The Ramsey Show - App - Setting Smart Boundaries with New Grandparents (Hour 1)

Episode Date: October 24, 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'm Dave Ramsey, your host. This is your show, America. Thank you for joining us. Open phones at 888-825-5225. Muhammad is with us in Chicago. Hi, Muhammad. How are you? I'm good, Dave. How are you? Better than I deserve, sir. How can I help? All right. So a little bit of backstory.

I'm 16, and I've worked all summer to try to buy a car that I've always wanted. I would be paying in all cash. And I wanted to ask if I should be slapped for having such a dumb idea to spend every penny I've got, or I should save it for something else, or put it maybe in a Roth. I just want to know, you know, where I should go with this. How much money are we talking about? About $15,000 or $16,000. Good for you. Very well done.

Thank you. Thank you. That's a very nice car for 16 years old. Yeah. I've worked a lot. You know, I don't think I've gone like a day. It's not cheesier. I don't think I've gone like a day in like three or four years without just thinking

about it and how great it would be. So what's the dream car? It's a BMW M3. it's an e46 one so okay and how are you going to maintain that puppy because your maintenance on that's pretty serious yeah uh continuing to work you know what i hear from other owners is that costs about on average 1500 to 20001,500 to $2,000 a year to just keep it in good shape and maintain it. And, you know, I'm thankful that my job right now can pay me enough to, you know, continue to fund it. Well, you picked out a very cool car, no question about it, and way cool for 16 years old, no question. So it's a fabulous automobile.

It really is. It typically is going to be a car, though, by someone who has a really, really good income, and the $1,500 to keep it running every year is a minor part of their world instead of, like, 100% of your income, you know? $1,500 is a big part of their world instead of like 100% of your income, you know? $1,500 is a big part of your world a year. It's not 100% of your income, but, I mean, it's a big part of your world at 16 years old. And, you know, I'm more concerned about that ongoing maintenance cost of this thing than I am the actual purchase. Well, I did the math, and I make about $18,000 a year right now.

That really doesn't change it, dude. I was going to say, yeah. It doesn't change it. I mean, a $1,500 maintenance fee to keep a car running, and that's if everything goes pretty good. You can drop $5,000 in it pretty quick on a Beamer. And, again, the car you're talking about is a beast of a car. It's a wonderful car.

I'm a car guy. I get why you'd want it. And if you want to spend $15,000 on a car and you worked and saved up $15,000 and you do it, I might say, well, I might spend $10,000 and keep $5,000 in the bank. That kind of runs through my head. But aside from that, that doesn't bother me near as much as you're signing up for a problem child as far as maintenance goes. I mean, that's what you're signing up for. That bothers me.

So as long as you know what you're getting into and you're willing to take it on, but you may look up one day and go, I wish I'd have known this car. And which time you sell the car. Okay. Don't let your dream turn into a nightmare. So buy it. And if you like it, drive it a while. And if it starts to be a you

know a drain on the old wallet and it's more you know you just like every time i look up i'm going to write checks for this thing which is true of a car of that type you are going to write some checks for you know a car of that type no question about it and um so i mean 1500 is the average you could write 5 000 or you could write 500. It's not going to be 1,500. That's not what it's going to work out to be. So be ready. That's what's really going to happen.

And if it gets to be a burden, turn around and sell the stupid thing. You don't have any debt on it. You're paying cash for it. It's what your dream was. You work for it. Ring the bell. Hit the goal. Do it.

If it doesn't work out, sell it. But be emotionally ready to sell it if it becomes a burden because I don't think that writing those maintenance checks is going to be as fun or as easy as you're acting like it's going to be. That's my opinion. I think I'd probably go ahead and do it, though. You work for it. You got the money. Pay cash for it.

Do it. Ding, ding. Nate's with us. Nate's in Las Vegas. Hi, Nate. How are you? Good, Dave. How are you? Betterave how are you better than i deserve what's up great thanks for all your great advice thank you i have a quick question um my wife and i have been listening to you for a few months now and the backstory um

we paid for my bachelor's i'm in school right now it's totally paid for my bachelor's. I'm in school right now. It's totally paid for. And we cash flowed her cosmetology school and we cash flowed her car. And we were sitting there with about $35,000 in savings. Good. I'm 24 and she's 20. And so I was planning on going to graduate school here in state once I finished my bachelor's. And that was going to cost about $25,000. So my oldest brother's a big fan of yours, and he suggested that we open Roth IRAs.

So we went ahead and did that. We looked up one of your financial advisors, and we maxed out her and one for her and one for me at $5,500 apiece. Well, since then, I've decided that I want to attend law school, which is a much more significant cost. So we're just wondering if that was a mistake to invest that money. The more I've listened to you, I've heard you say the best investment you can make is in yourself. And so is there anything we can do at this point to get that money. The more I've listened to you, I've heard you say the best investment you can make is in yourself. And so is there anything we can do at this point to get that money back? We wouldn't be going to law school for about 20 months is when

we would start. So we have time to save up more money, but we're sitting on about $20,000 right now. Now what's it take to go to law school? Well, I'm studying, hoping to get scholarships, but if I go and stay, it'll be about $70,000. Okay. So you're 50 shy, and you're going to get that in 20 months. Well, that's the hope. The hope.

What if you don't get it? Well, that's why I'm calling. Well, this Roth IRA doesn't solve that problem. Are we able to take the money? So if I recall correctly... No, $10,000 does not solve a $50,000 shortfall. So even if I answer your Roth question and say clean out the Roth, you've still got a major dadgum problem here,

and you're indirectly asking me to participate in the student loan scenario i think no we won't be going on student loan so how are you going to get the other 50 grand about 70 000 a year do what now currently we make about 70 000 currently and you can bank the majority of that okay well here's what i would do i would not cash out i would not cash out those roths unless i have to but you can take the money out of the Roth. Talk to your tax people and be sure, but I'm pretty sure you can take the money out of the Roth, the portion you put in, without any taxes or penalties on it. Okay, that's what I was wondering.

Yeah, I don't want you to do that today. I'd rather you just cash flow this and leave that alone. That's optimum job one, but before I borrowed money, I would do that. Yeah. Especially if you can get the $70,000 together or get $60,000 of your $70,000 together with scholarships and with saving out of your $70,000 income. Yeah, you'll be on fire then, dude. Very good. Okay, cool.

That sounds like a plan. And that's the way to do law school. Pay for it. I love it. Very well done. This is the Dave Ramsey Show. Why in the world would you trust some random guy in a cube when getting your mortgage? Do you really think he cares about your long-term money goals? Well, he doesn't.

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

They'll shoot straight with you and quickly show you the real way to save money. Call 888-LOAN-200. That's 888-LOAN-200 or visit churchillmortgage.com. This is a paid advertisement. NMLS ID 1591. NMLSconsumeraccess.org. Equal Housing Lender 761 Old Hickory Boulevard, Redwood, Tennessee 37027. Thank you for joining us, America. This is the Dave Ramsey Show. Ashley is in Los Angeles. Hi, Ashley. Welcome to the Dave Ramsey Show. Ashley is in Los Angeles. Hi, Ashley. Welcome to the Dave Ramsey Show.

Hi, Dave. Thanks for taking my call. Sure. What's up in your world? So, my husband, I don't agree. He recently came back from a deployment and said he wants a divorce and a bankruptcy. So, we are $50,000 in debt, and last year we made $35,000. Our debt breaks down to $25,000 in car, $10,000 in student loan, and $15,000 in credit card. I'm just

not sure where to go. Okay. And so what do you make? Right now I am not working. I recently moved back with family. So you're separated? Yes. Okay. And family is in Los Angeles? Yes.

Okay. And do you have children? No. Okay. So I'm guessing based on that separation that the divorce is going ahead or not? Yes, it will be. Okay. All right.

Well, whether you agree on filing for bankruptcy or not is irrelevant. He decides what he's going to do, and you decide what you're going to do if you're not married. And even if you are married, technically, because you don't file bankruptcy as a married couple. In other words, when I filed, I could have filed and Sharon not filed, except that she had signed some of the papers, too. So she got to file, too. And we had to file on all the different corporations and LLCs that we had at the time. That was 30 years ago. So in this case, he could file and you not file.

That's possible. Whose, whose name is the student loan in? Mine. Okay. See, that doesn't affect him anymore. That's your student loan. Either way. Whose name are the credit cards in?

Uh, both of us. Evenly or all are your both on all of them? We're both on all of them. Okay. Were he to file and you not file, you would be left last man standing and get to pay them. Okay. Okay. That's how that would work. Whose name is the car in?

Both of us. Who's got the car? They're two different cars, and we're both on them, and he has one and I have the other. Oh, so 25 is cars. And what's the breakdown of the 25? Break it out for me. 15 and 10. Oh, geez.

Okay. Okay, the rule on an asset that has a lien against it is this. You cannot get rid of the debt and keep the asset. Okay? So you could or he could file bankruptcy, and you can clear off the credit card debt. Student loan debt is not bankruptable. It's not going away.

You got your student loan debt. That's done. Okay? The cars, then, you cannot keep the car unless you keep the debt you can reaffirm the debt okay you following me but that's the only way you keep the car and so sometimes people don't understand bankruptcy and they think oh i can just get rid of the debt and and they clear the debt off and they give me the car free and clear. No, that's not how it works.

That's why they have a lien on the car. Okay? So they either get the car and wipe off whatever difference there is, or in the event of a bankruptcy, you re-sign for the whole debt and you keep the car. So which of the cars is yours the 15 or the 10 the 15 okay and what is that car worth do you have any idea i'd say about 10 okay all right and so you've got the ten thousand dollars in student loan debt you're going to get that either way no matter what happens here the fifteen thousand dollars in credit card debt

you understand if he files and you don't you've've got that. And then you've got the other car. Now, in the event of a divorce, what I would demand is that if he's going to keep a car, that he refinance it and get your name off of it. Okay. Or if he's filing bankruptcy, I guess he turns it in in the bankruptcy or gives it to you to sell or whatever. The car that he's driving, is it worth at least what's owed on it? Yeah, I'd say about that.

Okay. So you could just sell that car and break even. But, you know, if you can work that out in this deal. So this is a mess is what it is. And you already knew that. Okay. Yeah. So the scenarios are that, you know, what will you be making?

What kind of an income do you think you'll land into? I'm in veterinary medicine, so I would say about $13 an hour and working full-time. Are you a DVM? No. Oh, okay. No, I'm a tech. You're a tech, okay. Yes. All right. no oh no i'm a tech you're a tech okay yes all right and so um and that's in the los angeles area or are you going to go somewhere else okay all right so you're going to land on that and

then you're going to clean up your student loan debt and the credit card debt and the car debt if he walks on all of it yep okay now if he chooses not to file and fight through it, then the two of you have got to work through this together, and you're going to be... What does he make? Last year, he made about $25,000. Okay. Is he coming out of the military? No, he's still in.

He's just young in the military. Okay, yeah. He'll have no security clearance. You understand that. He understands that, I'm sure. Yeah. You file bankruptcy, your security clearance is gone. So, I mean, his chances of moving up in the military are harmed pretty dramatically if he files a bankruptcy.

But he doesn't make any money. And he just came home off a deployment, and he's lost his mind, it sounds like. Oh, my goodness. Yeah. I'm so sorry. Thank you. Yeah, he's just trying to start over,

and it's not going to be as easy for him as he wants it to be. How old is he? 27. Yeah. Yeah, okay. Well, I think you sit down with your pastor, and if you need to talk to a bankruptcy attorney to understand the things I'm talking about, that's fine. I think if he files and you don't, you've got to force him to sell the car that is in his name,

and probably we're going to sell yours too and get you a $5,000 loan for the difference, and then you work your way out of the credit card debt, the little bit of a car loan driving a beater, and the student loan debt is going to take you a little while with your income. But you can do that. It doesn't mean you have to file just because he files, mathematically or legally. Okay. Is this making sense to you?

Yes, it is. So I'm sorry you're facing all this. What a mess. Listen, if you get in the middle of it and you've got another question, you call me back. I'll help you, okay? Thank you so much, Dave. Thank you.

Chris is with us in Minneapolis. Hi, Chris. How are you? Good, Dave. How are you? Better than I deserve. What's up? I've got a question about life insurance.

I'm not very insurable. So I spoke with your guys at Zander, and, you know, they said I'm kind of borderline on whether or not I'd get a term of life insurance. I've got a wife, two kids at home, and the premium would be pretty expensive if I do get approved. So I guess my question is two parts. Do I still go for it even if it's, you know, $300, $400 a month premium? $300, $400 a month for how much coverage? For 10 times my pay million. For a million dollars.

Okay. And what is your medical problem? Basically diabetes. Okay. Yeah, that'll get you. Okay. Are you overweight? Yeah. Okay. That'll get me too. diabetes. Okay, yeah, that'll get you. Okay. Are you overweight? Yeah.

Okay. That'll get me too. Yeah, okay. Yeah, they can help you more with the diabetes if you get the weight down, which also, by the way, helps the diabetes. The doctor already told you that. You knew that, right? Oh, yeah.

I'm working on that. Good. Good for you. It's a hard struggle. So what I might do is make sure my family's not left with nothing and buy a smaller policy until we can do those two things. And let's get the weight off and get the diabetes more under control at that point and see if we can get a better rate two years from now or something. Sure. And you start to see the actual economic value of taking care of yourself in those situations in addition to just, oh, I get to live longer.

Hello. You know, so you already knew these things, right? Right. Yeah. But, I mean, what if you took half that and at least, you know, how much do you owe on your home? $280. $280. Does she work outside the home?

No, she works at home. Yeah. So if you had like $500 and that would pay off the house and put a couple hundred in her pocket, if something happened to you, that's better than a half million. It's not the proper amount, 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. Thanks for joining us, America. Lisa is with us in Washington, D.C. Hi, Lisa. How are you? Hi, Dave. How are you? Better than I deserve. What's up? Quick question. I have a plan from a retirement from a job that I had 10 years ago,

and I left the money in there. It's about $27,000, and it's growing at an interest rate of 5% annual, and I was going to leave it there until I retire. I can retire at 62, which is like in 17 years. But I did the math, and it's only going to be $63,000 by the time I turn 62. Should I take that money out and I just purchased a house for $275 with an FHA loan. So the monthly note on that is like $1,800. Should I take that money out and refinance so I can get a lower mortgage and then save the difference from the mortgage with that? No.

No? No. I would roll it to an IRA and pick out some good growth stock mutual funds that have long track records of 10 years or more. You should be able to make twice what you're making on this money. Okay. Like north of 10%. Most of my mutual funds have averaged over 12%. And you can pick mutual funds that have done that by getting with a good investment advisor that teaches you.

You have to get someone with the heart of a teacher. You don't just do something because Dave said do it or because somebody in a suit said do it. But you sit down with them. You learn how that works. And you put it in good mutual funds and do an IRA rollover from that money. The way to find somebody to help you do that, I'm not in that business, but we have a group of people we recommend. You can click on SmartVestor at DaveRamsey.com, and you put in your information.

It drops down a list of the SmartVestor pros, the people that we recommend in your area, and then you can select from among them and sit down with one of them, and they'll talk to you and teach you. And take your time. Learn about this. Get comfortable with the idea. But I think you can make a lot more on this money than you're making on it now.

And if you just pull it out, you're going to get hammered on taxes. And penalties, for that matter. Emily is with us in Detroit. Hi, Emily. Welcome to the Dave Ramsey Show. Hi, Dave. Thanks so much for taking my call. Sure. How can I help? So I have a question, not as much for myself, but for my parents. My husband and I were introduced to FPU and absolutely love it. And we are just gazelle

intense. And we have a longer plan with a whole bunch of student loans that we're just trying to wail on. And it's probably going to take a few years. And I just see my parents thinking in this horrible pit of despair, being completely broke and overwhelmed and just worsening their habits. And so I was just calling for advice on how I can influence them because they really do not like advice from their kids. And even though I'm in my 30s now, it doesn't matter. It's like I'm still a little kid. Yeah, it's called the powdered butt syndrome. Once someone has powdered your butt, they don't really want your opinion about money or sex, okay?

And so the only time that reverses is when they get really really really old and at that point yeah but um that generally doesn't happen and so you know it's like a friend that's being obstinate because you're both grown people you're grown your parents are grown and they're being obstinate about something and you just have to watch somebody that you love do self-destructive stupid things like i've got a friend that's an alcoholic and he's going to kill himself if he doesn't quit drinking i mean he's gonna and i've talked to him people have talked to him people have thumped on him we love him all that but i can't make him want to stop drinking

he has to decide that right and it's really painful to watch people you love do stupid stuff that kills themselves, you know? I mean, money-wise or anything else. So the only thing that I've had any success doing is two possible approaches. One is ask yourself if there's anyone that they look up to on the subject of business or money? Does he have a brother that he thinks is brilliant? Or do they have a friend or a pastor that they think is, they trust their judgment? And then try to get that person who does have credibility with them to speak into their life.

That's a possibility. The other possibility that probably will be more likely is for you not to say a word about their habits or their financial situation but every time you're around them tell your story mom we were so scared mom we were freaked out mom we were fighting about money all the time we were so overwhelmed i couldn't breathe my chest was getting tight and you know what we did was we got on this budget and we cut up our credit cards and we're not there yet and but man i feel so much better and i'm on the way and no one can argue with you about your story and your feelings right but don't wag your finger

at her and say now you need to do this too instead just just keep talking about what's happened in your life what's what happened with you what's your deal what's your deal and eventually they're going to say something like well i wish i could do that well you know it'd be nice it'd be nice to get control and they kind of do that debbie downer whiner party thing right the martyr thing you know and people do that all the time and as soon as they do that that's your opening jump in and go i think you can i really think you can because i felt the same way i didn't think i could do it but i think you really can i think you can it would it would be so good if they would do fpu no no no no no no you see you already you already jumped to the front of the line you got slammed down as you start saying that in that conversation, she's going to shut you down, kiddo. Yeah.

All you got to do is just talk about what FPU did for you, not for her. So what about enabling, like with your alcoholic friend, obviously you wouldn't go out for a drink with him to a bar. Nor would I give him money to drink. Right. And my parents, they're basically eating out to death like two times a day for both of them. And my dad just retired and they only have one income, but are living on two incomes. And, and so when we visit, they don't live in our, in our state. And so we go visit them. And my dad, he wants to take us out to this fancy dinner to show that he loves us and we love

him so much but i just want to scream absolutely not i'm not participating in this but i don't want to strain our relationship well just say dad you know what we're learning in our story is we're learning that we can't do that and so it makes us very uncomfortable to do that with you so let's find another way to celebrate our time at home because we don't want to go out to eat. It won't be fun for us. But don't go, Dad, you don't even take us out to eat. You're too broke. That's stupid. Because that's what you're thinking.

Well, that's what you're thinking. And I'm thinking it too, right? I agree with you. But if you say that kind of stuff, see, you've got to direct it all back to you back to you back to you back to you talk about how you feel about this not about how you feel about them or their behaviors but you're just back and talk about you used to feel the way and you turn it loose you used to feel and now i feel good i used to be freaked out now i'm not and you know of course that all needs to be the truth by the way and you know tell the truth and you know but i used to i i felt that way too personally i mean i went broke sharon and i went broke we about killed each other i know how it feels to fight

about money and um we don't fight about money anymore and have it in years uh and so how do you how do you fix that what do you do do? And you just share your story. Talk about your story. And they will start chasing you eventually to get that and go. If they ever reach out and say, well, we sure could do that. Hey, I could show you how if you want me to. I'd show you what we're doing. But don't ever turn and go deep one step deeper and go because you're stupid, because you're doing this wrong.

You go out to eat all the time. You got to stop that. Don't turn into the instructor because the instructor, you're not in a position to eat all the time. You've got to stop that. Don't turn into the instructor, because the instructor, you're not in a position to be the instructor. All you can do is lead them. If you want to go to Financial Peace University, Mom, I'll pay for it, because it changed my life, not because you're so stupid you need it. You see the difference?

And you just keep directing it back through you, through your story. That's your only shot. And just talk about what it's done for you, not what it'll do for them, and then pay for it. Pay for it for them to go through. And say, Mom, someday when you're rich, you can pay for the rest of the kids to go through or something if you want. But right now I want to do this as my gift just because of what it's done for me. And, you know, it might not work for you, but it has worked for me.

You know, and just kind of keep playing it off and making them chase it a little bit instead of begging them to be smart. Hope that helps you. Open phones at 888-825-5225. You jump in. We'll talk about your life and your money. This is the Dave Ramsey Show. We'll be right back. In the lobby of Ramsey Solutions, Kyle and Aubrey are with us from Toledo, Ohio. And you guys have a question.

What's up? Yes. Thanks for having us, Dave. We're glad to be here. question. What's up? Yes. Thanks for having us, Dave. We're glad to be here. Sure. What's up? So we're debt-free. We've been debt-free for about a year.

Good for you. How much did you pay off? About $75,000. Way to go. Yeah. Yeah. So we're moving through this. We have 15% of our income going towards retirement.

We're saving to pay cash for our house. Look at you. Yeah. Yeah. So we're excited. How old are you guys? I'm 31. My wife's 27 pay cash for our house. Look at you. Yeah, yeah. So we're excited. How old are you guys? I'm 31.

My wife's 27. Phenomenal. Yeah. So we've been asked to help teach FPU at our church. Good. And with us being younger, I'm concerned how that's going to come across, how to be humble enough, probably talking to people that are going to be older than us,

how that's going to get received. So I just was curious if you had any advice on how to take into a leadership role like that. Well, that's a neat question, and I appreciate your spirit. You paid off $75,000. Yeah. And you're debt-free, and you have an emergency fund, and you're putting 15% aside, and you're saving towards a house. Yeah.

I think you have something to say. Okay. I mean, you have what's known as proof. You're walking in it. Okay. And so I don't think you want to be abrasive, but, I mean, if you've got an old guy like me sitting there and he goes, well, you know, I don't know if I agree with all this.

You say, well, you know, you don't have to agree with it, but this is the way the class works, and when we did it, here's what happened. Sure. And when other people did it, here's what happened. And if you do have to go heavy on somebody a little bit, just blame it on me. Do you want a Dave rant? Yeah, just say Dave said. Okay.

And just go, you know, you can argue with Dave if you want to argue with Dave. But, you know, he got 5 million people out of that. I don't think you did. Sure. So, you know, whatever. You can not be that abrasive. But you know what I'm talking about. Right.

But the point is you can good guy, bad guy. They call it off of me and lean on that. And so like when Rachel Cruz first started speaking, I mean, she was 24 years old. Right. I mean, nobody cared what she thought. Sure. Now she's 28 and had three national bestsellers. And now a few people care what she does.

Right. But she just blamed it on me. Or if we're in a Christian setting, we blame it on the Bible. Okay. You know, this is what the Bible says. Right. The Bible says the borrower is slave to the lender. And you want to argue with that how?

You can't argue with God. Yeah. And the Bible, you know, Jesus said, don't build a tower without first counting the cost lest you get halfway up and you're unable to finish. And all who see you begin to mock you and say, this man began to build and was unable to finish. So you should be on a written plan is what Jesus was saying. So really, I mean, take it up with him, dude.

I mean, you know, that kind of stuff. Now, again, I'm being kind of sarcastic and bombastic. I would even be more gentle than that in a setting, in a smaller setting. The bigger the setting, the more wild I am. But, you know, when you're one-on-one, you're just gentle, and you just go, guys, I'm only 31. I don't have all the answers, but here's what we did. And, you know, if you want to have those same results, I suspect if you do the same thing we did, you'd have the same results. We didn't have those results because of our age.

We had those results because we applied proven principles. Right. You know, I mean, let's say that you were leading, let's say you were a personal trainer. And the guy you were training was 400 pounds. And he was 45 years old. But he doesn't like you telling him anything because you're 31 and you have abs. I mean, come on. Right. You know, you're the personal trainer.

You got abs. He ain't got abs. Yeah. So, I mean, he may have, he's got a keg. He doesn't have abs. You know, you just kind of, this is what you're doing my point is you have proof but but you just approach it with the same spirit you approach this question with okay and that's just a level of humility uh but you can be forceful on the principles

and on the scripture as the backup for the principles, and even on the Dave Ramsey or Dave Ramsey Organization or brand or whatever as proof of the principles and your personal life as proof of the principles. And if they don't get it through all of that because you're 31, they're just using that as an excuse. But, again, you don't want to be abrasive, but you're not going to be. You wouldn't even ask this question if you were going to be abrasive. Right. It's just not your style. It's not who you guys are. Okay. But, dude, really, you've got going to be. You wouldn't even ask this question if you were going to be a racist. Right. It's just not your style.

It's not who you guys are. Okay. But, dude, really, you've got a great story. Thank you. And just tell your story. Yeah. This is what we did.

I mean, you do what you want to do, but this is what we did. Right. And look what happened. You know, I lost 300 pounds and if you do these sit-ups and don't eat this food, this is what happens, you know.

And it's apply the principles. And so, say thank you so much for teaching the class. Oh, thank you. That is so cool that you're doing that. Yeah, I'm excited. And so, say thank you so much for teaching the class. Oh, thank you. That is so cool that you're doing that. Yeah, I'm excited. And, you know, what you'll find is interesting is that people don't look down on age when there are results.

Okay. It's when you have no proof in your life. Sure. You know, that they look down and they go, look, I got socks older than you. You know, and they won't. But you guys are, you're who they wish they had been when they were 30. Right. You know, and so they can still be that when they're 60 if they'll go do it.

Great question, man. Thanks for joining us. Thanks for coming by, and thanks for teaching the class. Haley is with us in Seattle, Washington. Hi, Haley. How are you? Hi, Dave. I'm good.

I have a question concerning a pension plan. So I have $44,000 from a previous employer in a retirement plan. And I know you talk about pulling it out and putting it or not pulling it out, but transferring it to mutual funds. So I went to a guy in our church um he works for thriving financial and he does say that he follows you um and so i um let me read i i need to move it into mutual funds well he was pretty insistent that we put this money into variable annuities rather than mutual funds and i wasn't sure why or if that was okay or if that was your following. It's not following. No, it is not following what I teach.

Okay, I didn't think so. To answer that part of the question. Variable mutual funds or variable annuities are mutual funds inside of an annuity. If you pretend like the mutual fund is an investment and the annuity is a coat that goes around the investment to keep it warm from taxes. Okay? Okay. And you pay extra for the annuity portion of this discussion. In other words, you could buy those exact same mutual funds

with less fees without the annuity coat wrapping around them. Okay? So what does the annuity coat wrapping around them. Okay? So what does the annuity coat do for you, the coat wrapping around it to keep it warm? It does the same thing the fact that it's in an IRA already does. So you're buying two coats for the same kid. Okay? Okay. You see what I'm saying?

It's already going to be kept out of the cold of taxes by the fact that you're rolling it into an IRA. Okay. And then you move it into an annuity inside of an IRA. It's redundant because you've already got the protection. Now, the only thing the annuity will give you is they'll give you some guarantees along the lines of, you know, if it goes down in value, you know, they protect you on principle, and it will give you at least 4% or 5% of income. Along the lines of, you know, if it goes down in value, you know, they protect you on principle, and it will give you at least 4% or 5% of income. But if you're invested in good mutual funds and you're young, you don't need those guarantees.

Okay. And truthfully, not trashing, thriving. I mean, thriving are friends of ours. They're good people. But I would not use that product there. And the thing you need to remember about variable annuities versus a direct mutual fund sale is there's two things going on usually. Usually if someone's trying to sell you that, it's because they don't have a securities license. They only have a life insurance license. Oh, okay.

And that's a way they can make – that's a way an insurance person can get you into mutual funds is through the variable annuity. They cannot sell mutual funds directly unless they have a securities license. The second thing that you run into, the reason you run into this, and it's less often for this, and I don't think that would be the case with Thrivant, is that they're actually doing this because the commissions on a variable annuity are about four times what they are on a regular mutual fund. Okay. And so some people sell variable annuities just because they make more on them.

And I would not accuse this particular guy of that in this situation. I mean, knowing his firm, knowing the setting that you did this, my guess is he's probably not securities licensed. That's my guess. Okay. And if he is, he's still giving you a bad recommendation. No, he did say that I can do the mutual funds exactly as you recommend in his using him. He just really kept pushing the variable annuities and asked me to go home with all the numbers,

have my husband review, and think about it. Well, I wanted to call you immediately because I knew what you were going to say already. Yeah, so now we've got another problem okay okay if this piece of advice was bad and you knew it what about the next piece of advice that you don't know is bad i you're right that's i'm going i i should have listened to my gut right away i just feel bad because he goes to our church and he's trying to you know network, that's okay. You don't have to do business with people at church. It's not necessary. I don't think I'm going to do business with this guy. I don't like his advice and I might not like it next time

and I might not understand next time. Just get a smart investor pro and move the money that way into a decent series of gross stock mutual funds, direct transfer rollover into an IRA. And that is what we recommend. Thanks for the call. This is the Dave Ramsey Show. Hey guys, this is Blake Thompson,

Chief Production Officer for the Dave Ramsey Show. Here's a tip. To keep from missing Dave's classic facial expressions to some of those calls, make sure you watch him live. Just visit DaveRamsey.com slash show each day from 2 to 5 p.m. Eastern. Enjoy.