This is $17 trillion with persistent credit card debt and rising delinquency rates. It's where we're at.

And it's wild that it says in here, a typical first quarter sees credit card balances decline as people pay off what they spent over the holidays while trying to out-gift their in-laws. But for the first time ever, the New York Fed stated that tracking this for 20 years, this isn't the case this year. So for the first time instead balances remained flat over q1 suggesting that people aren't cutting back and are probably using

credit cards to finance daily spending due to the to the rising cost of pretty much everything and so it and i feel like this is where when the inflation conversation started about 18 months ago here on this show, the fear was that people were going to more than ever justify, take that margin that was there and now isn't there, and continue to live a lifestyle and make up that difference with credit cards. Yeah. But let's be real clear here. The debt is not because of inflation. The debt is because you're wussed out and refuse to cut your freaking lifestyle to offset inflation

because you're still sitting in a line of 30 cars to buy an unbelievably expensive cup of coffee. And yet I'm in debt because of inflation. No, you're in debt because you didn't cut your spending when inflation hit you. That's why you're in debt. So this is not an outside variable that is controlling your life. It's you not controlling the variables in your life and so your butt ends up in well and what sucks is you know for a lot of people though it's not this outrageous lifestyle that they're living you know that there's two incomes they have kids they

have family like they are living life the quote-unquote American standard of living that again you can we can argue the standard of living of what it is but what's difficult is when you have to go backwards nobody likes to go backwards that's why it's hard that's why it doesn't feel outrageous because it felt normal that's yes and so when you actually consider the way we all live yes it's outrageous our lifestyles are outrageous well you look at the standard you know the the square the average square footage we spend more on can i can i can i can i get a word in i don't know can you well barely barely but no but you look at the average

square footage in the 70s now average car average vacations i mean you look at all of it and it has the american lifestyle has gone up and so our expectations on what is normal is here and so for families that are living paycheck to paycheck that are doing this and sure because you know you have a 600 car loan like there there is still debt in the picture that is causing less margin but when something like inflation hits and eggs and bacon everything goes up and your grocery bill is like what and to fill up your car you're looking at the gas and you're like what that's in in the moment like that does hurt because there's not the margin for that extra hundred extra 200 extra 300 dollars that now

is going out on normal expenses so so to cut back which i agree with you, but it feels like, but what am I supposed to cut back to? We have normalized outrageous. Where I am. We've normalized outrageous. Yes. We became entitled to outrageous. And so I'm entitled to this. And so inflation then forced me to go into that, which is absolute hogwash.

You just did not. I mean, all it is is you have to address, you have to look in the mirror and go, we just buy some really stupid stuff. I mean, we really buy some stupid stuff. Most people in most countries could exist for a year off of the crap that's in your garage that you've not even seen in a year. You know? I mean, we buy some stupid stuff.

So, yes, it's normalized. It doesn't feel outrageous, but it is outrageous. So I always resist when bank rates senior industry analyst says, suggesting that people aren't cutting back and using credit cards is because of the rising cost of inflation. No, they're not cutting back to offset inflation. Duper. That's what's really going on.

And so, you know, and I get it. It's not fair. I don't like inflation. I don't want that to take your check away from you. But don't be a victim. You're not a victim. You're a victim of the person in your mirror. And the idea here's here's another plan if you think getting into debt to maintain your lifestyle is going to maintain your lifestyle

there's an end to that there's a mathematical end to that it eventually comes in but it's a boomerang comes back around smacks you in the head and says hey dummy yeah it is not a good thing families out there though because i mean i was sitting down with a family they made 80 000 and you look at you look at month to month after taxes you know and you're looking you're like Yeah, it is not a good thing. So for families out there, though, because I mean, I was sitting down with a family, they made $80,000. And you look at month to month after taxes, and you're looking, and you're like, okay, everything on their budget was not unreasonable, right? I'm like, it's a family of five. And it's like, yeah, this is what it takes to feed the family.

This is what, and granted, the kids are doing a sport. I mean, it's life. It's just, it is life. And life is expensive. And so, families out there that are listening, it's like, when you're feeling that pressure that you felt even before inflation, and then add some of this on here where life got even more expensive, you have to evaluate needs versus wants. And this is where we've blended so much that what we want has become a need. And so being able to prioritize and really look, and it's hard, but it's like, okay, what really are our needs? And we talked about the four walls, food, shelter, utilities, and transportation. And then under that,

there has to be a priority. Because in order for you to sleep at night and to actually have peace and control your money is so much worth it than some of this other stuff that's in your budget. And so cutting some of that for the time being, it's probably a reality to help you get on the other side of this. It doesn't have to be forever, but depending on the credit card and functioning in that cycle of, I'll just use the credit card to offset this stuff. It gets you into more trouble and less peace. You're killing yourself. Yep. You're killing yourself.

Dad is not your answer. This is The Ramsey Show. Rachel Cruz, Ramsey personality, is my co-host today. Thank you for joining us, America. We're so glad you're here. If you haven't heard, over 10 million people have now gone through Financial Peace University. It is the most concise, clear way to execute the wealth building steps that we have proven, not only getting out of debt and getting on a budget, but learning about insurance, learning about real estate, executing on all the different pieces and nuances of what we teach.

And you hear bits and pieces of it here on the radio. Sometimes you see a YouTube clip. And, well, Dave, I can get all your stuff out there for free. You could have got it all for free before I did it. It's called common sense. But the point is, the best thing we do around here with money is financial peace university and we show you very clearly how to not only what the lessons are the nine lessons but we also are going to walk with you with a coordinator someone to be in virtual or in person with you and a group

of people to hold you accountable and to encourage you when you're scared and struggling. And we're doing Financial Peace University right now with coordinators on virtual, in addition to thousands of locations, right this second. And all the Ramsey personalities are coordinating. Rachel, your class is shut off because you're like in the week three, right? I know. I just had my class right before I came on the air with you today. So yeah, we just finished lesson four. No, you're halfway through. Yep, we're halfway through. Okay, cool. right i know i just had my class right before came on the air with you oh yeah today so yeah we are we just finished lesson four no you're halfway so yep we're halfway through okay cool yeah very

cool and jade her class is shut down because she's at the same point you are hers is at night but dr john deloney ken coleman george camel eddie cullen all have their classes still open i think john starts monday i heard oh yep so his is coming up yep better get in there so go fpu.com or ramsey solutions.com and get go the fpu pages and jump into the ramsey personality if you're watching on youtube there's a little qr code you guys stick that back up there if you can so people can get that qr code and jump right straight to the page and yeah fpu.com and take ramsey take it with a ramsey personality if you'd like right now they'll hold you accountable and every dollar is included access to a coach is

included you do the whole puppy and you're just you it's the fastest way you can get control of this stuff it's not easy we're never going to make it easy because it's just not easy it's hard it's life change but it is worth it and this process works abby is in dallas hi abby welcome to the ramsey show hi thank you so much for taking my call sure what's up so my husband and i are in baby steps four five and six um nothing no debt except for our mortgage and we were wondering if it would be okay to pause investing for one, maybe two months while we cashflow an HVAC replacement. How much is the replacement? 11,000.

Okay, how much do you guys make a year? So our take-home pay per month is usually about 20,000. Next month, it's probably gonna be about 16,000 because I'm gonna be going on maternity leave. So it's gonna go down a little bit. Oh,20,000. Next month, it's probably going to be about $16,000 because I'm going to be going on maternity leave, so it's going to go down a little bit. Oh, well, congratulations, Abby. So baby soon? You definitely need an air conditioner.

That's pretty much where we're coming from. I'm actually three days overdue right now. Oh, my gosh. And the AC's out in Dallas. Is it out or you just need a new one? So that's the thing. It's not out, but every time it hits 90 or 100 here, it goes out. We had it repaired about 10 times over the last 12 months.

And we figure with a newborn and we have a one-year-old as well, we don't want, I mean, it's Dallas. It's going to hit 90 or a hundred in the next six weeks for sure. And we just want to get it taken care of. For sure. Listen, I completely agree that you need an air conditioner with a brand new baby. And I completely understand when you're two days overdue, why this is a big deal, but you're going about it completely the wrong way. I'm going to love you enough to tell you that. You can fix this thing one more time and take two months and save $5,000 or $6,000 a month

or three months and save $3,000 a month out of your $20,000, $16,000 income, and you can pay cash for this without stopping your investments. All right. That's what I thought you were going to say. I just wanted to double check. Do you all have, Abby, do you have an emergency fund? Yeah, we do, but we don't really consider it i mean it doesn't qualify as an emergency right we know yeah but i'm just saying if it goes out if it lays down and cannot be revived then if they bring out the paddles clear boom and they can't revive it right

then use the emergency yeah now it's an emergency or even abby if you i mean like again depending on and this is your call but if you don't feel like and like you're going to need it sooner than three months for some reason you could take a couple thousand out of the emergency fund with money you've saved do it quick you know what i'm saying like you can shuffle things around uh you have that emergency fund there so because how big is your emergency fund? $30,000. Okay. So if you took $11,000 out today, you'd have $19,000. Yeah. It's not an emergency, so I wouldn't do that. Okay?

Yeah. But this is your fallback. Yeah, if something were to happen. I'm with Rachel. I'm going to let it limp along my original suggestion, pile as much out of my income as I can, and if this thing gets weird you have a brand new baby it's it becomes an emergency if it becomes an emergency then you use part of the emergence let's say you'd say five thousand dollars well you take six out of the emergency

fund two months later you've put that back right okay yeah so you don't need to be pausing retirement for that you don't have to be pausing retirement number one but number two you don't need to be pausing retirement for that. You don't have to be pausing retirement, number one. But number two, you don't need to be worried as a mom of a newborn that we're going to be in jeopardy somehow. There's no anxiety around that because you're going to have heating and air. It's just a matter of how we go about it, whether we cash the emergency fund out or whether we save all the way through or whether we save part of the way through. And so by September, you're going to have a new heating and air.

Okay. That's the way I would look at it if I were you, because I'm just saying this is super valid in your situation. I mean, you're not in Minnesota. You're in Texas. Yes. It went out several times last summer when I had a three-month-old baby, and that was super fun. I had 82 degrees in the house. Ours went out several times last summer when i had a three-month-old baby and that was super fun having it 82 degrees in the house ours went out we had no money rachel was a brand new baby we

bought box fans those little cheap butt fans down at walmart because we didn't have the money to fix it so we survived but boy that was miserable and i gotta tell you it was 30 something years ago and my wife my wife to this day is really you know those are scars that last so i'm gonna be on your side the former me didn't do a good job with that so i've been pissed if i was mom and that was you do what now i don't know you would have been pissed i could just see dave 30 years ago sharon suck it up get some fans and i would have been like that's what we did absolutely that's what we did absolutely that's what we did but she's not a whiner so she never really had to suck it up she just like yeah this is what we got to do but it really really really is pissing me off yeah and I'm really going to

remind you for the next 35 years that we did this you know so but that that's fair that's fair I mean I've yeah but you can get those little box fan things done. Oh, don't stop it. They're like $12. Just stop it. They're like two speed, right? They're $12. Just stop it.

You know. But man, Dallas is miserable in the heat. Oh, God. The only thing worse than being in Phoenix, right? Well, at least Phoenix is dry heat. Yeah, like sticking your head in an oven, dry heat. Yeah. I love it when we go to Phoenix and they go, it's 110, but it's dry's dry heat and i'm going there's an egg on the sidewalk frying over there buddy okay yeah

at least you can breathe in it tennessee and dallas i love all of them they're great both great cities both great cities it's fun hey guys so the point being you know when when you're broke you don't have those options she She's got the emergency fund. Wouldn't it be horrible to be in that situation and have no money? Yeah. Because then she'd be calling up going, we need to borrow money for a heating and air. And then I do remember when I finally got to the other side of that

and we were at the first house we had over here in Brentwood, the one you grew up in, and that heating and air went out and I remember I act it's weird I remember this a long time ago it was in the 80s but I remember the it was $3,418 to put a new unit on I still remember the number because we had the money and you could do it and I could just pull it out and it was like this is the weirdest feeling this is not an emergency it's an inconvenience yeah yeah and And I could just pull it out. And it was like, this is the weirdest feeling. This is not an emergency. It's an inconvenience. Yep. Yep.

And now I've just got to put 3,400 bucks back in there because we're just, you know, because we were literally the thing had laid down. Yeah. We were frying in the house. Same stuff. But it was, um, it would have been, you know, six or eight years after the bankruptcy now. Yeah. And the year we're talking about with the box fans is the bankruptcy year,

the year you were born. So, wow. Imagine Rachel, little baby, crying, screaming. Oh, it's just terrible. Hot. Just terrible. Can you imagine Rachel screaming, y'all? Y'all remember that?

This is The Ramsey Show. Rachel Cruz, Ramsey personality, is my co-host today. Thank you for joining us, America. Open phones at 888-825-5225. Lindsay is in Colorado Springs. Hi, Lindsay. Welcome to the Ramsey Show. Hi, Dave and Rachel.

Hey, what's up? So my husband and I are looking for your guidance related to the cost that we're paying to our financial advisor for managing our growing retirement portfolio. How much are you paying? Well, we've had a lot of conversations related to this. So we're at 0.87% yearly, but when we look at the impact of a growing portfolio and compounding interest, we're wanting to make sure that we're being good stewards and that there's value for those fees. That's a normal managed fund or managed amount for a million-dollar account.

So as it grows above a million dollars you end up with i mean it should be it should be dissipated it should be going down um i mean if you want to shop it around but they're not ripping you off that that's a fairly standard yeah way managed accounts are how almost all brokers are handling it now they used to sell mutual funds on commission and and now they just plump them in there and manage the whole thing on a managed account uh i would say 90 something percent of our smart investor pros use that exact system uh now it could it be that you know what's the size of your portfolio megan you said oh it's only 500 000 right now oh you're fine i have 20

working years and so we were just looking at, you know, what would Dave say? You've obviously got, you know, a multimillion-dollar portfolio. Like, are we doing the best we should? Did we get the value? Is there, you know, do you want to have that managed, or is there a better way to do it? Yeah, most of our Ramsey personalities, most of the people in the building are doing that with one of

our smart investor pros exactly that way my personal portfolio was set up before that stuff came on and it's old school and so and i don't ever buy or sell i just buy and hold so there's not a lot of management to it so i've never moved it personally into that but it's not because it's a rip-off it's not because we hate it it's not that at all it's just mine was antiquated and i just there's no point in doing it because i don't do anything with it it just sits there so but i i think that you know again the most of the folks in this building a george camel i suspect a rachel cruz i don't know those kinds of folks are they're paying a managed fee with one of our SmartVestor pros,

and it's probably right at about that same amount. Now, it is fair for you to ask what the flip they're doing to earn that. You know, it's fair to go, okay, are you just sitting here looking at it? I mean, what are we getting for our 1%, you know? That's a fair question it's not like you and i don't suggest you do a bunch of buying and selling so you know i don't want there to i i really big on just buying and keeping it unless there's a real reason to get out of the fund when lindsey the the person managing it for you guys just do they sit down and look at your entire financial picture at all? Or is it just specifically just investing?

Because our Smart Investor Pro, I mean, we sit down, we look at basically everything, which is just so helpful. That's one reason I love having somebody. We sit down every January. And it's everything from investing to looking at kids college to even giving purposes of stuff that they like they just know that world some estate planning yeah they just i mean in your case actually your guy called out a really good capital things capital gains thing on a piece of real estate that yeah we had our our house when we moved we kept it for rental but then we were going to sell it and it was a capital gains thing so yeah he just like gave us information i was

like oh yeah that's right okay so it's just having somebody in your corner so you don't have that but you have but you have estate planning with attorney i mean all that stuff but i'm saying you have you have people in your corner well i've got him in my corner i mean i just don't pay him a monthly fee yeah i mean i'll pay him an annual fee because i bought the funds and paid the commissions up front asia asia right they're called and so uh and i've already paid the deal and it's just sitting there and again i haven't sold a mutual fund in probably 20 years i just buy them you know i just i might i have no activity on my account at all except purchases so it's just not a thing so but I think it's a great conversation, and I would sit down.

I will tell you that the vast majority of quality financial planner types, broker types, financial advice, people managing, helping you with your retirement accounts, those kinds of things, are set up on exactly that plan. There's a few people that still do only A shares. A lot of people will only do that plan now because of liability that they take on under the federal ERISA rules and so forth if they don't do that plan but uh but I it is a great conversation to have and say why are you worth one percent why would I not just

buy this on my own and not give you 0.87 or one or whatever it is, right? But you're not out of line. You're not getting ripped off. I wouldn't be panicking about it, but you're very wise to start at, to be always asking these questions. A, you need to understand your investments, and B, you don't need to understand anything.

You're being charged, and what are you getting for what you're being charged? I think those are wonderful. Now, I will tell you this, everybody out there, not you lindsey because i don't think that's going on with you but there again there's these all there's these little nuanced pieces of research studies that are done the people that do not have a broker like that in their corner are unbelievably more likely to pull their money out every time there's bad news and to put pull their money at exactly the wrong time and buy at exactly the wrong time trying to time the market so if you never pull your money out it's's worth.87 just to keep you from jumping off the cliff, just to talk you off the ledge,

just to talk you off the ledge. Because you're having a broker in your corner goes, don't do that. Here's the historical data. Here's what happens. You know, every year following a two-year downturn, except one since the 1930s, we've seen a huge uptick.'ve had two down years we're going to see a huge uptick historically coming up most people don't know that but if you've studied the charts and you know what the mutual fund returns are you know what stock market returns

are you know that and you're a broker and you're advising people you can talk them off the ledge and go you're getting ready to get out at exactly the wrong time i know it's been flat i know it's been sucky we've you know we're in an inflationary biden economy it's horrible out there life's not good i get that but just hang on the sun is going to come up tomorrow and they talk you off that ledge and you're getting ready to bail at exactly the wrong time yep and and so that that having that broker in your corner to bounce stuff off of or occasionally bring you something emotion out of it yeah yeah bring you a different idea or a different way of looking at something not constantly buying and selling the account though that you we don't want to do that but just to just to have somebody there that's walking with

you and the you know got your best interest at heart because they make money only when you do um and and you know that that's if the thing if the whole thing goes down in value they make less so that that's not a bad way to incentivize them but you know it's it is a great thing back to her original point to ask and understand always know why you're being charged and what you're getting for what you're being charged love it good stuff so yeah the um divert being diversified spreading your portions to seven yes to eight not having all your money in one stock not buying and selling hold on no one gets hurt on a roller coaster except those that jump off in the middle of the ride having someone in your corner like a smart investor pro to teach you to meet with you to

review your stuff uh making sure and here's the key always have somebody with the heart of a teacher always have someone that's where you know what's going on yeah because there are i mean like any industry in every industry there's good people and there's bad people and so you're gonna feel like oh i don't feel right with this person i don't really like them i don't you know if you get that feeling then don't use them so right and i feel like that sometimes this industry can be sly like i feel like the stereotype sometimes it's like oh i don't want to use someone because I don't want to pay them. And they're going to try to get me.

There's plenty of good ones. Yes. Yes. More good ones than bad ones. Yes. But if they got the heart of a salesman, you'll feel like you need a shower after you met with them. Right. And so, no, that's not.

You're looking for someone with the heart of a teacher. Someone to walk you through, teach you, teach you. And you'll know they have the heart of a teacher if you learn something every time you meet with them. You should know something more than you knew before. Every time you meet teach you. And you'll know they have the heart of a teacher if you learn something every time you meet with them. You should know something more than you knew before every time you meet with them. They're a teacher then. And they're wanting you to understand your own stuff because you're responsible for it, not them. My man lost all my money. No, you lost all your money because you trusted a goober.

It's your fault. You didn't understand what was going on. This is The Ramsey Show. Hey, it's Rachel Cruz. If you like what you heard in this episode and want to know more about getting started on the Ramsey baby steps, go to RamseySolutions.com and click the Get Started button. We'll help you figure out the best next step for you

based on your specific situation. That's ramsaysolutions.com and click Get Started.