The Ramsey Show - App - Should I Buy a Car for Ride-Sharing? (Hour 3)

Episode Date: November 4, 2020

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🎵 Live from the headquarters of Ramsey Solutions, broadcasting from the Dollar Car Rental Studios, it's the Dave Ramsey Show, where debt is dumb, cash is king. And the paid-off home mortgage has taken the place of the BMW as the status symbol of choice. My co-host today here on the air, Ramsey personality, Anthony O'Neill. Open phones at 888-825-5225. That's 888-825-5225. Alice is with us in Houston, Texas.

Hi, Alice, how are you? All right, how are you doing? Better than I deserve deserve what's up well i work and i drive for a ride share and right now i'm renting a vehicle uh to do it um i was people been telling me i need to buy my own ride. But so I did Baby Step 1. I haven't did Baby Step 2. So do you think I should buy a ride or should I keep renting a ride? Well, here's the thing, Alice.

With the ride share programs, I do know for an example, I won't say name the companies, but you got to have at least a car 10 year old, no more than 10 years old. So it sounds like you're not in a position to do that financially right now. OK, now is this ride sharing program, is this the only source of income you have right now coming in? Or is this a side gig and you have another full time job? No, I do this full time. Yeah. So what are you making

anywhere from 80 on up a week 800 a week oh okay and what's 100 well 800 plus yeah yeah and what's the what's the rental costing you i think like maybe $700 a month so you're working for free? no so $700 a month oh $700 a month not a week oh okay I'm sorry yeah

yeah $700 a month so you're like renting from a renter car company yes very interesting well here's the thing Alice So you're like renting from a renter car company. Yes. Yeah. Very interesting. Well, here's the thing, Alice. You can honestly, and grab me from Rome, Dave, on this one, because I'm going to say I don't have a problem with you renting if you're stacking up money to go buy cash.

So, for example, we're in 2020 going into 2021. That means you can get a 2011 car. Okay. I was just 2011 or newer. You can buy something. No, it has to be a 2015. Sorry. It has to be a 2015.

2015 or higher. So yeah. So that's going to run you about in, in between seven and $10,000. How old are you? 50. What was your last job? My last job was auction. Was what?

Working for auction. Auction. Okay. What were you making there? That was just very, that was just like a little part-time work like okay what you're describing uh scares me because i'm afraid there's some costs involved here or some lack of insurance that's involved here that might be setting you up for all kinds of problems i certainly wouldn't sign you up for a $700 car payment or a car payment at all in order to do ride share. But if we're going to move away from this whole thing, then we have to have a replacement for it.

You've got to eat. Yes. And you've been using this to eat. I get that. I like your ingenuity. You came up with some cool ideas and you scratched around, figured out a way to make a dadgum living. Good for you. I'm a little bit afraid whoever you're renting the car from might not be okay under the contract you've signed with you using it for ride sharing.

And I'm a little bit afraid that the ride sharing people might not be okay with the type of insurance and the fact that you're driving a rental car to do it. I don't know. There's a lot of stuff in here that's bothering me. $700 a month is bothering me a lot, too. It's obviously bothering you. She has to get a car, Dave. Yeah, but a 2015 to drive for that company, maybe you drive for a different one. Yeah.

But, I mean, I don't know what the guidelines are with the different cars. know one of them it has to be 10 years or newer okay like uber yes okay anyone said well that's okay say whatever i don't care yeah uber will allow you to do i don't know what lyft if lyft has a lesser or whatever but uh so a lot of drivers that i know drive for both uh it's usually a side gig too so i i would start saving aggressively and buy a car very very quickly yeah like and i'd be working like 24 7 i'd be working all the time to get out of this because i'm afraid you're in a trap but would i go buy a car on payments i've never told one in 30 years of doing told anyone in 30 years of doing this show to go borrow money and i'm not going to start today so i wouldn't but if i woke up in your shoes i would

work like a maniac and pile up enough cash in about a month to go do this um and you know you're coming into the holidays you probably can get really busy uh in houston texas because you know that that's what i'm going to do. Yeah, let's solve this in 30 days or 45 days and go buy a car. And even if you bought a lesser car and you couldn't drive for that same company for a period of time, then you move up, do the same thing again, then move up in car later. But do it with cash and stay out of the payment business. I would not do what you're doing for a long-term plan because I think there's holes in it, and I'm afraid you're going to get caught in a mess.

I'm making this up. I'm not sure. It just feels wrong. The possibility of the mess is, Dave, because I tried Uber, you know, just to test it out for myself. You have to provide a registration and proof of insurance. So I don't know how she's doing that because she doesn't have proof of insurance. Well, you can get insurance through the rental car company, but she doesn't have registration. Exactly.

She doesn't own the car. And the insurance is not her insurance. It's the rental car insurance company. I know. So I don't – you got me. Yeah. It just – it sounds like somebody – yeah. It's tricky.

It's tricky. All righty. All right. That's. Yeah. It's tricky. It's tricky. All righty. All right. That's what we're going to do. The second idea, other than just pile up some cash really quick and then keep doing this, is ask yourself, okay, I'm 50 years old. What do I want to be doing when I'm 65? Probably not Uber.

No. Probably want a career field. You probably want to start setting some longer goals and saying, okay, what have I got to do to get out of this car? What have I got to do to move into something else? That's why I was asking about your previous career. What are you trained in? What can you do? And so, okay, I'm going to start taking some.

Once we get this solved, let's start taking some classes. Let's do whatever we've got to do to move into the career field that you really want to do. And hang on. I'll give you a copy of Ken Coleman's book and help you move that direction. It's called The Proximity Principle. And, yeah, I think that's going to be your longer-term better answer. Yeah. That is the way this feels to me.

So I know what you're doing is not going to be sustainable. And I know even if you get into your own car that you can use and you make the same kind of money or more money and you won't have a $700 payment, you'll be making pretty decent money at that point. But you're working your butt off. Yeah. And what is the long-term aspects of that? Probably not your plan. Yeah. So we need a long-term plan and a short-term plan.

And you're a really, really hard-working lady really smart you're coming up with ideas you're scrappy to get out there and scratch around find some money i'm proud of you do that but let's get this situation fixed and it's not a car payment to fix it this is the dave ramsey show folks i love telling you about well-made well-thought-out products today i'm talking about grip six belts i don't know about you but I'm not a fan of traditional belts. They never fit right, and they're uncomfortable. Grip6 belts are unique. Owner BJ designed a truly modern, minimalist belt made of high-quality materials

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That's GRI blinds.com the number one online retailer of custom window coverings you get free samples free shipping and with the new promos they run every month you'll save even more the promo code the magic word to get the deal ramsey today's question comes from jennifer dave in alabama she says i'm a mom of a 12 year old boy my ex and i agreed in divorce settlement that we will each pay 450 of our son's college i've saved eight thousand dollars in coverdale savings and have sixty eight thousand dollars in a 529 with seventy five thousand dollars saved for my half of expenses. Do you think I should stop putting money in a 529? Should I save extra in a regular money market account? I've never heard you advise on how much

is enough for saving for college. I don't want to be stuck with penalties from 529 withdrawals that don't qualify. Please help. Um, Jennifer, my initial reaction right now is i would honestly say keep going into 529 only reason being is because right now the average four-year degree is going to run about a hundred thousand dollars if they stay in state but your son is 12 you have like another six more years and four years of school if he goes off to school so i would say probably get that up to a hundred thousand and then probably stop from there she's only paying for half of it yeah so yeah technically and uh so here's here's an idea um first thing i'd want to do is i didn't let's start talking about where junior is going to go to school yeah and let's deal with some real numbers yeah not

just a generality and say all right if we go say junior is going to go to school and it's going to be 200k then you know you don't need more than 100 in the 529 yeah because you're only paying for half and so you run it up to there and then you start or you build it to where it's going to grow to no more than that which is probably there now if that was the case so let's say that you did a little investigation you felt like your budget for school is going to be 200 yeah which by the way you can cover dorm everything yeah uh you know so what is the what's the budget for it and then if the 75 is going to grow to that much or more right then i would stop and i would use a money market the other option is i'm curious if husband's done his job ex-husband i'm gonna have

a little communication with him too has he is he also ready to pay for this has he done a 529 or has he got cash because here's what you could arrange let's pretend that they're on really uh good speaking terms and um husband's like uh no i'm just going to cash flow it i'm just going to i've got a big i got an investment over here i'm just going to pull some money out of stock at the time and do that you could run the 529 on up if you could get ex-husband to agree to let you use the 529 and him pay you oh and that would allow the 529 to grow tax-free for this yes but you gotta really you gotta have an agreement and you're dealing with an ex-husband and so and everybody's got to be on good terms and he's got to want to do that and all that now let's say that it's worse than that and it's more

let me give you a more normal scenario that would be weird yes for everybody to love each other that much still and be trusting each other that much still and writing willing to write agreements that much still there's a reason the x is usually the x right and so uh the other way you could do it the other thing i'd be worried about i want to have a conversation with x if he's not let's pretend he saved nothing and he doesn't make any money now we have an issue he's not going to cover his half right then you may want to go ahead and find the 529 because you may even though you're not by the divorce decree liable you may want to fund more than 50 because the other 50 is going to be left dangling in the wind might be student loan debt if you're not careful right so i want

to know what the other half's doing in this deal yeah and that's going to tell me what to do if the other half's ready to go and they've also saved a 529 or you just don't want to deal with them but you think they're going to have their half covered then yes you would stop when you get to the point that the 75 is going to grow to enough to be your half. And I would want just really solid, good information, a good budget. Because what we find, Anthony, is people don't know what college costs. They just think you they know. They really don't, Dave. And that's why I was just saying, looking at Alabama and looking at a full year,

if they say the end state and maybe went out of the city, away from the house, from school costs, dorm costs food costs it's going to be about 170 to about 190 for in-state school experience for four years by the time that 12 year old gets there exactly right now you're inflating it up it's about 100 right now yes sir so right now that's and that's 100 000 right now without dorms that's just for um uh your your tuition no it's not that's with dorms yeah you're right you're right i'm sitting up wait my mouth is, it's not. That's with dorms. Yeah, you're right. You're right.

I'm sitting up. Wait, my mouth is off. It's about $11,000 a year tuition for in-state tuition nationally. That's the national average. Right. And then you add dorms to that. You can get up to 20 pretty quick. Yes.

And so you're looking at 80 to 100 today for in-state today. But he's 12, so he's got eight more years. Eight more years. Or five more years. I'm sorry, seven more years. Six more years to get into college and then four more years from there. Yeah, and that's going to inflate. It's going to, hypothetically. I don't know.

Maybe some of these people have slapped higher education around enough that the prices aren't going to go up as much as they used to, but I'm going to plan for them to go up. I am. That's why I said I would get the extra $25 in there and then slow down. Good, good. Good discussion. All right, Jake in there and then slow down. Good, good. Good discussion. All right, Jake is with us in Kansas City.

Hi, Jake. How are you? I'm doing great, guys. How are you? Better than we deserve. How can we help? So I have a question for you. I'm 33.

My wife is 28. We currently have right about $450,000 in our 401k. Way to go. Thank you. So I was on Chris Hogan's retirement calculator, and according to it, if I don't put anything else in, I would still have plenty more than enough to retire on. So I was wondering if it would be unwise or foolish to maybe, would it be okay to knock contributions down to maybe more like 10% instead of 15? What are you going to do with the difference? Make the wife happy, I don't know.

But let me ask you this question. Why? Do you not want to retire with more money? No, I mean, I do. but let me ask you this question why do you not want to retire with more money uh no i mean i do like i wasn't wanting to drop it off all together or anything i just didn't know if it would be okay to knock it down a little bit we got a few some stuff we want to do and i mean we're in baby steps four five and six yeah no i would just keep going yeah i'd stay at 15 and i think you run your budget on the stuff you want to do and that lowers the amount you put extra on your home yeah because you're paying extra on your home right yes yeah you slow that down yeah to do some of the other stuff and that's called um you know

obviously in baby steps four five six we say you don't have to be gazelle intense but you do need to be intentional and be doing it on purpose. But no, I'm not, I wouldn't stop doing that. I've just never met anyone that said, you know, I got too much money in retirement. That's what I was thinking, Dave. I've just never met anybody that's going to, you know, that when you get there, that it's, that it's a different thing and you're going to be able to do, you've done a great job to get to the point you're at. And I think you're going to be able to do anything you want to do if you're careful. It may slow down paying off your home early.

But that's not a problem. Right. Open phones at 888-825-5225. You guys jump in. We'll talk about your life and your money. Well, it's hard to believe, but we're finally the other side of the halloween we're the other side of election day i was gonna say we're the side of an election but i'm not sure we're the other side of that but the other side of election day which means it's officially christmas

it is it means we skip thanksgiving so um hey the ramsey christmas giveaway has begun. You can go and sign up. No purchase necessary. Every day we're going to be giving away $500 a week and $5,000 as a grand prize between now and Christmas. So go to DaveRamsey.com slash giveaway. Christmas will be here even in the pandemic. And you're going to need money. Yes money and we're here to help you so uh while you're there signing up for the 500 giveaway per week our uh and the uh five thousand dollar grand prize no purchase necessary check out the things that you can purchase because there's some great deals already on our website the ten

dollar sale it's famous is back any of our books right now i think all of our books just about are ten dollars each and so people buy them by the case and uh total money makeover anthony o'neill's bestseller debt free degree to send your kid to college debt free start talking the teenagers about it all of these are 10 bucks chris hogan's book, Rachel Cruz's book, John Deloney's books, Christy Wright's books, $10 each. Check it out. You can win some cash, and you can get some deals. Go to DaveRamsey.com slash giveaway. Anthony O'Neill Ramsey personality is my co-host today here on the air.

Open phones at 888-825-5225. Crystal is with us in Orlando, Florida. Hi, Crystal. Welcome to the Dave Ramsey Show. Hi, Dave. Hi, Anthony. Good afternoon. Thanks for taking my call.

Sure. What's up? So, very long story short, myself and my husband are buying a new home. So we are selling our current home to Roller Equity into our new down payment all under your guidelines. But my father came to us and he actually would like to purchase our current home as a rental property. And he would just be paying cash outright for the property so just calling for your guidance is there any way to do things the right way but also avoid paying any unnecessary fees such as for the realtor or any associated costs just to transfer that over to him sure it's fairly easy uh contact a do you have a real estate agent friend?

Everybody does. Yes. Yeah. Yeah. Ask them which title company they use and to give you an introduction to a title company. And you can either get the real estate agent friend to give you a contract, a blank contract, and show you how to fill it out as a favor or the title company can do that and then uh because you do want to do a contract uh that way and not because we're scared about that or something but because issues like the proration of taxes or whatever issues about

repairs all those kinds of things need to be have been covered on the contract so that everybody in the deal knows what the deal looks like it's not a big deal it's just a fairly simple little real residential real estate contract form there's not it's not rocket science and then that title company can do the closing for you oh great and that they'll prepare the deed and um your dad's doing a cash transaction so it's very easy if i were him I would purchase title insurance. I always buy title insurance when I buy real estate. And then, you know, and he could buy it from that title company, and they will probably charge you very, very little to actually do the closing.

And doing the closing involves drafting the deeds, having him drop by and sign the deeds. They'll do a closing statement that just shows the proceeds coming in and the expenses going out, the prorations going out, and the net proceeds to you. He'll give them a cashier's check. They'll give you a cashier's check, or you can wire it, either one. It's not unusual this day and time to do it. Wire and do it all by email, and nobody even goes to the title company title company in the old days we used to actually go over there and have a physical closing moment where we signed all the documents but that's not done that much anymore yeah uh and

so but they can do all of that for you it's a couple hundred bucks maybe uh plus or minus him buying a title policy if he chooses to um or you furnishing him a title policy if you choose to do that but uh that's how i would handle it i just have the title company do it for you policy if he chooses to um or you furnishing him a title policy if you choose to do that but uh that's how i would handle it i just have the title company do it for you perfect well thank you so much and my husband and i went through fpu we paid off 110 000 in 13 months wow do anything now and we just can't thank you enough for putting us in such a good what a great place you guys are in the new babies on the way you're debt free the house is sold to dad life is good

way to go thank you thanks to you thank you so much well thank you i appreciate you calling awesome very very cool zach is in youngstown hi zach how Zach. How are you? I'm not too bad. How are you? Better than I deserve. How can we help? So basically, long story short, I got injured at work at the beginning of this year. And one thing led to another. Now I'm about seven months behind on my mortgage payment and looking at foreclosure, kind of looking at all options, and it feels like bankruptcy is my only way out. I'm seeing if there's any other way.

I'm sorry. Are you feeling better? Yeah, I'm getting much better. I had surgery a couple months ago, and I'm just now starting to slowly get back into work. Are they paying you workers comp they are but that has been a up and down roller coaster from the get-go i went about four or five months without any pay before it all got settled are you married uh divorced okay so you're the only person in the house? Correct. Okay. Man, I'm sorry. Yeah.

What a horrible thing to go through. Okay. Well, let's talk through it for a second. What's the house worth? Well, right now, I was actually in the middle before I got hurt of doing some remodeling. What could we sell it for quickly? $75,000. And what do you owe on it? $85,000. Okay.

So you've torn it up enough that it's devalued even below what you owe. Yes. What kind of mortgage do you have, FHA, VA, or conventional? FHA. Okay. All right. And your purpose for filing bankruptcy is what? Well, I mean, basically, it's going to be the foreclosure on the house. I didn't want to go through the foreclosure, and now I also have a $500 a month child support, $500 a month car payment, and about $200 in a debt consolidation that I had done after the divorce.

Okay. All right. Child support is not bankruptable, neither is alimony. Okay. So that's not going away. The car payment's not going away unless the car goes away, so sell the car. Mm-hmm. Let's, and if the, so here's the thing.

Bankruptcy's a 10 out of 10 on dropping an atom bomb on your credit and your future, okay? A foreclosure on a home, except for purposes of buying another home is about a four out of ten it doesn't really affect you that much and fha does not pursue deficits meaning hud doesn't come after you if the house doesn't bring enough so you can stay there until the foreclosure have a rental lined up and move out and in in the meantime, pile up cash as high as you can pile it, sell the car, get rid of the $500 payment, the child support's not going away anyway, and if you do all of that, bankruptcy's not going to do anything for you. There's not, I mean, you're going to go through the foreclosure whether you file bankruptcy or not.

Yeah. Because bankruptcy doesn't stop a foreclosure. And there's not a bankruptcy that wipes out a car payment unless you hand them the keys to the car. So you don't get to keep the car without the car payment. And this car payment's killing you. So the car needs to leave. And this house is a mess. You're going to, you know, you sell the car and you move into a rental and you start getting an income coming in again.

That's your quickest way to rebuild your life. You don't need to file bankruptcy. I agree with you, Dave. And Zach, how long would it be before you can get an income coming back in? So I'm starting basically on a sliding scale to go back to work i'm at about half a day now okay um hopefully within two three months i will be back full time yeah same company yes and are they gonna pay you your back workers comp that's that's the main question it's still it's been a fight since the beginning there's some paperwork on their side that wasn't filed correctly um it's a federal job so the department of labor took over and they haven't uh haven't been the easiest to work with either well they're not working much with any excuse to not work with the COVID stuff. So, oh, my gosh, I'm sorry.

Yeah, well, I mean, we get your income coming back in, and, you know, here's the thing. Have they given you an actual date on the foreclosure yet? No, not yet. So I had tried to apply for a mortgage assistance to lower the payment temporarily, and that got dragged on up until about a month ago and they finally said that they were denying my uh it really might be five more months before they actually do the foreclosure yeah and just just live there and pile up cash and get rid of the stinking car and get you a cash car with no payments and um I'm going to put you into Ramsey Plus.

I've been right where you are. It's no fun. Ramsey Plus will teach you how to handle money. And I get you into Financial Peace University, and I'm going to pay for it for a year because I remember how it feels to be scared and be right where you are with a foreclosure breathing down your neck. This is The Dave Ramsey Show. our scripture of the day second corinth Finally, brothers, rejoice. Aim for restoration.

Comfort one another. Agree with one another. Live in peace, and the God of love and peace will be with you. Barbara Bush said, you must read to your children, and you must hug your children, and you must love your children. Your success as a family, our success as a society depends not on what happens in the White House, but on what happens inside your house, which is what we say all the time around here. All the time. I had forgotten it was a Barbara Bush quote, but there you go.

All right. Stephanie is with us. Stephanie is in Washington, Yakima. Hi, Stephanie. How are you? Good. Thank you. Thanks for having me on.

I'm a new listener, and I appreciate you taking my call. We're honored. How can we help? Yes. So I'm going to be coming into an inheritance of $25,000 and I wanted to know the best option to not, one, to not be taxed on it. And two, how should I invest it properly? My husband and I, we own a home. We don't have any credit card debt, so we paid off all of our credit card debt. Good. And we don't have a 401K, though, and we don't have much in savings.

So this is a large sum of money for us, and I want to invest it in the best way possible. Good for you. Well done. Okay. And what was the inheritance money in? In what form is it? Well, it's going to be as a check. Okay.

So it's just cash that came. Okay. There is no taxes on it. Inherited money is not taxable. So that's an easy part of the equation. And then, Anthony, we teach folks to, you know, as a new listener, our new arrival at Ramsey, Stephanie, we have a system we call the Baby Step. Yes, sir.

Yes, I was just about to ask that. Stephanie, you said no credit card debt. Do you have any other debt? Yeah, we paid it all off. So do you have any other debt? The only other debt other than our home mortgage payment, which is approximately almost $1,400 a month, is a hospital payment when my husband and I lost our baby. And I've been paying on that.

So I owe a little less than $5,000. Okay. Any car notes? No. I own my own vehicle, and my husband has a company vehicle that he drives. So as a new listener, Stephanie, right now, what I'm going to suggest that you do is follow the first three baby steps. Go ahead and pay off that $5,000 and jump straight into baby step number three, and go ahead and get a fully funded emergency fund of three to six months right now.

Of expenses. Of expenses set aside for emergencies. Okay. What we found is that being debt-free completely, housing later on, housing everything, is the shortest path to wealth and stability along the way. So baby step one is $1,000 saved. Obviously, we're skipping through that. Two is to be debt-free but the house, and that's what Anthony just outlined,

knocks out the $5,000. Three is a fully funded emergency fund of three to six months of expenses. What's your household income? My husband makes approximately $4,000 a month, and I bring in approximately about $2,400 a month. Okay. So you guys are making about $80,000, $90,000 a year. Does that sound right? Yeah.

Roughly, it's between $60,000 to $70,000. Okay. Okay. Okay. And so if you were to set aside $15,000 as an emergency fund as representing three to six months of expenses and never touch it except for emergencies, that's all it's for, then that would be great. So that's using up $20,000, if we said $15,000, of the $5,000 debt of the $25,000. That gives you another $5,000 to do something with you might start investigating that that moves you past your um uh baby step three baby step four five and six we do at the same time four is we put 15 of our income into retirement five is kids college if that's appropriate and six is begin to pay off

the house and so you would be at baby step four getting up getting your budget arranged and start putting 15 of your income away and we can use the last 5 000 of this 25 to jump start that maybe with some roth iras and you know click smart vestor at davramsey.com you can find some smart vestor pros in your area to maybe help you get that started. But it looks like you're going to be able to do a lot with it. I mean, you fully fund the emergency fund, knock out any debt that you got there, get that thing out of your life. It's great to not have that payment again, because every time you make that payment, you have to relive the memory and the pain of that event. And so it'd be great to have that out of your life and then begin your investing and time to get the 401k started and the Roth IRA started and those kinds of things. And part of that will be getting on a budget, you know, jumping in Ramsey Plus or something like that, getting your budget going with the EveryDollar app.

And this is really going to take you a long way. That's pretty cool. I was just thinking that. I was like, wow. And blink of an eye, she's already on Babesups 4, 5, 6. And a blink of an eye. Yep, just like that, got there. And so that's pretty cool.

All right, Cassie is with us. Kathy's in Springfield, Massachusetts. Hi, Cassie, how are you? Cassie, are you with us? Well, maybe not. All right, let me see if I can get to Armando in Miami. Hi, Armando. How are you?

Good, good. Thank you very much for listening to me. Sure. I have a question, and I listen to you religiously, and you say that if you have any money in a savings account, once you have an emergency fund, which I do, it's better to pay off your house with that money apart from the emergency fund. The situation I have is a little bit peculiar or different in that I'm retired. Me

and the wife are both retired. Our salary is $130,000 a year. We have no debt except for we owe $150,000 on the house. And also I have $500,000 in a 401k. The problem is if I take the money out of the 401k, it becomes salary. And with the salary I'm making, I'm going to pay at least 20% on that $150,000. And isn't it going to cost me a lot more money to pay off the house? And right now, the monthly payments on the house are only $650 plus tax and insurance. So I can pay for that very easily. I'm still putting away over $2,000 a month in savings. So I'm hesitant, and I wonder if you're thinking of them. I'm hesitant. And I wonder, I'm 61.

We're both 61. 61. Okay. If we stopped saving money, you're making 130. How quickly can you pay this house off out of your cashflow? Well, um,

uh, the thing is, I want to live, you know, cause we're retired. I want to live halfway, you know, in other words, I don't want to keep away from the lifestyle. Okay, you do whatever you want to do. What I'm going to tell you is this.

The data that we have on millionaires is, and you do not want to go up into your later years, it's still hanging onto this house payment like it's a freaking pet. So I want to get rid of it. You decide how you're going to get rid of it. If I'm in your shoes, the house payment's gone. Absolutely. I'm either going to get rid of it by cash flowing it over the next three years, and you don't want to do that because you don't want to trim down your lifestyle,

you're enjoying your retirement, okay, then pull enough out of your 500K to knock that puppy down. And I'd be done with it. I would absolutely be done with it. And then the fact that you don't have a house payment just pay yourself a house payment rebuild some investments over time with that uh but in the meantime you're not paying a stinking bank interest and i gotta tell you man when you don't have a house payment anymore the grass feels different under your feet

that's why i'm kind of tripping uh dave like why would you not want to go ahead and aggressively do that so when you are older you don't have to worry about nothing you can really enjoy your life well he's enjoying his retirement now doesn't want to spend any of the 130 000 income that's cool but you're going to pay the 20 20 on the taxes in as you pull it out you are going to have taxes on 401k no penalties yeah but i would pull out enough to pay off the house out of the 401k today and i'd be debt free take the old house payment. You'll rebuild that amount lost within a short period of time just by investing a house payment for yourself into your own situation. But, Armando, you can do whatever you want to do.

It's your life. You know, it's your money. Hey, thank you for the call. Anthony, good job today. Hey, Dave, thank you. James Childs, Kelly Daniels, great job in the booth. I am Dave Ramsey, your host. We'll be back with you before you know it.

In the meantime, remember, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus. This is James Childs, producer of The Dave Ramsey Show. On your smart speaker, you can add our skill by saying, Alexa, open the Ramsey Network skill. From there, you can add our skill by saying, Alexa, open the Ramsey Network skill. From there, you can listen to all our shows. Ask Dave money questions like, how do I invest my money? Or what is the debt snowball? Find out more at DaveRamsey.com.