The Ramsey Show - App - Should I Stop Investing While the Market Is Down?

Episode Date: May 11, 2022

Dave Ramsey & Rachel Cruze discuss: Should you stop investing while the market is down? Should you sell a gun collection to pay off debt? How to move a 401(k) after your company gets bought out, What to do after your car gets totaled, Should you close your credit cards after you pay them off?  Want a plan for your money? Find out where to start: https://bit.ly/3nInETX Listen to all The Ramsey Network podcasts: https://bit.ly/3GxiXm6

Live from the headquarters of Ramsey Solutions, it's the 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. Rachel Cruz. Ramsey Personality is my co-host. We help people build wealth, do work that they love, and create amazing actual relationships. This is The Ramsey Show. The phone number is 888-825-5225. Mary's in Hartford, Connecticut. Hi, Mary. Welcome to The Ramsey Show. Hi, Dave. Thank you for taking my call, and thank you, Rachel, for listening in on this, too. So my question, my husband and I are in our early 60s, and thank you to you and to your plan that we paid off $200,000 in two years

by selling things, but we were-free january 1 of this year wonderful thank you so much for that yeah my my question because we hope to retire in the next two or three years um i'm nervous about investing in my 401k because every time i turn around it's going down and down and down should i use that money instead just temporarily to help pay off our mortgage? No. How old are you, Mary? 60s, early 60s. Yeah, early 60s, yeah.

I thought you said 36. No, early 60s. And we make a good income. We're about $300,000 before tax. How much is in your 401k? I have, last I looked, it was $389,000. Okay. What's your total nest egg? Husband's, yours, everybody's. Well, we have $43,000 in our emergency fund.

We have probably about another $30,000 in savings and checking. And that's it. Your 401k is the only one. Your husband doesn't have one. That's right. That's right. You have a pension? In our home, I have a small pension.

Now, does he have a pension? No, he does not have a pension. Okay. So you've got, let's just call it $400,000. And how much is your mortgage? Okay. What we have left on our mortgage is $315,000. The Zillow, I just looked at Zillow, and it is estimated to almost a million, which is crazy.

I love it. It amazes me, but it was, yeah. So you're millionaires. $995,000. You're baby step millionaires. Yeah, I guess. Right, but I'm nervous about it. I appreciate that.

I don't want to retire with a mortgage. Good. I don't want you to retire with a mortgage either. So let's lay out a plan on the mortgage. Good. I don't want you to retire with a mortgage either. So let's lay out a plan on the mortgage for a second. How many years more are the two of you going to work? How many years have we got to pay off the mortgage? Well, I would like to be able to retire in two years and perhaps for my husband another four years. Okay. And how much of the $300,000 does he make? He makes $250,000.

Oh, he makes the majority of the income? Yes, yes, yes. Okay. And so in four years, if you paid off $75,000 a year out of $300,000 income, the mortgage would be paid off, right? Yes. Yeah. Without having to touch the phone.

And you can still put 15% of your income into retirement and maybe step four. But I want you to put on your magic hat again and predict to me when the market's going to rise up again. I can't. But the market's not crashing. The market is down 5% in the last 12 months. 5%. 5% is not going to keep you from retiring. As a matter of fact, it means that you're at the store

and they just announced a sale over the intercom. The shirt you wanted to buy is on sale, Mary. This is not the time to not buy the shirt. The stock market, when it's down 5%, it's on sale. This is not the time to not buy the shirt. All right. The stock market, when it's down 5%, it's on sale. You don't want to buy it when it's up. You want to buy it when it's down. Okay.

All right. It's still scary to see that in my number go down. You're fearful. It is scary, but let's understand. 5% of $400,000 down is not going to cause you to be able to retire or not be able to retire. You don't have a 5% issue. Okay. If you have a 50% issue, if your $400,000 went to $200,000, like if you're investing in Bitcoin, it's down 50%. No.

And your $400,000, which you're not crazy so you didn't do that but i mean if you you would be down to nothing right i mean and you'd be down to half and so we're not talking about that we're talking about five percent and five percent of four hundred thousand dollars is eight thousand bucks it looks a lot bigger when I look at my statements. It looks a lot bigger when you listen to the news. The news is going, the right-wing news is going to do everything they can to talk about how horrible the economy is until the fall because they're trying to get the Democrats thrown out of office,

and the biggest thing that can get a politician thrown out of office is the economy. So they're going to talk about inflation. They're going to talk about recession. They're going to talk about high gases. They're going to talk about high interest rates. They're going to talk about how horrible things are, and the stock market is crashing. And if you keep the right-wing news on, you're going to see that from now until fall every it's going to be a steady beat of that for the next six months you're going to get a diet of it it's going to drive you bananas i turn it off and if you watch

the left wing news they lie about it on the other way so these things that that you know the right wings are saying it are true but they're they're overstated like when a tornado is coming through they tell everybody they're going to die it's the same thing because they're trying to get ratings okay but let me say this though when she does look at the statement and she sees oh that's what we lost like it is it's a punch in the gut yeah so mary though but what i would encourage you is you know well i mean but she's close to retirement so she is looking she's got she's not going to use the 400. I was going to say, though, is that at that point, you kind of just put it away and not

sit there in this like rat race cycle that you have. Let it play out because you're going to still be in the market for another. You know, that's a good point. You're not going to use the 400 when you retire. Yeah. You're just going to live off the income. Right. And so if it's up 8000 or down 8000 it doesn't matter just keep it okay and so watching the statement month in and month out i'm 61 i don't look at my statement not because i'm emotionally

incapable of doing it but i just don't bother because i'm really not going to use that money right now and the current problems in the world are not going to bother me one way or another because that money i'm not going to use it right now mary's in the same situation she's not going to use that money she's going to use the income off of that money right and so i would be more concerned for her if i thought the 500 000 or $700,000 that'll be by the time they get to retirement would not create an income. For them, yes. If there was not good returns on that to live off of the returns of that money, that would concern me more. Yes.

Than the actual amount going up or down 5%. How much income will it create over time? That's what I'm worried about. That's a good way of understanding it. But yeah, Mary, it's normal to do this. I really turn off the news and I quit looking at your statement every month. And it's not to be ignorant,

but it's driving you nuts. And it would probably drive me nuts, actually. I either turn off the news and I don't look at my statements. So there you go. This is The Ramsey Show. I don't, I had to turn off the news and I don't look at my statements. So there you go. This is the Ramsey Show. I'm just kidding. You know, we did a survey recently looking for ways that we could serve you better.

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Wherever you are in the process, whether getting a quote or getting your policy approved, please take the next step. Go to Zander.com or call 800-356-4282 and let them help. Reginald Cruz, Ramsey Personality, is my co-host. Guys, if you're wondering whether to buy or sell a home this year, we've got some answers. You can expect the market to be a lot like last year. Well, prices will still be on the rise. Interest rates are headed up. It may slow down a little bit. If you're buying a home, you could be up against some heavy competition still.

You're definitely going to be up against a hefty price tag compared to three years ago. Plus, higher interest rates means higher mortgage payments payments you really need to stick to your budget to win in any market you got to know what you're doing and you need to work with someone who knows what they're doing this is not amateur hour in the real estate world you need a pro in your corner walking with you advising you teaching you our endorsed local provider program will lead you to a real estate agent that is the best in the business. As Ramsey Trusted Pros, they care about your values, keeping more of your money in your pocket,

and really not being crazy and just doing something that will get you hurt later just in the name of buying a house. Ramseysolutions.com slash agent, that's where you can find the elp the endorsed local provider for real estate that's ramsey trusted in your area ramsaysolutions.com slash agent our question of the day comes from blinds.com they have a 100 satisfaction guarantee that means even if you mismeasure you pick the wrong color they'll remake your blinds for free. You get free samples, free shipping, and with the new promos they run every month, you'll save even more. Use the promo code RAMSY to get the best deal. Today's question comes from Lucas in Maryland.

I am currently in Baby Step 2 working on paying off the remainder of our student loan debt. We have paid $69,000 but have a balance of $38,000. We paid off our home. We make $100,000 a year. I have an extensive firearm collection that I could sell off a portion of and pay it off tomorrow, but I'm hesitant to do that as I am afraid I wouldn't be able to replace many of them. Should I sell them to pay off the debt

tomorrow or keep moving the way i am and pay it off by december i don't know firearms are kind of in your uh in your bucket of life i'm not sure how much i could speak into that uh i'm an extensive i'm an extensive purse collection it's a third. There we go. Now we'll make it relative. All right. All right. You're working with me. Okay.

I mean, I don't know. I would be interested in your take on this because for me, I'm like, okay, you make 100 grand a year. You have 38,000 and you have a plan paid off by December. You could just keep trucking along. Easy enough. Yeah. Easy enough and pay it off without having to.

But the thing I would do is this. In any collection I have, and I'm a collector of things. Oh, we know. just keep trucking along easy enough yeah easy enough and pay it off without having but the thing i would do is this in any collection i have and i'm a collector of things oh we know i have an ocd side to me i collect used water skis i collect firearms i've got i'm just like i get i get off on something i go down the whole rabbit hole and don't get out so collector hoarder right along the fine line of that yeah so anyway the um this is not about me uh so what i would tell you though as one firearm guy to another guy that has an extensive collection i don't know what you mean by extensive collection, okay? If you have an extensive collection that is worth $300,000, okay, and you can sell off 10% of it and pay this off today, you probably have 10% of stuff around the edges of that collection

that you don't care that much about. That's not in the sweet spot. Those are not your babies. They're not safe queens queens as we call them and so um the uh you know you but but you know if your entire collection is eighty thousand dollars and you'll be selling half of it then you're probably cutting out a little bit of your heart when you do that so i think that's what you got to ask yourself and just say okay is it worth it is there some of these items that i care more about being dead on being out of debt on than i do the other way i will tell you

this if if the numbers were different if it was going to be an extended period of time yes i don't care three years yeah i'd just i'd be selling your stuff man yeah and uh i will never forget in financial peace university years ago when i was teaching it live with an overhead projector this big old guy he's a linebacker looking guy completely ripped probably you know 260 pounds muscles everywhere blonde headed guy uh country boy uh he and his little bitty nurse wife are sitting there and she starts telling the group what her husband had done to get out of debt and she's just crying and i'm like what in the world and she said he has had this knife collection that was his prize most prized possession and um he sold it for twelve thousand dollars and we

paid off all of our debt last week because he loves he said i love you and my kids more than i love my knife wow and what that spoke to her that it just screamed at, I love you and my kids more than I love my knife. Wow. And what that spoke to her, it just screamed at her, I love you. And the whole place is just like giving him a standing ovation because that's a man. Yeah. That's a grown-up who will sacrifice for the good of their family. Just stuff. For their future. That's what it is.

Just stuff. So in that sense, if these numbers were different, Lucas, I would be putting you in that category and saying, dude, sell your guns. Yeah. Sell your guns. They're just guns. I mean, it's just stuff. Yeah. So in that sense, if these numbers were different, Lucas, I would be putting you in that category and saying, dude, sell your guns. Yeah. Yeah. Sell your guns. They're just guns.

I mean, it's just fun. But you've got the income, your debt-free house and everything. You're down to the last $38,000. You're going to get there pretty quick anyway. So I'm not. It's a different discussion. And would the same thing be for like a like I remember being on the show. I think I was with Ken maybe when we were hosting and a guy had a collector car that he just loved,

loved, loved, loved. And he's like, I could sell it and be out of debt today or I could be out of debt. Again, there's some situations like that. Some collector cars. Okay. My dad and I rebuilt this Mustang 500 hours when I was 14 through 17 years old. I'm 42. You don't sell that car. That's like selling your wedding ring yeah okay i wouldn't ask you to sell your wedding ring either to get out of debt

but uh i bought this car a few years ago and it's kind of fun you sell that car yeah yeah you know if you're in if you're in if you've got yourself into a mess because you've you know you gave up the right to own something like that because you'd already spent the money yes and so yeah so but there's some things that have some nostalgic value or if in this firearms collection was a musket from his great-grandfather that he used you know to protect the fort or what i don't know you know like whatever you whatever you come you don't sell that gun okay that's a family heirloom that's not a it's not a collection item unless it doesn't mean much to you and it's a family heirloom that's just sitting there and you're like you don't sell that gun because you'll wake up later and it'll mean something to you if it was that that is that

you know like well my wedding ring doesn't mean that much to me you're gonna regret that don't do that that's just that's gonna come you're you're a little bit too enthused about getting out of debt right now you need to calm down about one notch you know no i mean really you don't sell your wedding ring has slowed down well you don't the gazelle doesn't sell its wedding ring it just runs okay don't stop and sell your wedding keep running but yeah that's good it's a good that's a good now somebody's gonna send me little cartoons with wedding rings so mad at you they're people are so mad at you no but it's a good it's a good um because's a good, because I feel like getting out of debt

is not a balanced thing. You're not balanced when you're getting out of debt. You are doing everything humanly possible to get out of debt. It's that intensity and the more you sacrifice,

the faster you're going to do it. And there's that final 1% that's crazy. You play in that, yes, you plug in that small human element and say,

okay, what's worth it? Okay, since we're on the topic. There used to be a lady that had a newsletter back when there were paper newsletters that her way of getting money was she didn't ever buy anything. She went and got in dumpsters and got stuff out of dumpsters. Dumpster diving. Okay.

I'm not doing that. And I'm not recommending people do that. Okay. If you want to do it i'm not mad at you but that's like homeless people stuff okay i'm not dumpster diving because to get out of debt that's that last one percent of crazy yeah yeah and i'm not going in the last or like we're gonna sell our house i'm gonna put you up on 99 crazy but i'm not going into the last one percent and that's selling the wedding ring selling the car that your dad and you rebuilt for 500 hours when you were 14 that's uh selling a family heirloom or a special place

or in this case it's a short period of time that you're gaining yeah an uber short period of time and so it's it you know i'm not going to sell something that's hard to replace a lot of guns you can get another one depending on what it is but if you've got a unique piece that's probably one or you know one of 50 or something you're probably not gonna find that one again uh these aren't guns you shoot people these are collectibles and so um uh but that's you know that that's good yeah i think it's great it's a balanced approach and it's good hearing that perspective because it gives a lot. Because we all have something like that, right? It's like that human element.

So it's good. Great question, Lucas. Appreciate you writing into us, brother. This is The Ramsey Show. Thank you. Thanks for joining us, America. Rachel Cruz, Ramsey Personality, is my co-host. Emily is in Rhode Island. Hi, Emily. Welcome to the show.

Hi, Dave and Rachel. Thanks for having me. Sure. What's up? So my question for you today is I'm in the sixth year of my career, and I've worked at the same company all six years, and just found out that we are being acquired. So I'm wondering what to do with my 401K. I'm keeping my job.

Nobody's being laid off or anything. But I have a 401k that I'm wondering if I should move over to the new company's 401k plan or I can roll it over to an IRA. I would roll it to an IRA. Okay. Yeah, get with a SmartVestor Pro at RamseySolutions.com. Find one in your area that has the heart of a teacher. You'll select the mutual funds that you want in your IRA,

and when you fill out that paperwork, you will fill out another piece of paper that allows for a direct transfer. They will send that to your company. Your company will send the money directly to the mutual fund. Do not let them write you a check. Okay. The reason is they have to withhold 20% let them write you a check okay the reason is they have to withhold 20 if they write you a check and then you have tax problems because you have to put it you have to roll over 100 or you get into taxes but if you just roll it there's no taxes no money changes hands it just moves from the old 401k into your thing so it's under your control there's 8 000 mutual funds to choose

from and in your new 401k there'll just be a handful of mutual funds to choose from and they may be good ones but that's different if her company was bought it's bought which makes it just like she's changing jobs from a 401k standpoint okay and so her old 401k is freed up she's allowed to do with it what you want you can't move a 401k while okay and so her old 401k is freed up she's allowed to do with it what you want you can't move a 401k while you still work at a company but this company you're not working for anymore because you're working for the new company and so it releases your 401k and gets you going in the right direction so yeah that's exactly what i would do you want to do when you leave a company or when you have the opportunity to get hold of your money,

put it in your control because you have more options and you are in control. And then you can just start your new 401K with your new company, and you'll come out better off because you've got it out there. But you've got no taxes on this if you do the direct transfer rollover, and a SmartVestor Pro can show you how to do that. Sean is with us in cincinnati hey sean how are you oh hey good how are you dave great how can i help all right so we just started doing the baby steps correctly about six months ago we're in baby step three

and we so my wife is three months pregnant with i'm sorry nine months pregnant with our third son oh wow congrats Thank you so much. So we have 11,000 in our emergency fund right now. And Friday evening, they were in a car accident. Everybody's doing fine. Wow, that's scary. It was super scary. Nine months, much pregnant, a car accident.

Ouch. Yeah, yeah. It was intense. But everybody's good. Yeah, they're re-rendered um my wife's feeling better baby's fine the boys are fine but um so our car it's an o2 blazer well it has 114 000 miles four miles it's a nice car but insurance is only going to give us about $1,100 for it and I wanted to know how much to spend on a new car a new family car I guess. So you were driving an $1,100 car? Yeah I mean to us it's you know. No I'm not asking about

you I'm asking what the car would sell for. Uh the car so it was totaled out i know i got that part i'm saying before the wreck well the car would have sold for eleven hundred dollars um uh maybe i'm thinking like five thousand because we thought about selling it to upgrade okay stop a second because your insurance company has to give you the market value of the car. Okay. Not what they want to give you. Okay. You have a contract with them called an insurance policy, and they're required to pay you what it takes to replace the exact car that you had. So the question is, what was that car worth?

Actually, what could suit you have actually sold it for? Not what it's worth for you but if you put it in you know on trader.com our craigslist what would it have sold for so right at about five thousand i saw some at six thousand then why in the world would you accept eleven hundred dollars i i just i've never been in the situation have you already accepted the 1100 i have not good collision company called me and they said no i'm not taking i'm not taking 1100 look and here's the thing you have to make the case in logic not in feelings of why that car is actually worth that here's three other cars for sale on trader.com

that are identical okay this car is worth five thousand dollars if you don't pay me five thousand dollars i'm gonna get an attorney and sue your butt okay so i would go kind of hard nose with my insurance company um would i contact the guy who hit us, his insurance company at all? Well, they're the ones that are supposed to pay it. His insurance company should pay it. Okay. They should be making you the offer, not yours. Okay, perfect.

Yeah, they have to replace your car. You don't get to make money on the transaction. And, oh, I love the car, and I changed the oil, and I don't give a crap about all that. What would the car actually have sold for before the wreck? That's what they need to write the check for. Follow me? Follow you. Now, once we got that, now let's say we've got $3,000 or $4,000 in our pocket.

Let's go back to your question. Your question is what kind of car should we buy? Did you say you're in baby step two paying off debt? No, we're in three. Okay. How much money do you have? We have about $11,000. That includes your emergency fund?

That is. We're building up the emergency fund. Okay. This is an emergency. Yeah. Yeah. Yeah. I would take the insurance money and add $3,000 or $4,000 to it if I were in your shoes.

Okay. And so you're buying probably a $7,000, $8,000 car, something like that. Okay, perfect. And, Sean, I don't know if this helps. I just had a girl on my show talking about cars because this is like what she does. And she was talking about how the sedans that have been built, even in the last eight years, the back seat of them can actually now your trunk space is one thing but to hold three kids because i feel like there's this

thought out there once you have three kids you have to have an suv or you have to have a van and so even looking at a larger sedan just for the time period now once now once little ones out of a car seat you know or in a front facing car seat on that you may want you're going to want more room but for the time being, Sean, you may even look at a sedan because your SUVs and your vans are naturally going to be more expensive just to get you guys through this stage.

So that's just a thought. She mentioned that on the show, and I thought that's a great point that even some sedans still are. They're built big enough to hold three in the back. It's not going to be comfortable. It's not ideal. But if you guys need something for now,

and you can't find an SUV because they're just so expensive for that price range. And this is just until you, you know, you might drive this car six or eight months. Yeah. And then you may, you know, once you get your emergency fund back in place, you may save up and move up again a little bit in car, right? Right. And that's really, so this time next year, you're probably out of the car that you buy now.

Okay. That's probably where you're at what's your income uh about 60 okay all right yeah that's what i'm going to do in your case then now one more time i want to recast okay i'm not telling you to just be abusive to the insurance company or to try to take advantage of them i merely want you to get what your car was worth and if you'll approach it with logic like you had to go into court and prove to the judge that your car was worth something you'd have to have evidence and so like here's three advertisements in trader.com here's one on craigslist

here's what here's what kelly blue book says the car was worth um you know and here's how it was equipped and you're leaving this off i've done that in several situations and increased the settlement in almost every case because insurance companies are notorious for low-balling you okay on the settlement and so i'm again i'm not i don't want you to get ten thousand dollars for a car that's worth two that that's that's immoral i'm not asking to cheat somebody but i am saying you need to get what's due and the way to properly negotiate that is to show actual evidence and and then just tell them if you guys don't do this the judge is going to make you do it

and because here's the actual evidence and if i have to get an attorney those fees are going to be added on top of it so let's just do the right thing and replace my car. The guy hit my nine-month pregnant wife. You really don't want to piss me off here. This is The Ramsey Show. We'll be right back. Our scripture today is Proverbs 12, 11. Those who work their land will have abundant food, but those who chase fantasies have no sense. Abraham Lincoln said, give me six hours to chop down a tree, and I will spend the first four sharpening the axe. Ah.

Oh. There you go. There you go. Open phones at 888-825-5225 rachel cruz is my co-host today alex is with us in utah hi alex welcome to the ramsey show hi there david and rachel thanks for taking my call sure how can we help um so i guess sharpening the axe i'm here trying to plan for the future a little bit. I'm planning on buying a home in the next couple months. And I mean, I don't really have any need or desire to live by myself necessarily. And also like to have renters for some income as well. And I'm just trying to figure

out how to understand separating the kind of personal expenses and business expenses for my rental company, rental property, um, specifically with tithing. Um, I've heard you say before that, you know, for profit and profits for a business is what you would tithe on that you actually like are given to you as a person that you take out of the company. Um, but on the personal side, it seems like you typically tithe just anything that's coming to you as your income and so I guess I'm just trying to understand how you might separate that out with something like a property that kind of serves both the personal purpose as well as a business purpose. I'm not sure I mean if you rent out to roommates, what your expenses that are deductible are, if you're living in another part of the house.

Yeah. So, I mean, it'd be things say you're renting out 20% of your house, then 20% of your HOA fee would be deductible as an expense, I guess. And so I guess you would probably just keep a little spreadsheet on that, honestly, and say, you know, I'm charging whatever, $1,500 or whatever you're charging, and here's my expenses and here's my net profit per month, and that's also going to be for your taxes as well to calculate your income tax. And then with other expenses that are deductible, whether or not it's a business, something like your mortgage insurance, your interest, property taxes,

with those kind of things that normally if it was just my own house I would tie whatever my income was and then I'd pay for that anyway and then I would just consider that the same way yeah I always just say whatever is taxable or whatever whatever I can charge off as a business expense you know creates the taxable income and your mortgage interest is not deductible uh in terms of against your uh as an well the interest is deductible the payment is not deductible so if you want if you want to charge it off the charge off part of it and you want to keep it for tax purposes that's an easy way to to calculate your tithe if you're being real technical about the tithe um honestly in that situation if i was

doing all that calculation just to figure out the tithe yeah i would just wet finger in the air and then add some to it because you can't mess up being too generous and so i didn't fool with the math but if you're going to do all the math for tax purposes anyway then just use that number for your tithe your taxable income before you pay taxes on it is what i tithe on and uh you can do a bible study a lot of different ways and argue about this and all that and i'm not going to argue argue about it. God wants people to be generous. He wants those of us that are followers of Christ to be giving and steadily giving, and a tithe is an indicator of how to do that. But I don't spend a lot of— You're not legalistic about it.

I don't get legalistic about it. I give a lot more than a tithe to to to uh local church and to various ministries and various things through our foundation so i'm not worried about you know whether i made it or not you know kind of thing and and so um because i just just because i believe generosity is a spiritual principle uh but but if you want to do all the calculation you know just to make you know to feel feel like you're doing it, there's nothing wrong with doing that. It's not a bad spiritual exercise to do that, but you might as well use it for your taxes anyway if you're going to do all that.

Anthony's in Houston. Hey, Anthony, welcome to the Ramsey Show. Hi, how are you guys doing? Great. How can we help? So I've just got a question. I don't really know where to go from where i'm at i don't have any debt i've got two credit cards but i don't want to cancel

because it'll kill my credit and i don't really have a problem just letting them sit there um i mean what should my next steps be would it be down payment an emergency fund or uh yeah should i work it yeah it's a good question. Well, number one, you know, we're not that concerned about the credit score, honestly, Anthony, because you can still get a mortgage without a credit score using manual underwriting. And then most of the time, why you need a credit score is to go deeper in debt. So we're not too worried about the credit score over here. So we would advise, and I would i would say just yeah i would go ahead and just cancel it out cancel the credit cards get them off the plate um and then start saving for your fully funded emergency fund of three to six months of expenses you're going to

keep borrowing money anthony no no one you need a credit score for okay fair enough and my girlfriend who I do plan to marry has enough saved up to be our emergency fund. So could I take advantage of that and just go full board towards down payment on a property? I would just start saving. I would save for your own emergency fund. And then when you guys do actually get married, then you guys will have a lot of money saved. And you can allocate some of it to an emergency fund and some to it over the down payment but you don't have to decide that today just have a big old pile of money yeah i would i would keep i mentally would keep it separate anthony um from her just to say hey here's my here's my baby steps what i'm doing she can do hers and then when you guys get married you can buy in it all and then you'll have a huge jump start which is awesome because you'll

probably have your fully funded emergency fund and a great down payment once you guys get married mark is with us in daytona beach hey mark welcome to the ramsey show hi dave hi rachel thanks for taking my call sure what's up uh dave i'm a federal employee i'm an air traffic controller for the faa and my wife and i are baby steps four five and six i contribute to the roth psp um i don't know if you know or not that air traffic controllers are required by law to retire at 56 and yep so in the government's infinite wisdom they won't let me touch that money until i'm 59 and a half right um high stress job now yeah do what i said a high stress Yeah, that's what I hear. So as of right now, we have a pension.

I'm eligible to retire in a little less than 11 years. I'm forced to retire in a little less than 17 years. I don't want to say that I'm banking on having that pension. Yeah, it would be nice. But do you have any other recommendations of somebody in a unique situation such as myself? Yes. As of not maybe putting some money towards traditional as opposed to all of it towards the rock. It's called bridge investing, and it's investing to bridge between 56 and 59, and to have a nest egg that will do that and it's just simple mutual fund investing

uh so we tell folks put 15 away and maybe step four you're probably aware of that right right in your case i would take 10 of that 15 how much have you gotten your tsp now uh i try not to look at it as a late. I think probably between $180,000 and $200,000, and then we have another $100,000 or so. And you've got 17 years to go. Yeah, yeah. Okay, so you're going to have $700,000, $800,000 in there if you don't add anything to it. If you're in the C, the S, and the I like we teach people to do. And you're going to be adding to it because I'm going to tell you to keep putting 5% of your income in there.

But I'm going to take 10% of your income and build a really nice nest egg outside of the TSP and get in touch with one of our SmartVestor pros, and they can help you do that. There's some processes and mutual funds you can use that have just come out in the last few years that allow you to invest in capital gains-oriented, low-turnover turnover type mutual funds

where you don't pay taxes on the growth unless you pull it out. And so you can just roll it in, let it grow, let it grow, let it grow, let it grow. You're looking for those types of things. You need a tax advantaged type mutual fund, low turnover ratio type mutual fund. Talk to one of our SmartVestor pros and they can help you do that. It's called Bridge Investing to do this. Good call, Mark. Good call.

And thanks for keeping us safe in the air. That puts us out of the Ramsey Show and the books. 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. If you want to do your debt-free scream live on the show, visit ramsaysolutions.com slash debt-free scream. We'd love for you to come to Nashville and tell Dave your story. That's ramsaysolutions.com slash debt-free scream.