The Ramsey Show - App - Should I Use Mutual Funds to Pay Down My Mortgage? (Hour 3)

Episode Date: June 8, 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 on the show will be Chrisris hogan ramsey personality number one best-selling author of several books his latest number one everyday millionaires and uh absolute huge blockbuster book open phones at 888-825-5225 as we talk about your life and your money 888-825-5225 jason is with us in Colorado. Hi, Jason.

Welcome to the Dave Ramsey Show. Hey, Dave. Thank you. I was hoping you can help me with a financial question. I'll try. So I got a house that I'm selling next month. We'll be able to take that profit, pay off our rental, and come walk away with about $70,000 in cash.

So we want to purchase a home in probably about three to five years, and I was wondering what to do with that money for a short-term investment. Yeah. What's your household income? $90,000. And why are you waiting three to four years to buy? So currently we're living in my mother-in-law's house. She needed the help, so we moved in there.

It's kind of the perfect timing because the housing market is crazy right now to sell. So then after that, I think probably three to five years, we'll just go out and pay cash for a house once we sell the rental. So the plan is park this money, sell the rental in three to four years, and take care of your mother-in-law in the meantime, and that gives you a free place to live. Yep. Okay, and you're making $90,000.

Okay, I like your plan. Jason, are you going to be able to survive three to four more years? No, no, I'm not insinuating anything. I'm just saying, that's a long period of time, my friend. Are you going to make it? Yeah. She's been living with us for about a year and a half now at her other house. Okay.

I came over here to fix her house because it's been sitting vacant for about two years. Yeah. And then we moved into this house. Okay. So things are going well. Okay. That's good. That's good.

All right. That's good. You're a good man. Thank you. All right. So, Okay, that's good. That's good. All right, that's good. You're a good man. Thank you. All right. So, well, here's the thing. There's not really a good middle ground to park money, like a medium-risk investment that I'm comfortable with,

that I personally do. And I don't recommend anything on the show. We don't recommend anything that Chris doesn't do or I don't do. In other words, we don't have some plan that's good for you, but we're too good for or not good enough for or something like that. So there's two options. One is make no money on the money and park it in a money market. And so you're going to make 1% and you're not going to lose any money. The other options, park it in something like a, uh, something like an S and P 500, just a simple, like a Vanguardanguard s&p 500 a no load

and just let it sit there now it'll do what the market does so if it made 10 you'd make seven thousand dollars if it lost 10 over three years you'd lose seven thousand dollars if you did ten percent a year that's probably you know so we're talking about 20 30 grand upside and uh you could have a 30 grand downside but it would be an unusual downside you know it'd be like you hit like if you put it in in january and then covet happened and you were having an oh crap moment right. That'd freak you out. The market's going good right now. The market's great today, and you'd be right back. We told you not to jump out, and so we were right.

Yeah. And so it's right back, but, you know, let's say that you were trying to buy. You wouldn't have been because of COVID, but let's say you were trying to buy a house when that market was at the bottom. You would have been going, I don't like Dave Ramsey's advice to park it in a money – I mean, probably put it in a S&P. So you just – you've got to be looking – you and your wife have to talk about the risk tolerance and say upside we might make $20,000 to $30,000.

Downside we could lose $10,000 to $20,000 if we're not patient. Now, if you're patient patient usually these things will come back and you wait let's say a market did dip and you just have to wait a little bit to buy your house right yeah so with that in mind i'm okay with a shorter window than five years parking something in an s&p 500 but your risk tolerance has to be there because it's very real that you could actually lose some of the money. So if you told me different numbers and you said I'm making $50,000 a year, I don't have any other money than this money. This is my precious money.

I've been saving it for 10 years. I'd put it in a money market because I wouldn't let you have the risk. Okay. Now, I do have a question on backdoor IRAs if you have time. Sure. Is there a maximum amount that I can put in for a backdoor ira and maximum number of times or is it once per year or it's once per year and it's the same amount as any ira okay six thousand yeah and so uh and you do it you do a an after tax traditional so there's no tax. You've gotten no tax benefit on it, so when you roll it to an IRA, there's no taxes, or when you roll it to a Roth, I'm sorry,

there's no taxes on it. And I do one every year with Sharon and I both. We both do one every year, and it's a good way to get money into the Roths. Dave, let's back up here because you have really been clarifying, especially during this COVID situation, the importance of understanding the difference between saving and investing. Investing is five years or longer. And so that gives you that period of time that if there is a market downturn, it gives it time enough to be able to come back. And so in that mindset, if you're trying to do something within a two to three year period of time, you've got to think of that as you're saving toward this, this thing. And I think that's really important to call out for people because, you know, you have

to be aware of your risk tolerance. 90% of you listening, when you have an under five year window, you just need to put in a money market. Right. Because you can't stand it if you lost 5 000 instead of made 20 right it would drive you bananas now if you had 65 000 in your account instead of 70 to keep you from buying a house no no that's right but your brain goes on you know steroids it goes but your your head blows up because you lost money right and then you go i'm there put my mutual fund i lost money back in alt 20 you know and it's all this crap because

you didn't have a right window if you leave the money alone five years 97 of the five-year periods in the stock market's history have made money so if you put it in at the best time or the worst time almost every time you've left it alone five years you would have made some money now maybe a lot maybe a little whatever but so the five-year window is a very safe analysis based on historical data that if you leave it alone that long now when you start backing down to three years it's only about one in or about two out of three times, 67%, that you make money. Now, that's exactly any 36-month period. Now, here's the thing, though.

Let's say you got to the end of that, and the time was March, okay, of this year. And the thing dove. And the Dow was at 30,000, right? And it dives down to 19,000. That's right. Well, you would just not go 36 months. You'd go 40 months. And today you'd be back at 27,000, and you made almost all your money back.

So, you know, common sense comes into play in statistical analysis. Right. Absolutely. Or it should. Yes. But it doesn't always. But people are looking for some nitsy reason to not do things. So you're okay as long as you've got a little breathing room,

as long as there's not a hard and set date in concrete. Yep. This is The Dave Ramsey Show. Most people's money problems come from not paying attention. That's why before I spend a dime of my money on something, I do the research and make sure it's going to live up to what it claims. Recently, I got a great pair of sunglasses from a company called Shady Rays. When you're looking for sunglasses, it feels like your options are limited. Name brand sunglasses cost too much and the cheap knockoffs are ugly and really don't protect your eyes.

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The show's called The Dave Ramsey Show, where we talk about your life and your money. Alex is with us. Alex is in New york hi alex welcome to the dave ramsey show hi dave how you doing great how can we help uh so i've been listening and slash watching your show since i was a little kid riding around in my granddad's car um and i have so so my financial situation is this i make make, between my wife and I, we make about $102,000 a year, and we don't have any debt other than student loans. I don't keep credit cards.

I don't have a car. Like I said, I rent. I don't own a home. But I'm wondering, so actually I'm enrolled in a forgiveness program because I'm an attorney for the city, and so I don't have to make payments, and then at the end of my period, as long as I stick with my job, the remaining balance gets forgiven. That's the 10-year program? That's right.

Yeah. Have you read the statistics on that? I haven't. 97% are not forgiven so far okay it's a joke it was a scam so i wouldn't set my life up on that so how much student loan debt have you got so i uh because like you know i'm a lawyer i went to law school i have 131 Well, I have $131,000. Okay. And what's your household income? $102,000 a year. You said that. I'm sorry.

I'm sorry. Well, I think Chris and I would both agree. You just get about the business of paying it off. Quickly. Quickly. Right, Chris? Yeah, I really would. And, Alex, here's the beauty of it, buddy.

You know, your income obviously is going to increase each year, you know? And so, yeah. And so in that mindset, what you don't want to do is be chained down to an area. You know, you might get a call for a job in L.A. or a job in Florida, a job across the street paying three times more. Exactly. So you've got opportunities. I just wouldn't chain my life down because of some forgiveness. And you being got opportunities. I just wouldn't chain my life down because of some forgiveness. And you being an attorney can appreciate all the nuances and details. And they say the devil is in the details. And definitely in this scenario, it is. So looking at it, you've got to make some life decisions. You know, the beauty is, is that you did listen

to your grandpa. And as you said, you've been listening to Dave a long time. You avoided all the other debt, but you got this one. And this is the one that's holding back around 46 million americans to the tune of 1.7 trillion dollars so if i'm you i'm going to stake claim for my life be intentional about the direction i'm going and i'm going to make decisions and i'm going to start chopping this debt down one loan at a time yeah i'd be done about two years yeah you just roll up your sleeves and knock it out get out of your life and then your whole perception changes on your career path and on your track otherwise you're sitting around stagnated with these uh washington dc colored golden handcuffs um that have that have hold holds you into maybe into a job that you wouldn't have otherwise stayed in.

And it does change things. Nicole is in Montana. Hi, Nicole. Welcome to the Dave Ramsey Show. Hi. How are you? Great. How can we help?

Okay. So my mom is trying to convince us to buy the piece of property to the south of us, but my husband and I are both thinking that we can't afford it because of what we already owe on our own mortgage. So where did your mother come into play on this? Why has she got an opinion? Okay, so... Is it her property?

No, she likes to be very controlling, and she thinks that the return on the property, if we turned around and sold it in a couple of years, we would... Well, then she should buy it. That's exactly what I'm thinking. Tell her to get her checkbook out and write the check. How old are you guys? I will be 40 in November. You are full grown.

My husband is 35. And he's full grown, too. Yeah. Nicole. Yeah. Nicole. Yeah. Listen to me. Because I also want to go back to school, and we have the money for me to do that, but then we wouldn't have...

But then you couldn't do what your mommy said? Yeah, but I don't want to be my mom. No, I said you couldn't be what your mommy said to do then, if you use the money for your dream instead of her dream. Exactly, because I'm tired of living the way my mom and my dad did. And right now we make about $60,000. But what we owe on our house plus what that would be scares the bejesus out of me. Okay.

So you already knew what to do before you called, right? Kind of, but we also don't have like a, I mean, we don't have like a three to six months emergency fund if I use the money to go to school. Well, we're not going to do that, and we're not going to buy the property. So we need to save up some money. What's school cost? It's only $8,000. I want to go.

How much money do you have in savings? How much money do you have in savings? How much money do you have in savings? We have about $9,000, but then we have about $5,000 in our checking account. Okay. So you have $14,000. You need $8,000 plus an emergency fund. You make $60,000. But if I quit my job to go to school, then we only make $40,000. Yeah, but you didn't quit your job yet until you had the money to go to school. So $8,000 is the total cost of school.

What kind of school are you going to? I was going to go back to school to get my LPN. Okay, and how long does that take? A year and a half to two years. And it only costs $8,000? Yes. And how much more $8,000? Yes. And how much more will you be making if you get this? Oh, it's worth it.

That's a good move. The average pay in Montana for that job I looked was about $40,000. And right now I only make about $18,000. That's a good move. It's a good move to get this education because it moves you up in income and then you can buy land or whatever you want to do later. We've got to pay for it. So you can, it only costs you eight. Is this an evening study or is it full-time study? No, it's an online class through MSUB. And why is it you have to quit your job? My kids also got told they can't go to

the school they were going to last year, which, because I don't work in the city I live in. And so my kids were going to school in Billings, and I live in Laurel. And my daycare is in Billings for my 2-year-old. Okay, I'm so confused. I thought you said you had to quit your job to go to school. I also, my kids will your job to go to school. I also, my kids will now have to go to school in Laurel, which makes it really difficult to get to my job on time.

And I'd have to pay after-school care for my boys. But that hasn't got anything to do with going to school, other than you just have trouble. I mean, get to school, or get to work on time, not get to school, because school's online. Mm-hmm. Okay. All right.

Well, here's the thing. You and your husband need to sit down and decide what you're going to do. I don't think this land is in your future. No. I think this class is in your future. And you have to go through, it sounds like you've got 18 really tough months. Yeah. In order to move forward. To move forward a lot, Dave. dave yeah i mean this is a

no-brainer price to win kiddo that's right and here you and your husband you can hold your freaking breath for 18 months that's long day get it done okay well attack not hold a breath well you can attack i mean you can you can do almost anything for 18 months no that's true but her and her husband need to sit down and have a unified statement about how mom isn't running our lives well that's that's number we're shutting that down that's that's yeah and opinions are like yesterday's everybody's got them yeah that's a nicer way of saying that but um thank you the uh um yeah that that that's that part the boundary issue is a no-brainer no she doesn't get a vote in this. Yes, you do need to go to school.

And yes, you need to pay a price to go to school. And the price may be you're a little tired. Oh, well. But can't you work and go to school at night? I did that with grad school. The school's online. It's inconvenient for her to work and get the kids there. That's got nothing to do with school.

No, that's totally different. You've got to solve that problem anyway, kiddo. But you can't just go, I'm not going to work anymore. Because you need the money. Right. And you need an emergency fund in place plus $8,000. And so you guys are going to work extra to get to that point and then jump in and get your LPN. I think it's a really, really good thing.

So, hey, thanks a bunch. Appreciate you joining us. Open phones at 888-825-5225 this is the dave ramsey show So so Families all over the country are discovering a faith-based and budget-friendly way of meeting health care costs, whether they're anticipated or completely unexpected. For example, take the Olcheski family from LaGrange, Texas. Jeff and Carice had just celebrated the birth of a new baby boy. Shortly after, they had another expensive medical issue come up. They could have faced a huge financial setback. But thanks to Christian Healthcare Ministries, the Olcheskis were spared from a ton of medical bills.

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CHM is a proud sponsor of Dave Ramsey Live Events. If you're listening to this and you're a business owner or you're in the HR world, pay attention here for a second. It is no secret that there's a student loan crisis in our country that's hurting Americans. $1.7 trillion in student loan debt. That's with a T. That's 8 out of 10 workers. These are people on your team if you are an employer. If you're in HR, you're an owner, you're a leader.

And they're living paycheck to paycheck. And with everything going on right now, these problems are following your team to work, and it's costing you money and killing your business. Enough is enough. There's a lot of workplace student loan programs, in air quotes, out there trying to make money off of your people's financial situation. These are wolves in sheep's clothing. It is your job as the employer to keep your employees' best interest in mind

if you look at a student loan benefit. You've got to weed out the predatory crap. To get you started, we're giving away our guide to workplace student loan programs to shed light on the predatory programs and show you what you should be looking for in a benefit for your team. By the way, we don't offer that benefit. We're just educating you on which ones suck and which ones are real because under the cares act you can now write off and the employee is no longer taxed on the student loans on the student loan forgiveness so you used to if you gave them three thousand dollars they had to count that as income and now under the cares act you can give them three thousand dollars to pay

off your student loan or ten thousand or whatever you choose to do and you get to write it off as a business expense they don't count it on their taxes this is pretty sweet yes it is dave and that is um that's a major shift and essentially what you're doing is is giving the business a credit for doing that and wanting being able to help their employee, but the employee also has the opportunity to throw more money at the debt, and that's always a positive. So if you want to learn about this guide to workplace student loan programs, go to smartdollar.com. That's our corporate HR branding, smartdollar.com, and you can get this free guide to workplace student loan programs for you HR people, you leaders out there in business. You can learn about what to do, what not to do, how not to get messed over because there's a bunch of these companies have jumped in,

and they're just trying to figure out a way to refinance and make money off of them and everything else instead of just simply getting the student loans paid off, which is if you want to help as the employer, that's what you want to do. No, you really do. And I want to talk to these HR professionals out there. Listen, you are someone that has the heart of a teacher. You are somebody that cares about the people on your team. Help them right now, especially in this day and age. You know people's stories.

You know what's going on. Do me a favor. Step in, engage them, talk to your team and find out. If you've got people, I promise you, you've got eight out of ten of them that are struggling with money. Yep. And they're struggling. Listen to me.

The people you know, their families are struggling. So you have an opportunity to do something a little bit different, and that's engage the problem with a solution. Go check out smartdollar.com. You can learn more of how to help your team. Brandon is with us in Louisiana. Hi, Brandon. How are you?

I'm doing fine. How are you, Mr. Dave? Good. How can we help, sir? Yes, sir. My company that I work for, they contribute 2% of our hourly wages into an annuity, and I was just wanting to get some more insight and possibly be able to present them with something else that would, if the annuity plan is not the best thing for our, in the long run,

if we could present them with something else that possibly would make us more money. Okay. Well, how big is this company? It's huge. The company that I work for is Maxim Crane. It's a crane company. Okay. And so how big is huge?

I mean, 10,000 employees? No, so it's global. I mean, as far as how big, I'm not sure, but they're from east to west coast. I mean, they're huge. Okay, not to be smart, Alec, but what makes you think you're going to make a proposal to HR they're going to listen to? Probably none, but I figure somebody would have to try to do something. Yeah, do you have a 401K?

Yes, sir. No, sir, we work through a union hall. Yeah. And we have a pension and an annuity and i was just like i said i was just trying to really get true i was just trying to get more insight on the annuity not saying that they would change their ways to go you know to something different gotcha but well i suspect the is the uh uh the annuities run through the union then isn't it uh yes sir yeah so that's really who you're talking to yeah yes sir yeah good luck with that yeah buddy uh but the yeah so there's two kinds of annuities there's fixed annuities which suck

all the time and uh that's basically a money market rate of return with an insurance company, and it's trapped with all kinds of penalties and surrender charges if you try to get it out early. Then there are variable annuities, which I'm guessing is what this is. Not many people sell fixed annuities anymore except just straight-up insurance guys. And, of course, insurance guys can sell variable annuities as well, but a variable annuity is a mutual fund inside of an annuity. And some of those are good and some of them aren't, depending on the fees that are associated with them. And it's redundant in this situation because it's in a retirement plan anyway. And so they could have actually just increased your 401K contribution, and you'd have been much better off,

and you'd have had much better off and you'd had much better options right to get to but i can't tell you whether the annuity if it's a variable annuity is a good one or not without actually knowing the investments inside of it yeah and here's the thing dave there's a couple things i love number one you know that brandon your mindset on wanting to learn more information uh you're going to need to start at the union have that conversation you got a couple things at play here long-standing relationships and well the union, have that conversation. You got a couple things at play here. Longstanding relationships and, well, the union's preference and goals. And so have a conversation, gain some insight in what can be done, and keep having dialogue. But Dave, you know, I remember years ago working in the banking world and investing world, and people would come and they'd ask for annuities, but typically these were the people that were

risk averse. They were scared of losing any money. Yeah, and there is a place for variable annuity in that because some of the better variable annuity products will give you a guarantee on principle. So if the market turns down, you don't lose it as long as you leave it alone a certain number of years. Right, right. And they'll give you a guarantee on a minimum, a floor rate of return that you're going to get. And so if you're risk averse, you know, even though you might be paying an extra fee, then you're going to, you can come out and you can do away with a couple of things on risk there. And you can name a beneficiary.

So it has a nice, it passes outside of probate, has a nice little estate planning benefit. So not all variable annuities are bad. The good ones are actually pretty good. Right. But the problem is just what all is out there and what this union has gotten itself tied into. And you've just got to find out what's in there, what the fees associated with it are, and how much, what's the rate of return after fees. After the fees have been paid, what's your rate of return? And that will tell you how much, you know, what's going on.

Costs, yeah. Yeah. Rick is in Minnesota. Hi, Rick. How are you? I'm doing well, Dave. Thanks. How are you? I'm doing well, Dave. Thanks. How are you? Good. How can Chris and I help?

Yeah, so my wife and I are focused on eliminating our mortgage. It's our only bet, and we have about $89,000 left on it. And my wife's father had purchased some little funds for her in her suit. She was going to

use them for college, but she ended up not needing to do that. So we still have them. They're in her name now. Their value is about $53,000. So I'm just wondering if we should be considering selling the work when their value is enough to eliminate the mortgage. I don't know why you have to wait until it is. What's your household income? Right around $150,000. And how much other investments do you have not in a retirement plan? Nothing.

That's the only thing that's not in a retirement plan. Yeah, correct. How much money in savings in your emergency fund? About $35,000. Okay. A little over six months. If I woke up in your shoes, I would write a check for the amount of mutual funds and put it against the mortgage today,

and then from there I would just attack that mortgage. I'd be debt-free in a year. Yeah. Oh, absolutely, Dave. Not even blinking. Yeah. Get after it. Yes.

Knock her out. This is The Dave Ramsey Show. Hey, folks, there's literally never been a better time to try online grocery. My friends at eMeals make it incredibly easy for you. eMeals creates a shopping list based on the meals you want for the week and then directly sends it to Walmart, Kroger, Instacart, Shipt, or Amazon Fresh. Your choice. Head to eMeals.com slash grocery. Find what delivery and pickup providers are available in your area. Try eMeals free for two full weeks. That's eMeals.com slash grocery.

Our scripture of the day, Proverbs 18, 15, An intelligent heart acquires knowledge, and the ear of the wise seeks knowledge. Benjamin Franklin says, An investment in knowledge pays the best interest. Right now, folks are searching for answers to problems that they never thought they'd have. Problems like, where's my next paycheck coming from? How do I get my health insurance if I'm unemployed? How do I invest for my future when I'm stuck paying for my past? How do I get an emergency fund? What do I do next? People are everywhere looking for help and guess

what? You can provide that hope by hosting a Financial Peace University class. And regardless of whether you want to do it online or you want to do it in person, depending on your state and how open you are, but the Financial Peace University online virtual classes are going big. You can do Hope from home. Yeah, pretty easy. And we do all the teaching, Chris and me and Anthony and Rachel, and then the coordinators, whether it be online on a virtual class or in person,

have the pleasure of leading people through the process. And it's really rewarding. There's no better time. If you want to lead a virtual Financial Peace University class and help others, go ahead and text the word LEADFPU, one word, no spaces, LEADFPU to 33-789. That's LEADFPU to 33-789. This is the Dave Ramsey Show.

Chris Hogan is my co-host today on the air. The phone number is 888-825-5225. Daniel's with us in California. Hi, Daniel. How are you? Good, Daniel. How are you? Good, Dave. How are you doing? Great, man.

How can we help? Hey, so first of all, I just want to start with thanking you for all the peace you have brought to my wife and I. We've discovered you guys about two years into marriage, and man, what a different living right makes. I just want to thank you for that. Well, thanks. Good job. I'm proud of you, Hero. So I'm going to start with the basic question, and then I'll provide you with the information

you need to help me answer this. So the question is, should I relocate to Minneapolis to potentially save my job? That's the question. So I'm currently furloughed. I'm one of five managers in a department of about 15. I've known that we are overstaffed in management for quite some time. The rest of my office is back except for me and three other managers. We're still furloughed, and we don't know if we're going to go back to work or not. So that's the basic question. And they offered you a move to Minneapolis in order to keep your job?

Did they tell you that? No, no. This position's actually been posted for quite some time. My job is outdoors, so obviously Minneapolis is quite cold. This position has still not been filled, and I have not applied. What do you do? I'm a buyer for a national large car company, so a senior buyer. Okay.

All right. Oh, so outside you're going to auto auctions? Precisely. Okay. Yeah. All right. I, so outside you're going to auto auctions? Precisely. Okay. Yeah. All right. I got you. Yeah.

Couldn't figure out why you were outside for a minute. Okay. Took me a second. So what do you make? Our household income is about $85,000. Okay. We are debt-free except for the house our house is worth about

$350 pretty conservatively and we owe $153 where do you want to live? if it were my dream I would like to live like Pacific Northwest area so this is definitely not in our we have no family there.

We have no reason to move there other than just preserving my career. Yeah, you'd be going the wrong direction. Wrong direction, and I've lived in California my whole life. Not to say I can't adapt. I definitely can, but going from here to Minneapolis would be – temperature-wise would be a huge transition. Right. So as you right now are furloughed, Daniel, what are you doing to bring in income?

Right now I am just searching for a job. I've been doing that for about three, four weeks. I haven't landed anything yet. Okay. We are on unemployment. That's helping, but I know that's coming to an end here pretty pretty soon so okay yeah i think i think instead i would broaden my options i would get on the ken coleman program of looking for a job jump on ken coleman.com and download his interview and resume

preps and also you know uh hold on we'll send you a copy of his book the proximity principle so what i would do is analyze and i think this is an opportunity for you to stop. A lot of times everyone does this, and not just you, it's everyone. You take a job that's handy. It's available. It's there. And a friend of yours works there and says they're hiring. And you go over there, and this gives you a chance to pause and go wait a minute

what do i really want to do yeah um i don't want to live in minneapolis i heard you say that pretty clearly i want to live and what do i want to do with my life that i could provide an income for my family and live in an area that is acceptable to me and um you know what do i want to do and then go invent that and go be that and go become one of those and this is a you know you you weren't looking but now you are that's right and dave i'm going to tell you in order to do that you're going to have to beat back some things you're going to beat back fear because it's fear of the unknown. You're going to have to beat back lazy, to be honest, because you're going to have to be proactive and make this your part-time job on the weekends and in your downtime. And you're going to have to also reach out and be social. What I mean by this, Dave, is so much is about who you know,

not what you know. And you need to network. Well, it's not a matter of getting somebody that is all powerful, but they can just get you in the door. That's what Ken talks about with the proximity principle. That's exactly right. They don't have to be. I mean, really, even if you know Sharon Ramsey, it just gets you in the door here. Then you've got to get an interview. Because we have never one time in the history of our company made someone in leadership hire some one of our friends no or hire a connection so we don't

play that card most companies don't most people don't they're too smart to do that's a bad idea but instead they get you in the door with an idea with a place to be with what you want to do and you got to figure out what the steps are to become one of those and then then I would, you know, I think it's time for a change, dude. I'm not sure you're going to be buying cars anymore. Or at least not with that company. That's what it sounds like. Yeah. And you know what?

That's not a bad thing, Dave. I think, you know, it gets people thinking and dreaming again, which I think is a positive. And again, finding a job, finding something while you're still looking is okay. It's easier to find a job when you've got one. Jim's in Missouri. Hey, Jim, welcome to the Dave Ramsey Show. Thanks for taking my call. Sure.

I took your course back on the 14th of January, and I'm at Baby Step 3. My question to you is I'm trying to build my second emergency fund I'm at eight thousand two hundred and five dollars right now with an emergency fund number one of a thousand dollars I also income is that included in the eight thousand no no when you get to baby stuff when you get to baby step two My household income is around... Is that included in the $8,000? No, no. When you get to Baby Step 2 or 3, you combine them. So you have $9,205 towards your fully funded emergency fund of three to six months of expenses, right? Correct.

Okay. monthly paychecks that come in depending on three times, the income is like $13,506. If we go six months, it's $27,012. My question to you is I get retirement from Social Security of $1,742. The multiple is not of income. The multiple is of expenses. Of expenses. So what's it take to operate your household a month?

Right now your income is $4,4200 a month, something like that? Yes, yes. Okay, what can you live on if you had no income at all? It's not to say you're going to lose all this income. That's not the equation. What could you live on if you had no income for a period of time? I really don't know how to answer that question. Okay, that's the one you come up with and multiply that times three or six.

Chris Hogan, good job. Thank you, Dave. This was a pleasure as always. That puts this hour of the Dave Ramsey Show in 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. This is James Childs, producer of The Dave Ramsey Show.

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