The Ramsey Show - App - Should I Sell My Boat? (Hour 1)

Episode Date: July 12, 2024

Coming to you live, this is the Ramsey Show. Thrilled that you are with us. We're here to help you win in your life, win with your money, win in your work, and win in your life, win with your money, win in your work, and win in your relationships. The phone number to jump in is 888-825-5225. It's your show. We're here to help you. 888-825-5225. I'm Ken Coleman. I'll be steering the ship today.

And my co-pilot. Co-captain, I guess. The co-captain. If you want to call it a captain, we'll do whatever. I'll be starboard. He is George Campbell. I don't think that works, but we're going to go with it. You got your bomber jacket on today? I think it's going to be a hot show, Ken.

You think so? I don't want to speak it into existence, but it might be. So let's talk about what we're here to do. We kind of gave them the intro, but you're the money guru, and I'll call myself the work guru, right? And they often go hand in hand. They do, and those are specific areas of expertise. But obviously, there's a lot of relationship issues at George around money. But I am in the chair today.

So if you've got some, hey, I want to make more income. I want to get to the baby steps faster. Maybe today's the day you dial us up and we'll coach you in that area. If you're winning with work, as David said, your income is your greatest wealth-building tool, and I'm the guy to help you make more money in this whole money show. That is who we are, what we're here to do today. I think you're ready to go. It's a good synopsis.

Without further ado, let's go to the Big Apple. Anthony is joining us there to get us started. Anthony, how can we help? Are you with us? Hello, Anthony. Hello. There we go. All right. You're live, my friend. How can we help? Oh, Anthony. Hello. There we go. All right.

You're live, my friend. How can we help? Oh, wow. Thank you so much. So I'll make it very brief. So my wife and I, we are 27. We have a household income of $38,000. Why?

Because she makes $38,000 and I'm unemployed. Oh, boy. I have a, yeah, I have a bachelor. We have an eight-month-old son. I have a bachelor's in psychology as does she. I also have a master's in human-computer interaction. But in 2024, it just feels like this job market is impossible. I've been applying for jobs for months, and I've had no luck. I tweak my resume to cater to each job specifically, and still nothing. So my question is, what can I do?

Because we do have a lot of student loan debt, close to six figures in student loan debt, and we've got to take care of that. Yeah. Okay, so let's talk about the short term, and then we'll answer that direct question. But while you are working to get the job in a specific field, I would be working something, anything, two jobs. What would you say are your skills? Hold on, hold on, hold on hold on hold on you're jumping ahead of me george i'm just confused by the human computer thing we'll get through me off that's ux ui design okay i got spooked yeah uh so what what i want you to be doing in this meantime and i'm about ready to give you some advice on how we go get this job

but you need to be working while you're trying to get a job. Does that make sense? Yes, and I'm trying to do that too. No, you're not. You're not trying. You're telling me you can't go work, you can't work delivery driving, you can't work in a big box store, you can't just go get what we would call an hourly wage job that doesn't require any kind of experience or really honestly any skill, but could you be making $15, $18, $20, $22, $25 an hour? Anthony, you can do that while we're trying to get into our professional field. True or false? Well, yes, but I've been trying to apply for those jobs as well, and they're rejecting me from them as well. Maybe they think I'm overqualified.

Well, how could you be overqualified? You don't even have a job. You're straight out of school. I have a master's, and I was a teacher for three years, and I was also a store manager at Walgreens for three years. Okay, so give me an example of an hourly job that you've tried to get, and they're not giving it to you. Give me a couple examples.

I applied for Domino's as a delivery driver, rejected the same day. I applied for a manager at McDonald's, rejected the same day. I applied for help at Walmart, rejected within a couple of days. I have other jobs that I've applied to that'll say under consideration, but no luck. And same thing with, I've tried doing Uber as well, and there's a new law that passed in New York City where they gave a set wage, and because of this set wage, it's literally impossible to sign into the app. Like, I can't even log in. Are you, I hate to ask this question, but it feels like I have to.

Are you doing something weird or awkward or acting in some way where just a basic hourly job, which requires a pulse that you're not getting these jobs. What's going on in your mind? Or is this a mystery to you? I mean, I do have autism. Maybe that's part of it. Okay. How does the autism affect you in interacting? I don't feel like it affects me, but maybe others think I'm weird. Have these all been in-person interviews because you're saying i submit a resume and they reject me i mean i have had impression interviews

before but they just never go like i've had interviews like within the last month or two and i just never got the job so okay it's throughout your history connections yeah well let me i want to do i want to dive in on the autism thing throughout your your work history because you have been employed before, I mean, how does it affect you? What do people say about it? Does it cause issues or is it minor? Because you present as it's a very minor thing,

but I don't want to assume that. So what's really going on there? I couldn't tell you. You're telling me no one's ever told you, hey, you come across this way. If they know you're autistic, they don't tell you how it presents? My wife does because she's also, you know, she's a therapist. Okay, then how does it present? How does it present? I guess, I honestly don't even know, honestly. Okay, Anthony, listen to me. Anthony, listen.

You just got done telling me that your wife tells you how it comes across, and so when I ask you to tell me what she says, you tell me you don't know. She'll just say that, well, her sister's actually autistic as well, so she says that on a scale of one. She doesn't give me specific answers, but she'll say on a scale of one to ten, apparently I'm a nine. That's what she says specifically. I don't know what that means, but.

There's our problem. Okay. In all honesty. Okay. I'm going to move forward here. But in all honesty, you need to sit down with your wife and say, what does a nine mean? And specifically, what are my social challenges? You have to know how you're presenting because you can overcome that.

And so let's move forward here. What, if I could snap my fingers, if George and I could just give you something today, what is that field? What is the job, the career path? Is it the technology and the design in that realm? Is that what you would love to have? Well, I mean, I would like to be a UX researcher for now, but I'm also three years away from finishing my PhD in artificial intelligence. So I don't know if I would transition into that later on, but. Okay. So that's what we, we want to go tech, correct? Right. All right. And so we've got the bachelor's and we've got the master's. Here's the thing. You have got to stop playing the resume lottery where you're just filling out resumes. I'm going to give you a book.

It's a best-selling book, number one best-selling book I wrote called The Proximity Principle. Anthony, this is huge, okay? This is all about personal connection. And so you've got to know how your autism is presenting to people, and if in fact it throws them off, and if it does, how do we overcome that? How do we plan for that? How do we take the elephant out of the room and go, hey, I'm a high-functioning autistic person because you are. George, doesn't he present that way to you? Yeah, absolutely. Okay, so Anthony, this is all about personal connections. We've got to talk with people who are in the industry. We've got to meet with people that are in the industry. We've got to repeat that and repeat that and repeat that because you've got the qualifications certainly for entry level. But I'm going to tell you,

I think this starts with your wife who's a therapist helping you see maybe what challenges that you are having to overcome in all these interviews. Self-awareness is the prescription that I'm writing for you here, Anthony. Hang on the line. We'll get you the proximity principle. Keep your chin up. But listen, you are differently abled. You're going to have to start to own that, step into that, and you can provide so much because you are really, really talented.

Thanks for the call. We'll be right back. This is The Ramsey Show. Welcome back to The Ramsey Show. We're thrilled to have you with us. We're here to help you win in your life. George Campbell is my co-host. I'm Ken Coleman.

George will take lead on the money questions, and I'll be helping you out on any kind of work-related questions. We want to help you make more money. We want you to have meaning and purpose in your work. 888-825-5225 is the number, 888-825-5225. All right, George, we've got a lot of new people coming into the program all the time. And winning with your money, it can't happen without the budgeting element. That's why we believe so much in every dollar. Tell people what it is and why they need it. Well, with any goal,

you kind of have this lofty thing out there. I want to get out of debt. I want to build wealth. I want to save for the vacation. But the daily habit you need to do to get there is the budget. Just like with working out, you're going to have to actually work out regularly. I can't just say I want to lose weight. And the budget helps you accomplish that. And we created a great tool called EveryDollar. It's totally free. You can go to the App Store or Google Play and download it. And what it does, it just gives you a game plan for your money.

Instead of wondering where it all went, you go, I know exactly where it's going because I pre-decided ahead of time. And so before the month begins, you've got to make your EveryDollar budget to plan your spending, track the expenses, and save for what matters most. And keeping a pulse on it, that's what allows you to actually focus and win. So go download EveryDollar for free in the App Store or Google Play today. All right, good stuff. Let's get back to the phones. We're going to go to Canada. Calgary is where we are.

Gerald is there. Gerald, how can we help today? Hi, thanks for taking my call. Sure, what's up? I've been listening to the show for about a year, and I just had a question regarding a large financial purchase that I made about a year ago. A little bit of background. My wife and I were going through a really difficult time in our marriage at the time, which kind of, I guess, culminated in me having a, I guess, a near mental breakdown. There was some, just some, I guess, some emotional

unpatience from years, years ago that kind of came to light. And I was i was in pretty bad bad place uh we've been married for about 22 years and um went out and bought a three hundred thousand dollar boat so i'm just wow we're yeah we're in a we're in a better we're we've gone through in been in therapy and uh we're our marriage is healing and we're doing good there but right now that I'm kind of a little more in my right mind, I'm just wondering if I should continue on with that. It is something that my family and I enjoy together, and I'm just wondering kind of what the rest of the way from that. I'm assuming, Gerald, that you financed it.

No, I paid cash for it. Oh, you paid cash. Wow. What's your household income? Household income, I'm a power engineer. I make about $200,000, and then we have about $40,000 to $45,000 a year in lease land revenue. You're a big saver, I guess, huh? Yeah.

We put most of our retirement money into farmland. We've kind of sold the cows and rented out all the land now. Right, but my point is, you saved for a long time to be able to buy a boat in the tune of $300,000 cash. So you're just a disciplined person by nature, yes? Yes. So the savings was intentional, the purchase was impulsive. Yeah. You weren't planning to just blow $300,000 on a boat.

What's the boat worth right now if you were to sell it? Probably about $330,000, talking to the dealer where it came from. It appreciated? I could probably get around $320,000 to $330,000. I put about $15,000 into it. Oh, so you put some improvements in it that allowed it to appreciate. Yeah. Yeah. Wow.

Do you guys have any debt? We don't. No mortgage, nothing? No. So which way were you leaning? You called us for our advice. Which way were you leaning? What are you wrestling with on this?

Well, I go back and forth. I guess the biggest thing for me is I feel guilty having a toy worth $300,000. From a financial perspective, we've got about $150,000 in cash right now, and our land is worth about $2.5 million. Wow. What's your total retirement cash that you've got? Well, that would be the $150,000 that I've got in ETFs, and then we've got a $20,000 emergency fund. So you're worth how much total?

About $2.8 on the conservative side. What's your house worth? It's a rural piece of property. It's 160 acres. It's probably worth about $600,000. Okay. $500,000, yeah. And that's paid for as well?

Yes. Oh my gosh. Well, first of all, let's just... I don't know, George, that he should be feeling guilt over this. I mean, you've done very well. You're right that this toy is a gigantic part of your world. And as far as our parameters go, we say that everything with wheels, motors, should add up to no more than half of your annual income. So you are way above and outside of that parameter. And for that reason, it might be a good idea to sell. But you've done well.

You've paid cash. You don't have debt. This is not on fire. But I feel like the fact you're calling in tells me you're like, we should probably downgrade and boat. Could you do that? Could you sell it and buy a more reasonable boat? For the purpose, I mean, it is a big boat. It's for ocean fishing. My two daughters and my wife and I can stay on there for three or four days at a time quite easily.

It'd be tough to get a boat that would serve that same purpose for less. Could you do that once a year and rent it and then downgrade to your normal kind of day-to-day boat? Oh, and that's kind of the thing I'm thinking of. Like, we can sure go on a, you know, a charter is about $2,000 a day. You know, you can go on a lot of charters. Yeah, that's what I would do. You could do five charters a year for the next 30 years.

So what are you wrestling with? Because it feels like we gave you the answer you were looking for, and now you're arguing with yourself. Yeah. Am I right? Yeah, you're right. The thing I'm wrestling with is I've always been very, very driven. Like I'm very, if I'm not producing, I feel like I'm failing.

And I think it goes back to even just my childhood. Work and hard work was kind of the measure of success. And I guess I want to be different with my girls. I've got two grown kids, and I see that in them already, the drivenness. How does this tie into the boat? How does this tie into the boat? How does this tie into the boat? Well, with this boat, I'm going to take two weeks off work, and we've got to head to the coast for two weeks and shut her down and just relax.

So you're thinking if you keep the boat, it forces you to not be so driven. This is your counterargument to yourself. Yeah. Okay. I'm going back to george george said you could rent you could you could you could charter and do the same relaxation still forces you to relax right you're not making a very compelling case against yourself if i'm sitting here as the judge yeah it's not it's the law you lawyer not a wise financial decision because you could sell for 300 000 and you could charter five times a year for 30 years doing that that's what i would do so that's what i'm telling you right now i'd invest a big chunk of that george what if he does

if you sold for 300 you bought a 50 000 boat instead that gives you 250 000 profit right yeah yeah but if you invested that it would double every seven years if you got a 10 rate of return so what i'm saying is hey 14 years from now we could have a million dollars on our hands or Yeah. If you invested that, it would double every seven years if you got a 10% rate of return. So what I'm saying is, hey, 14 years from now, we could have a million dollars on our hands, or we could own a boat that's now worth $75,000. Well, that's exactly the thing that's killing me. I figured that out, too. This boat isn't a $300,000 boat.

It's a million-plus dollar boat in three years. Right, exactly, an opportunity cost. Gerald, listen, just charter it. You're so good at saving. Sell this thing, take just a teeny bit of that cash, George, and plan out your next couple of charters and just prove to yourself that you can have just as much fun with the family, but have a whole lot more cash. This is a no-brainer. George and I are telling you to sell it. And you guys have a flat tire on the investing side. I love that you have this land that's amazing, but I think it's wise to be diversified. And you have done nothing as far as retirement planning.

You're great savers, but if you channel that into investing, your money's going to have compound growth working for you instead of an asset that's going down in value. Since we sold the farm, look, we do put $3,500 a month. I guess last year and a half, we do budget with every dollar. We're putting $3,500 a month into retirement. Amazing. Good.

But here's the deal. We're telling you to pour some gas on the fire by selling this big old boat. You've got a false narrative that if I sell the boat, I can't continue to have all these great experiences and memories with the family, and George proved that wrong. Captain George. The old saying, Ken, the best two days of a boater's life, the day they buy the boat and the day they sell the boat. Oh, so you're saying the best day of Gerald's life is hopefully right around the corner. It's right around the corner, $300,000 payday. I'll take it. Oh, that's great. I'll teach George some maritime

terms on the break, and we'll be right back. This is The Ramsey Show. The Ramsey Show continues to help you win with your money, win in your work, and win in your relationships. I'm Kenton Coleman. George Campbell joins me, and we're here for you. 888-825-5225 is the phone you. 888-825-5225 is the phone number. 888-825-5225.

I want to point out, George, on this lovely Friday, we have a fantastic group of audience members out in the lobby. All over the country. Yeah, handsome, handsome folks out there. And smiling. And from all around the country, they're waving at us. I want to point out, we love when people come by and watch the show. People don't know.

I run into people and they go, oh, my gosh. I go, well, right down the street, come see us. Franklin, Tennessee, just south of Nashville. We're live 1 to 4 p.m. Central Time. Come see the show. And let us know you're coming. Go to RamseySolutions.com and somewhere on there you can tell us you're coming. But by the way, we give you free coffee.

Free baked goods. Beverages of all sorts. You get a mug, a Ramsey Show mug to commemorate for free. You get a free mug? One per family. You're kidding me. Wow. I hate to be the one to break it to you.

I got to get myself my own free mug. I use mine all the time at home. Are I qualified for that? I would say so. All right. I'll make sure you get one after the show. I need to get a free mug. It's a good pit stop as well for those on long road trips.

Stretch the legs. And we come out and say hi, take pictures, sign books, the whole nine yards. And George does stupid human tricks every once in a while. I occasionally do balloon animals. Okay, good. Currently working on a water buffalo. The kids love that. Not as easy as it looks. I'll bet. Those horns have got to be tricky. Alright, let's get back to the phones. Garrett's joining us in Salt Lake City, Utah.

Garrett, how can we help? Hey, thanks for taking my call today. I have a question regarding speaking to my current employer regarding being paid or not for participating in a business development program for the business. You broke up. You're participating in a business development program for the business. You broke up. You're participating in a business what? A business development program for a family business, an opportunity at hand. And I'll expand on that a little bit. I recently graduated from my university in entrepreneurship and business management, fully funded by my parents. So I have no debt there. I got married a month after I graduated.

She has one year left of school, fully paid for as well. We both have our own cars, fully paid off. So we have no debts outside of, we just have our normal expenses, such as rents and all. And we've definitely seen God's hand in both marriage and school and now work, where a month before I graduated, I made the right call to the right person at the right time, a distant family member who has his own company specializing in low-voltage wiring. And he's run it for 27 years and is looking for an exit. And that's where I come in, where I'm actually in the line for succession to take over for him in about a year, year and a half from now. And in that, he's run the company for about 27 years, but hasn't done too much to develop it. He's not so much of a businessman, but it's more skilled in the technical area. And it's just done what he can to run it.

And there's definitely a lot of opportunity in developing the business. And that's where with my schooling, there's a program. It's a master's program that is a business accelerator with professionals in the area. And we've been blessed by being accepted into this program. However, upon discussion with it, about it with the owner of the company, he is opted, he's open to funding the program and sees the value of it. However, during this time that I would be in the program, I would likely would not be paid to be doing this development

for the business. And this is three full days a week, and with the money I'd make on Mondays and Fridays doing work in the field for the company, over the nine months of being in the program, it wouldn't quite be enough to cover our basic expenses. Okay, so you've called us for what reason then then now that we've got the background? Yeah. To figure out how I should approach, uh, the owner of the company in discussing possible pay for it. Who's your uncle? Um, so he is, uh, he's not my uncle. He's a more distant family member. Oh, okay. He's the owner of the company. Yeah, but he's a family member.

Yeah, he's a family member. He's agreed to fund the program but not pay me while being in the program. Oh, I get it. I get it. Are you hourly or salary? Hourly right now. Okay. Well, that's part of the context right there, and that's part of the natural rub.

First of all, he's old school, as you said. He's not really thinking of this from a traditional kind of CEO mindset. He's the owner-operator, right? And he's going, great, I'll pay for you to go get this additional training, but I'm not going to pay you when you're in school. I'm paying for the school. I think that's a pretty fair deal, don't you? Yeah, and I absolutely see it that way. What's interesting about the— Hold on a second. Hold on a second. Hold on, hold on, because I don't want to get too much into a rabbit trail here. The bottom line is you called us saying, and George, I want you to weigh in here, but you're asking us, how can I convince my distant family member, who's the owner of this company, to pay me my hourly wage while I'm in a class that he's paying for?

And so the question I have is, when you brought it up to him, how'd the conversation go? Was there an actual conversation? Did you have any potential counterpoints or was it just, hey, would you do this? And he said, no, that's what I want to know today. What happened in the conversation when you brought this idea up? Yeah. So I brought up the discussion about the program, given it's a business accelerator. No, no, no, no, no, not the program. Have you brought up to him? Did you, the way you're saying this is that you brought up that you want him to pay you your hourly rate while

you're taking the classes. Did that conversation actually happen? We had a discussion recently where he shared his opinion on it and that's where he discussed it with me is what he saw regarding it and he said and he said that he would rather that i sacrifice uh being paid uh or he would rather that i sacrifice not being paid during that time that i am uh developing those aspects of the business rather than because it's not directly increasing profits to companies for those direct actions. Okay. That's all I wanted to know. I just wanted to know his true state of mind, how open he was to this. George? So this is not going to be a possibility. What is your other option here?

Is you paying for the class on your own while getting paid your hourly wage? The other possibility would be to likely not take the program. How much is the program? It's $15,000 for a full year of it. And I like where your head's at, George, because let me tell you where I'm at. All right, George, I think that we're going to talk about you, Garrett, for just a second, instead of talk to you. In front of your back, not behind you. That's right.

Here's what I think he should do. He's supposed to be taking over within a year or so or around a year. I think he holds off on this course. He becomes CEO. Then he builds it into a natural expense of the organization, and he can therefore, at that time, make that decision. The company that becomes a viable expense for the company saves him money. He loses no income, and we're only talking about 12 months. I just don't think

this trade-off makes any sense. There's no urgency here. There's no urgency. By the way, it's not feasible. Financially, it's not feasible for Garrett. What would you do, Garrett, to cover your expenses with no income have you thought about that yeah and that's where the point of conflict was where it's he's open to paying for the program but obviously if i were to do it despite it being direct actions to since the program is directly to build no no company garrett garrett you're garrett garrett listen we back on the same soundtrack. Garrett, Garrett, listen, we're on the same soundtrack. George is asking you point blank.

We've got 45 seconds. Yes or no answer. Have you thought through how you would make the money that you are losing by doing the three days a week in classes? We know the distant family is paying for the course. Have you thought about how you could make the money outside of the classes? Have you thought about how you could make the money outside of the classes? Have you thought about it? Yeah, I likely wouldn't be able to if I took the course. There you go. That gives my answer. This is not a feasible option. Let's wait.

Let's wait. By the way, you're still going to get the knowledge and the company's going to pay for it. Oh, by the way, if you're the CEO, it becomes a line item expense in the old every dollar company budget. Oh, by the way, if you're the CEO, it becomes a line item expense in the old every dollar company budget, right, George? There we go. Yeah. I like this plan. All right, Garrett. Thanks for the call. We told you what to do. Will he do it, George? That's the question. We don't know. Only Garrett can answer. There you go. Don't move. We'll be right back. This is The Ramsey Show.

Welcome back to The Ramsey Show. Thrilled that you are with us, America. We are here for you. We want you to win with your money, winning your work, and winning your relationships. I'm Ken Coleman. George Campbell joins me. The phone number to jump in is 888-825-5225. 888-825-5225.

You know what time it is, don't you, George? It's question of the day time. It's time for question of the day. It comes from Brady in, do you say Nevada or Nevada? I've heard it's Nevada. That's what I hear. That's what I'm going with. That's the correct answer.

All right, tell us what Brady's asking, George. I'm planning to apply to dental school this year, and I'm nervous about the total tuition of $500,000. I would be too. My parents said they will pay my way through school but will likely have to sell some commercial investments to do so. Is it worth it to spend a lot of money on schooling if my parents are pushing me?

Oh, that's a left field turn there with the parents pushing. Right there in the last part of the question. I was all aboard until the parents are pushing. Yeah, what's your gut, George? I love the parents. If the parents are saying, hey, we can do this, we need to sell some commercial investments, it sounds like they're doing pretty well. So as long as they're not taking on debt and they're liquidating assets they already own

and it's not going to derail their nest egg and financial plan, I think this is amazing that the parents are willing and able to pay for the tuition. I would also go, can we find it cheaper? Can we go to a more affordable dental school that also fits the bill? But the part that worries me is my parents are pushing me. Is it worth it to spend a lot of money on schooling if my parents are... Yeah, it's a red flag to me. Pushing is, I'm guessing this is not a typo.

If it's not, I want to know what would he do... Does he actually want to be a dentist? That's where I'm going. If they were willing to put $500,000 into something else, is there anything and what is above dentistry? I just don't want a guy drilling into my teeth because mommy wanted him to. Wow. You know what I mean? That's for sure.

So that's a big part of this, the pushing part. But is it worth it to spend a lot of money on schooling? Well, if you're paying cash and it's what you want to do with your career and you're able to do it, that's fine. We're not mad at famous big-name schools if you're paying cash and you're doing it for the right reasons. I've got to imagine if you don't have passion for fixing people's teeth, it's got to be the worst thing on the planet to do. I mean, that's pretty rough.

I'm going, if you don't want to pick up trash but that's your job you can hold your nose on that one literally but sticking your hand in people's mouths talking to them a lot of intensity there that's a tough business to wake up every day and go, I don't want to do this. You know, there's some gnarly looking teeth out there. Here's what will likely happen if he's not actually passionate about this. He gets halfway through, burns out, drops out. Parents are still on the hook for the half million. And now there's resentment. It ruins the relationship. I'm saying run. So that's the part. You know what he should do? He should take the clear career assessment. It would pretty quickly, in about 20 minutes,

give him a great report that says yay or nay on that job. So there you go. But I can't give it to him because he emailed it. Call us up, Brady, if you get the chance. All right, back to the phones we go. We're going to stay here in Nashville, and I'm told Jelly is on the line. Jelly? Hey, Ken. Hey, George.

How's it going today? Oh, we're having a blast. Can I just ask, is this a given name? I'm very curious. My name is Joseph, actually, but everybody calls me Jelly. Okay. That helps me out. Well, now I gotta ask. How did you come about getting the name Jelly if you're Joseph? Is it radio

appropriate? family friendly? Oh. I mean, that's just what my mom and dad decided they wanted to call me, so that's what it is. Oh, so it's a youngster around the house, instead of yelling Joseph or Joe, they just called you Jelly. Yep, that's it. Wow, love it.

I'm going to avoid the obvious retort here and just get right to the question. Okay, how can we help, Ty? How can we help? How can we help? So I have a question regarding baby step four. I have a Roth 401k at work that has about $215,000 in it. My company matches a half a percent up to 6%. So I'm contributing 15% now. I was wondering, do I need to back that down to the 6%

just to max out my match and open up a Roth IRA outside of work, or do I just need to keep doing what I'm doing since I already have that amount of money in there and that's just going to keep compounding instead of going out and opening up something starting from zero. Well, the starting from zero part doesn't matter. Mathematically, you're going to have the same,

if you have the same rates of return, the money is going to increase at the same levels, no matter what the account is. If it started from zero, if you add $1,000 to something that had zero or $1,000 to something that had $215, that $1,000 is going to appreciate at the same rate. Does that make sense?

Yes, it does. So you said this is a Roth 401k? Yes, sir. Okay, so you're contributing all 15% to the Roth side, and what is your household income? Or what's your gross income? Roughly $140,000. That's amazing.

So you likely are going to max out that Roth? No, you'll get close. This year's 23,000 is the limit. You'll get to 21,000 by doing the, you know, at 140,000 income. So if I'm in your shoes, and I'll tell you, Jelly, this is something I've done at Ramsey myself.

I put all 15% into that Roth 401k. The reason we tell people to invest up to the match and then go to a Roth IRA and then come back is if it's a traditional 401k. And the key you're looking for is tax advantages. So match beats Roth beats traditional. The match is free money. That's 100% rate of return. Take that. Next up, we have all of our Roth options. That would be the Roth IRA. Then we go to traditional. But because you have a Roth option with your 401k, you can just keep it simple and do all 15% there. If you go up, let's say your income goes up and you haven't hit 15% and you've maxed out the 401k, you can look into what's known as a backdoor Roth IRA, which is when you fund a traditional IRA with non-deductible money, and then you

convert it to a Roth. And that is a very legal loophole. Yes, sir. Does that help? That helps. We helped at least one person today, Ken. There you go. Well, that's your jam.

Let the record show. That's your jam to help the jellies of the world. Gosh, you're good. You see, I couldn't resist it. I've been thinking the entire call, what was I going to say? Couldn't work in peanut butter. What I wanted to ask was, was your last name Roll? Oh, well played.

Jelly Roll. Very famous Nashville country artist. By the way, one of the greatest Little Debbie snacks of all time. I believe they're Jelly Rolls. Fantastic. That's what we poor people packed in our lunch. Wow. That's a throwback.

Oh, yeah. A Little Debbie. I believe it's a Little Debbie snack. People can fact check me later. Let's go toback. Oh, yeah. A little Debbie. I believe it's a little Debbie snack. People can fact check me later. Let's go to Bozeman, Montana. Michael is joining us. Michael, how can we help? Hi.

Thank you for taking my call. You bet. What's up? I'm new to the Ramsey system, and I kind of dove in headfirst. I appreciate a system that's simple enough that is still idiot, it's still idiot proof after 30 years of the world. We're glad to have you aboard. Yeah. Um, so I'm reaching the stage where I'm looking at investing and I've heard Dave

speak before about avoiding bank related brokerages. Um, and based off of, you know, what I've heard from like Clark Howard and other figures, it seems like good advice in the longterm. But there is, there is not a smart investor pro within, you know, 150 miles of me. Cause there's like two in the state of Montana.

So my question is, is it okay to stay with us bank for the brokerage simply because I really appreciate having somewhere I can literally walk into an office and have that face-to-face? Because I grew up in a town where there was a U.S. Bank. That's an interesting question. That's a good question. George, what do you think? Yeah, there's nothing wrong with that. Here's the thing.

When you look into the big three, Vanguard, Fidelity, Schwab, what you'll find is they're going to have lower fees than probably a bank brokerage does. And the other thing about bank brokerages, they're going to try to sell you all kinds of debt products. That's how they're going to be making their money. And so that's the one thing to watch out for. Watch out for expense ratios, watch out for the products they're trying to put you into, especially when it comes to insurance products. And so I would just tread with caution. There's nothing, you know, evil about it. And, but you've got to be paying attention and you have to be making the decisions. Don't just let them put it on cruise control and say, we got it, Michael, don't worry about it. So if you look into all of that and it's everything checks out, they're putting you in,

you know, Ramsey approvedapproved investments and assets, and the expense ratios are low, they're not trying to mess with you and market crappy products to you, then go for it. Quick follow-up on that, George, on his behalf and for others. This is the first time I've ever heard that particular question, where there aren't a bunch of smart investor pros in a close vicinity. Couldn't he still, though? He'd still do remote. That's what I'm saying. You don't need to meet in person. I wouldn't let that limit you. I get the comfort factor of driving in, but it can be done. You can work with somebody.

I do Zoom calls with my SmartVestor Pro, and he's local. I'm just too lazy to leave the house. All right, very good. Good answer, George, as always. All right, that's going to do it for the first hour. We'll be back before you know it. This is The Ramsey Show.