The Ramsey Show - App - Short-Term Pain Equals Long-Term Gain (Hour 1)

Episode Date: July 9, 2019

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Live from the headquarters of Ramsey Solutions, broadcasting from the Dollar Rental Car 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, America. Open phones at 888-825-5225. That's 888-825-5225. Andrea starts us off this hour in Washington, D.C. Hi, Andrea. Welcome to The Dave Ramsey Show. Thanks, Dave. Thanks for taking my call. Sure. What's up? Hi. I had an inherited IRA from my mother's death about three or four years ago. From the IRA, I was supposed to take RMDs out of it, but I didn't find that out until I was after the time frame when you were supposed to start.

So now I have to take the entire IRA out by the end of next year. So I was wondering how I should do that. Should I take it incrementally over that two years, or should I go ahead and just empty it all out and have them take the taxes out? I'm not familiar with the regulation that says if you miss your RMDs that it requires you to cash the whole thing out. Is that what you've been told? Based on the IRS regulations, and I talked to a smart investor pro,

that was the information that they, how they understood it and how I understood it as well. Okay. If you don't do it by like a year after the death of the person that you inherited from. So you don't really have any options. You've got to cash it out, right? Correct. But I just wanted to know, should I do it over time to save on the tax, or should I just go ahead and take it all out, dump it all out now, and then reinvest it?

I'm sorry. I thought you told me they required you to dump it all out because you didn't do RMDs. But I have to dump it all out by the end of next year. Oh, well, it doesn't matter. I mean, the end of 2020? Yes. Oh, okay. So you could take some one year and some the next

if you want to look at some tax planning on that in terms of if it causes a bracket creep or something, you might want to split it into two years. Yeah, I think the total amount will push me up a bracket. Okay. So you could look at that and go. But basically, probably what I would do is just do December and January. Okay.

And forget it, because there's no investment benefit to this. It's just a matter of how much tax you're going to pay. Got it. So do the tax calculation both ways, doing it all in this year, or if you split it and it kept you from bracket creeping, how much would that save you? Is it worth screwing with? How much was in the account?

About $80,000. Okay. It's probably not going to matter much. I mean, we might be having a $1,000 discussion or something here. Okay. But, you know, what is your household income? $97,000. Okay.

Yeah, I mean, just have your tax pro run it both ways and say if I take it half and half or if I take whatever distribution in December and the rest of it in January, whether it's small or large in one year or half and half, whatever it is. Is there a way I can save a little on taxes doing that? But that would be the only reason to put it off is just to keep bracket creep down. And then just make sure you start investing it or using it wherever you are in your baby steps and be wise with the money from that point forward. So, hey, good question.

Patrick's with us in Miami. Hi, Patrick. Welcome to the Dave Ramsey Show. Hey, Dave. Thanks for taking my call. Sure. What's up? So I just graduated about a year ago.

Got a job making 40K and I'm trying to decide between paying down my loans, which is $30,000 at 4%, or investing in retirement and maxing out a Roth IRA, because I've been reading about the power of compounding, and I'm not sure if it's worth it to pay down my debt as soon as possible when it could be more worth it to just max out those IRAs. Yeah. Well, what you're dealing with here is a theory that doesn't work in real life. Okay. And here's what I mean.

The theory is that you're making money on this spread by not paying off a 4% loan and putting it in mutual funds to make more, you're making money. The actual facts are that when we did the largest study on millionaires we found zero millionaires out of 10 167 of them that we surveyed zero of them that kept debt around because they made money on debt right and so millionaires just don't do what you're talking about so if you want to be a millionaire you don't do what you're talking about. So if you want to be a millionaire, you don't do what you're talking about.

You pay off the student loan as fast as you possibly can, and so that you can take advantage of the power of compound interest. So you're what, 24? Yep. Cool. What's your degree in? Finance, actually. Good, good, which is making you use your math skills to look at this equation, and that's smart to do. The thing you're leaving off is risk, and debt inherent in it is risk, and this feeling, this malaise that the student loan is hanging around your neck, you know,

and there's a monster in the closet, and there's just a thing that affects the math. But it's hard to put math to it that when you're free of Sally May, you have a higher tendency to prosper. That's what all the data points tell us from the studies. And so, yeah, you definitely want to clear the student loan as fast as you possibly can and then avoid debt completely. And that is your shortest route to wealth. Hey, thanks for calling in. Open phones at 888-825-5225. Jordan's in Daytona Beach.

Hey, Jordan, welcome to the Dave Ramsey Show. Hey, Dave, how are you today? Better than I deserve. What's up? Hey, man. So we are going through FPU, my wife and I, and currently we're on baby step two. We had $35,000 in debt and we just put about $5,000 on that. The company my wife works for, they offer her the ability to buy the company stock at 15% off the 52-week low. And this basically comes up every August where she can put up to 10% of her income into that.

So my question for you is, currently she's going to have about $20,000 in there as of August. And I was just wondering, we're estimating it's going to take us about 10 months to pay off the $30,000 in debt. And I was wondering if you would suggest that we cash that out and put the $20,000 towards the $30,000? Absolutely. I'd do it today. Okay. As soon as you possibly can. Today, as fast as you can get the order in.

And here's the thing. The stock deal they're offering her is nothing special. Most companies that are publicly traded have that deal. And it's always 15% off. And if you study 52-week high, 52-week low on that stock, you're going to likely see a volatility in excess of 15%. Gotcha. Meaning that it's really not a bargain. It's not that big a deal. So if you want to buy some of that company stock, never let it

later on in baby step four or really baby step seven is where you'd be doing it. But if you're going to do that, do not allow single stocks to become more than 10% of your net worth because you have too much tied up in things that are volatile then. And so I don't own a single, single stock. I don't like the risk associated with them. And even if I was buying it at a 15% discount, I don't own a single, single stock. So if I were in your shoes, I'd cash it out immediately, and I wouldn't do any more investing into that plan until you're ready step seven, and then don't let it be more than 10% of your net worth.

This is the Dave Ramsey Show. I got a call the other day, and I thought it was worth talking about again. It was from a wife looking for life insurance for her family. She asked why I only recommend term life insurance instead of cash value plans like whole life. I usually explain how you overpay for coverage, earn a horrible rate of interest, and don't get your cash value when you die. But this time, I just had her go straight to Zander.com and get a rate. And then we compared that rate to the whole life plan, and she immediately saw the huge savings. She realized all the things she could do with that money,

like paying down debt, investing in a smarter way. That made it real for her. It makes no sense to buy or keep a cash value plan when there are smarter, less expensive ways to protect your family. That's why I suggest that everyone go to Zander.com or call them at 800-356-4282 and get a free quote. That's Zander.com or 800 your family, your co-workers. Right now, about 8 out of 10 of your friends can't cover a basic emergency. Your neighbors, your family, your co-workers.

Most people in America make good money, but they live paycheck to paycheck. And they need the plan to win with their money. They need someone to guide them through the plan. The plan is Financial Peace University, and the guide is a Financial Peace University coordinator. 50,000 churches have now taught almost 6 million people Financial Peace University. And the coordinators are the heart and soul of that. They're the ones that organize the local class that you go to, and they are heroes to all of us at Ramsey. We absolutely love them.

This week we're celebrating the Financial Peace University coordinators by talking to a few of them. Diane is with me in Orange County. Hey, Diane, how are you? I'm doing well, Dave. Thanks for having me on. Well, thank you, and thank you for leading a financial peace class. I appreciate it.

How many have you led? Well, actually, my first one is going to be in September, and I'm really excited about it. Cool. So you're a brand-new coordinator. Very neat. Brand new. Well, tell me your story. What step are you on, and how did you get there?

Well, I am, well, my story's a little unusual. I'm on Baby Step 7, and it's been kind of a lifelong thing. I've never been in debt. I've actually never had to go through a program like FPU. I, you know, did things well from, you know, the beginning. Um, but one thing that really, um, has kind of spurred me on to want to help other people is, you know, you always talk about how important life insurance is when, um, uh, 17 years ago, my husband passed away when my children were really little. And fortunately, we had enough life insurance.

And I was able to keep my house. I was able to continue to be a stay-at-home mom. How old were you? I was 40. How old was he? Yeah, 45. What happened? Oh, it's a long story.

Okay. But he was mentally ill. Oh, I'm sorry. And he took his own life. I'm sorry. Yeah. So there was a, you know, of course, it was a very difficult time. Sure.

But the financial part of it was not difficult. Uh-huh. Because we had the life insurance set up. Uh-huh. not difficult because we have the life insurance set up. So I volunteer with a couple of different organizations working with financial education and that sort of thing. And one of them, every year I do what I call my public service announcement, and I tell them a little bit about my story and why you need to have life insurance. So that's kind of been my toolbox.

Absolutely, yeah. And who can argue with you, you know, at that point, it's like my pastor used to say, um, you know, the, a man with an opinion is not at the mercy of a man with an experience is not at the mercy of a man with an opinion. You've had an experience. And so you can, you can speak from, uh, from deep pain and, uh, and you've seen the results of having the plan done right so that your family was okay. My goodness. Right. Wow.

Right. Yes. Very, very cool. So you decided to lead a financial peace class now for the first time as part of your quest to get up on the soapbox then. Well, yeah, partly that, and also with some volunteer work that i do i run into a lot of young men and women and young families who are struggling with their finances and a lot of them are living paycheck to paycheck with a lot of debt and they don't know what to do they don't know how to get out of the situation or even sometimes that they should get out of that

situation they don't even know it's a situation sometimes. Yeah, you're right. Right. They just, like you always say, they think it's normal, and they don't think there's anything wrong with it. So I want to show people that they don't have to keep living that way with all of the stress that that creates for them and their families. Wow. Very cool. Good for you.

Well, you're going to love doing this. You're going to get to watch their body language change in front of you through the nine weeks as the debt and the stress of handling money melts away. It's pretty fun to do. Yeah, I'm looking forward to it. Very, very cool. Well, was it easy to become a coordinator? Did we give you a lot of hassle? Was there a lot of hoops to jump?

Not on your end, no. It was trying to get my church to agree to start this up again. But yeah, working with people on your end, Josh has been great. Any question I've had, he's been able to answer for me. So yeah, you guys are great. Okay, great. Well, thank you. I'm glad they served you well. Good stuff. And thanks for leading the class and taking a minute to talk to us, Diane. Well, thank you.

Sure. Have a great day. Diane, one of our Financial Peace University coordinators. At any given time, there's about 10,000 to 12,000 of these classes operating all over the place. And so she's just one of the people that decided to do it this year. And so thank you for that uh right now we are giving away free financial peace university leader materials to the first 125 people that call today your leader materials include the coordinator guide all of the dvds to teach the class, me teaching the class all the way through, Rachel Hogan,

the promotional materials, access to every dollar plus, everything you need to help people get out of debt. All you've got to do to sign up and lead a class for free is to agree to start one this August or September. The first 125 people who call are going to get to do this for free, the free leader kit. That's about a $400 item each, okay? So call us and sign up. Lead a class in August or September.

To get the free leadership materials, here's the phone number. Are you ready? 877-378-2667. 877-378-2667. There's only 125 of these leader material free ones left for people that want to start a class this August, this September. We would love to have the help. We appreciate it. We've got a lot of people wanting to get in classes, and if you'll help us get one started, it would be absolutely amazing. Brian is with us in Charlotte, North Carolina.

Hi, Brian. Welcome to the Dave Ramsey Show. Hey, Dave. Huge, huge fan. Thanks so much for taking my call. Certainly. How can I help? So my wife and I, we are on baby steps, Dave. Huge, huge fan. Thanks so much for taking my call. Certainly. How can I help? So my wife and I, we are on Baby Steps 2.

We have paid off about $45,000 of debt, primarily student loans. But we're looking to make a move from Charlotte to the Nashville area. And as you know, living there, the market there is super high. And so our question is, do we go ahead and pay for a home, or do we rent at a very high rate as well? Because even looking at the rent, some of the rent there is $2,000 a month for a house that we would need with three kiddos, a dog, and a cat, and all that stuff. So I'm just curious, like, what would you suggest?

I never suggest buying a home while you're in baby step two. Okay. And so you rent. And the trick is, it's just where you're going to rent. Now, if you're trying to rent in a premium neighborhood, you're going to pay that. But there's lots of bedroom communities around Nashville that the rent would be nowhere near that. Okay. Probably half of that for a home.

Okay. And, you know, you've got a 25- or 30-minute commute, those kinds of things, but you step out of county outside of Davidson County, the county that Nashville's in, and your rent's going to change substantially. Okay. And so you've just got to think that through. I mean, you may not be in one of the re-gentrified, yuppie, hippie neighborhoods, hipster neighborhoods, you know, things that they are hot as a firecracker.

And sometimes you're, you know, I own a couple pieces of rental property down there. It's ridiculous what I'm able to rent that stuff for. It's just nuts. It's crazy, yeah. Yeah. Yeah, it's crazy. So we're more looking in the more looking at the Hendersonville, Goodlettsville area.

Yeah, you can beat the $2,000 number if you're up in those areas. Goodlettsville's pretty far out and so forth. What are you moving to Nashville for? Why are you coming? To take a job at a church as a pastor.

Up in that area. Yes, sir. Okay, good, yeah. Yeah, if you'll slip outside of Hendersonville more towards Goodlettsville, you'll see the prices start to drop out there. And it's a beautiful area out there around the lake and, you know, wonderful, wonderful place. So welcome to town. Good to have you, Pastor. This is The Dave Ramsey Show. We've been voted one of the best places to work in Nashville 11 times.

You want to know how we do it? Well, our team has been using LinkedIn jobs for years to find the best people from all over the country to come and help us change lives. Think about it. LinkedIn has more than 600 million active members. I'm talking about people who come to LinkedIn to make connections, grow their careers, and discover new job opportunities. In fact, 90% of LinkedIn users are open to new opportunities, but not actively scanning job boards. This means LinkedIn Jobs gives you access to an entirely different demographic.

Don't wait. One hire can change the direction of your company. Post a job today at LinkedIn.com slash Ramsey and get $50 off your first job post. That's linkedin.com. Terms and conditions apply. Daniel and Judith are with us in San Antonio, Texas. I see on my screen you guys are debt-free. Congratulations. Thanks, Dave.

Hi, Dave. Thank you. Congratulations. How much have you paid off? We've paid off $ four thousand dollars in uh 28 months dave good for you guys and your range of income during that time about 105 and then we ended up at about 155 good what do you guys do for a living so i work for a three-letter government agency so she can't say much and then i work um well i did work in the u.s merchant

marine as a as a marine engineer and then i transitioned to shoreside to doing the same side type of thing but for oil and gas major cool well thank you for your service both of you excellent well done well done well done so what kind of debt was the $84,000? Oh, Dave, it was a lot of stupid. It was three credit cards, two small student loans, two vehicles, a military buyback, appliances, two cell phones, and, yeah, just a lot of stupid. Man, y'all just did everything. Yeah. Well, we didn't count the truck that we sold before we started the journey wow amazing so what happened 28 months ago that lit the fuse on you guys because you blew up man this is awesome david it actually happened a few months before those 28

months i was pregnant with our daughter and we had actually struggled to get pregnant we had a lot had four miscarriages before I got pregnant with my daughter. And when they finally found out what was causing it, the medication to keep the baby alive, my daughter, was $1,200 a month. And when I went to go pay for it at the pharmacy, we couldn't afford it. I remember we had maxed out credit cards, and I tried to coupon it as much as I could, and I still don't remember how we even paid for it, but I needed to take that medicine for three months just to make sure that my baby would stay alive.

And I just thought, I can't do this anymore. And if that wasn't enough, two months after that, Danny lost his job. The shipping contract that he was on fell through. And if that wasn't enough, the shipping contract couldn't get picked up right away. And we had to cash out my Roth IRA that I had been putting money into since I was 18. And I just looked at him and I said, we cannot do this. Our children cannot experience this anymore. We need to change something. And a couple of months later, we started FPU University and we were on fire and just kept going from there. Wow. Wow.

Well, sometimes it takes a little cold water in the face to go, I think something needs to change. Yeah, like three times. So sometimes, Dave, it wasn't that we hadn't tried talking about it before. It was that it took that kind of circumstance to really hear the conversation. Yeah, you get sick and tired of being sick and tired. Right.

Before, it would turn into fights, and we didn't like fighting over money anymore. So you just avoid talking about it. That's what most people do, but not anymore. You guys are game on. Very good. Proud of you. So what do you tell people the key to getting out of debt is?

Just keep on doing it. It's discipline and motivation. Think about why you're doing it and just keep on doing it. Well, you had plenty of whys, didn't you? We had plenty of whys, especially the two little ones in front of us. And we just kept reminding ourselves it was short-term pain for long-term gain. And the budget really helped too. Every month, we had a little date on our calendar on a Saturday when the kids were napping. And we just sat down and we just went over everything. And it was so eye-opening when we ran out of money in a certain category,

and I was like, oh, my gosh, that's it. That's it, and we're committed. We're not pulling money from any other fund. That's it. We've got to really make this work. That's great. Congratulations. Who were your biggest cheerleaders?

Definitely our immediate families. They supported us a lot. They got on the journey, too, when they saw us going on it. And Sarah and Paul Remert, they're the ones who introduced us to FPU University. And Tanya and Darren Kittleson, they supported us along the way, especially when I thought my husband was going to go out and buy a truck multiple times during the debt-free journey. Uh-oh. Well, she was working on getting me upset, so I threatened.

Let's just say it worked both. It helped her and it helped me get back and stay the course. I love it. Well, congratulations, you guys. We're very, very proud of you. Congratulations. Well done. So on to the next baby step and on to millionaire status as your next chapter in your story.

We're going to send you a copy of Chris Hogan's book, Everyday Millionaires, and show you how to take the next steps, okay? Okay. Thank you. Thank you, Dave. Cool. Very well done. Daniel and Judith, San Antonio, Texas, $84,000 paid off in 28 months, making $105,000 to $155,000. Count it down. Let's hear a155,000. Count it down.

Let's hear a debt-free scream. Countdown. Countdown. Let's go. Three, two, one. Debt-free! Way to go, you guys. Very well done.

Most excellent. Man, I love it. That is awesomeness right there. Very cool. Open phones at 888-825-5225. Jonathan is with us in Fort Worth, Texas. Hey, Jonathan, how are you? Hey, doing pretty good.

Super excited to be on your show today, and thank you so much for taking my call. Well, thank you. How can I help? Yeah, so my wife and I are on baby step number four, about to begin the investing phase, and we are looking into a company. I don't know if you're familiar with them or not. Guy Stone Financial, based here in Dallas, one of the largest faith-based investing firms in the country, or at least that's what's on their literature.

And so just kind of wanted to get your opinion, thoughts on going with a faith-based company that screens their mutual funds to make sure that people's money are going into funds that are equal with their beliefs and values, as opposed to just going with any old investing firm. Gotcha. Okay. Well, there's a lot of different angles to discuss this and look at it for a person of faith, and it's a really, really good question and very wise of you to consider this option.

I don't know anything about that particular company. The first company to do, there was a company for a while that would grade mutual funds as a red, yellow, or green light, green light being the cleanest, obviously, in terms of the mutual fund containing companies in it that, in other words, it's buying stock in companies that is contrary to typical evangelical Christian values. And so that rating service was around for a while. I don't even think it's still open. It may be out there floating around.

I haven't looked at it in a while. The original company that did it the very first time that's done it the longest and done it with scale is the Timothy Fund out of Atlanta. It's an actual mutual fund. And it is not just, you know, an independent firm in some city that's trying to find funds. They formed a fund with that purpose in mind. And so you can check that out as well. Also, you can check out investment advisors that are kingdom advisors.

There's an association of Christian financial planners called the Kingdom Advisors. I speak to that group fairly often. It was formed originally by Ron Blue and some others that are friends of mine. Really good folks. A lot of our SmartVestor pros are kingdom advisors. But here's the thing uh when you buy um something at kroger which also has playboy on the stand you're not supporting playboy because you bought water or butter at kroger okay right right and uh when you buy a you if you buy a share of stock on the stock

market in uh i'll just make up something rj reynolds okay tobacco company okay if you bought a share of stock on the stock market rj reynolds in no way profits from that transaction. It's like you saying, I don't like Chevrolet, so I don't buy used Chevrolets from Dave Ramsey who's selling a Chevrolet. So you're not really causing those companies to profit when you invest in mutual funds that have some of the money invested there. It is a true statement to say you might be profiting from some of their activities that you wouldn't agree with that would be true and and but it's really difficult to get that nuanced in your life

and still exist so i haven't spent a lot of my personal time worrying about that but if you are that's a good thing and that's a couple ideas that you could check out Thank you for joining us, America. We're glad you're here. Luke is in Jackson, Tennessee. Hi, Luke. Welcome to the Dave Ramsey Show. Hi, Dave. Thank you for helping me out today.

I appreciate it. Sure. Having a little trouble hearing you. Can you speak directly into your phone? Yes, sir. Is that better? Yes, sir. Much better.

How can I help? Okay. Yes, sir. Is that better? Yes, sir. Much better. How can I help? I'm 48, and my wife, we were married for 26 years. She passed away just a couple months ago. And I've used the proceeds from her life insurance policy to clear our debt, including the house. And I've got about $150,000 left, which part of that, about $30,000, I was planning to use to fund an emergency fund. I've got two kids in college, they're twins, and should graduate this next year,

one in high school that should graduate next year as well from high school and on to college. And I was just wondering what would be the best thing to do, the best place to park. Some of that money, I've got about $50,000 in retirement right now, so not a lot for my age. My goodness, I'm sorry you've been through this. What happened to her? She had a heart attack. She was just walking. She was doing a 5K and didn't really have any symptoms prior to it. Was doing great during the race and very upbeat. And she decided to go to run, to run across the finish line. And she took about three steps and dropped.

Wow. She was gone. How old was she? 48. Wow. I'm sorry. What a deal. Amazing. Yeah.

All right. Well, you've done good things. A couple things always come to mind in these situations. If something happened to Sharon, I wouldn't be able to breathe for a while. And for two months, you've been trying to breathe right right and so it's not a good time to make major financial decisions but you haven't made any major ones especially that are wrong i mean you moved some pretty serious money around here and you're 100 debt free you've got 150 left over and your plan is to set aside 30 of that for an emergency funds that leaves you 120 did i understand you right yes sir that's right okay and then you've got college facing you and retirement someday uh what do you make a year about while you're in the fog of grief.

I tell people wait six months, maybe even a year before you make big-time decisions on stuff. Like I want to open a business. I've always wanted to open a business. I'm going to use this money to do that this is not the time to decide that you know some simple some simple investing or simple debt payoff there's no it's kind of a no-brainer you can do that and not have any risk but i just don't want you to do things until the until the fog clears a little bit that are that are um outside the normal track of things. So what I would do is say, I think your emergency fund is proper, and I think we just take some of this money and earmark it for college

and whatever we need for that. And so let's start looking at a budget for your graduating senior and what you want to spend on their college. And you say, okay, I've got $120,000 left. It's going to take 60 000 i just made that number up to put junior through to put this last one through school um i'm going to earmark that it's like i earmarked the 30 000 over there for the emergency fund um you could set that over in a mutual fund if you want to with a smart vestor pro and then that leaves you $60,000 discretionary.

And I always recommend anytime you've got money that's discretionary like that, what am I going to start doing with it? Baby step seven, which is where you are, that we just remember there's three things to do with money. Enjoy it, give it, and invest it. And so I'm probably going to do a little bit of all three with that remaining 60. I might do something in her memory at your church or something. It doesn't have to be a big deal, but $10,000 or something out of that 60. I'm making up a number you can pray about and decide for yourself. You might take the three kids in in the spring and uh at spring break

and and you know spend a little money on a really nice vacation that's been a hard time for your family yes sir it'd be okay to spend some money on them you know uh and then the rest of it i'm probably going to start parking in roth iras and good mutual funds and that kind of stuff so it's kind of enjoy some of it be generous with some of it and invest some of it and that kind of stuff. So it's kind of enjoy some of it, be generous with some of it, and invest some of it. And the sum of it is you decide what portions out of that remaining 60. But I think you probably need to set aside something, whether it's 60 or 40 or whatever it is, for the senior in high school to go through college. If you just kind of got that done, then the only thing left for you to do with money after that is be generous,

build your wealth for retirement. You know, your wealth building for you over the next, what, 20 years could be very substantial for you to retire with. Okay. Does that make sense? Yes, sir. That does. It gives me some good guidance, and I appreciate it.

Some days it's just hard to even process. Yeah. I think right now. Yeah. And let me tell you, there's no rush on anything we're talking about. Yeah. Yeah, I just want to be smart. Yeah.

In other words, you're not being dumb if you just let that 150 just sit in a money market. Okay. For six months, and we just cry. Yeah. That's not dumb. Okay. Matter of fact, that might be the wisest thing you could do. But once the fog starts to clear, the kind of things we were just talking about could give you your decision-making paradigm,

your framework that you look at to make your calls from this point forward. You obviously had a pretty good framework that you used to get to the point you are. I mean, you cleared up all the debts, and that gives you some margin. That gives you some emotional room to just rest a little, sit and sit in this and um um because you know it's just the the further you get from grief the the it never goes away completely but the further you get from it the less it affects your everyday thing so there's nothing wrong with making no more decisions for six months in your situation nothing is forcing you to i mean you can just park that money and cry for six months that would be okay and uh it'd be pretty normal really in

your situation hey thanks luke if we can help you anytime brother i'm sorry you guys are going through this just give me y'all help any way i can scott is with us in San Jose. Hey, Scott, how are you? I'm doing well, Dave. Thanks for taking the call. Sure. What's up? I think we've got our baby steps way out of whack, and I just need some advice based on what our circumstances are to see if we should sell some things to get them in proper order. I'm 58. I make about $350,000 a year. My wife is 45. She's starting her business up and she's sort of breaking even, moving to profitability. We have three kids, all teenagers. One of them is heading to college this fall. We've got about $900,000 put away for their college funds. Wow. We live in a $2.9 million house, but we've got a $1.1 million mortgage and a $250,000 second. $38K loan balance on a car.

I've got about $665,000 in an IRA, and she has $86,000 in her IRA. So, as I said, we're kind of all over the map on the baby steps. Do you have any investments? How much investments or cash do you have that are not in college or retirement savings? Probably about $40,000 in our checking account. Okay. All right, cool. Well, you don't really have your baby steps out of whack.

You didn't know they were there while you were making all this money and doing a great job becoming a multimillionaire. Congratulations. You've done great. You've done great, but you can use the baby steps to fine-tune your situation. That's all it is. And you just say, okay, what's the first baby step? $1,000. We got that.

What's the next baby step? Debt-free except the house. And how much is your second mortgage again? $250K. Okay. I'd probably roll that into a first, depending on your situation there. But you make such good money, let's get the car paid off immediately. Be debt-free.

That's baby step two. Number three is make sure your emergency fund's in place. Three to six months of expenses. Sounds like you don't have that either. So that $38,000 plus that rainy day fund are your first two things to do. And then let's get back to investing and getting your house paid off. And that's all you. It's just fine tuning.

You've done a great job, man. You make a ton of money. Good job. This is the Dave Ramsey Show. This is James Childs, producer of the Dave Ramsey Show. Did you know you can now listen to the Dave Ramsey show on Pandora and Spotify for all the ways to watch and listen, check out our show page at Dave Ramsey.com slash show.