The Ramsey Show - App - Should I Use My Retirement Fund To Pay Off Debt? (Hour 3)

Episode Date: February 1, 2021

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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, Anthony O'Neill, Ramsey personality, number one best-selling author and host of The Table, a very popular YouTube show that we have now just also started putting out as a podcast two weeks ago. And I actually listened to about half of today's podcast on my walk this morning. And The Table is a thing where you guys come together and you bring different people to the table for discussions on different topics.

Yeah. And you're a good interviewer. Oh, man. Learning the best from Ken Coleman. Yeah. Yeah. Ken's been doing a little training, but it's working. I mean, you're good.

I was listening this morning. You're pulling ideas and probing deeper out of the panel you've got. The panel you had today is on Black History Month. Yes, sir. And actually, that's how the whole thing started, isn't it? It is. It is. It started last year of just really... Before all the racial History Month. Yes, sir. And actually, that's how the whole thing started, isn't it? It is. It is. It started last year of just really.

Before all the racial blow up. Yes. And I'm thankful it did happen before then. But just really having a conversation, just understanding. You were having a conversation before everybody started telling us to have a conversation. Yes, sir. I really was. And so I'm grateful, man.

You know, this this week's podcast is just really just asking some questions. Just really get into the minds of other young African-Americans and older African-Americans, some pastors and young millennia millionaires from Michonne and Pastor Weston. And so just a great conversation. Then last week, Dave, we had Matthew McConaughey. And that was a great interview because I was kind of like a celebrity stokes for there for about a little bit, you know, because one of my favorite movies is Lincoln Lawyer. So to have him and then followed by this week with the Black History Panel, I'm just grateful to have the podcast. Well, it's a different discussion. You can ask the exact same questions of the exact same group at that table on racial issues a year later and get completely different answers now. Absolutely.

There's a different level of, I don't know, people have spent more time thinking about it, thoughtfulness. Yeah. Different level of anger. Yes, yes, yes, yes. Different level of pride. Yeah, yeah, yeah. You know, I was thinking that when I was listening to it walking this morning,

because last year was so open-handed and so amazing. Yeah. You know, I was thinking that when I was listening to it walking this morning, because last year was so open-handed and so amazing. Yeah. And these guys are so articulate this morning. It's a very good panel you put together. Very good. Very good. And here's the thing, you know, it's six different people with six different opinions. And age groups.

And age groups as well. Yeah, 18-year-old up to probably, I guess, Mignon. Mignon. And Mignon's what, in her 50s probably? Lates late 40s yeah late 40s and so uh no you're right dave yeah yeah yeah young young 50s i'm sorry uh but she she's brilliant and even here's the thing some of the things on there i was like we could talk more about this but you know i really want to give everyone just the space to say what they were thinking what they were feeling um and it's very real a little raw very real and that's the whole point of the podcast because we don't just talk about racial stuff i want to be make sure that's very

clear well yeah this week is black history month so you're covering it that but that's how i got the whole thing got started then you've done everything i mean you've had everybody on on all kinds of subjects yes uh. Dating. Yes. Relationships. Success. Money. Yeah. Obviously, we cover money.

Yeah. Absolutely. Yeah. And the whole thing of this podcast, Dave, is to have a real relevant and relatable conversation around relationships, finances, and success. That's the main heart for me. I want to help young people, not just young people, but all people really get the true mindset on how to really become wealthy, how to build true wealth and how to build healthy relationships. That's the main goal of the show.

Yeah. Yeah. And certainly the racial discussion fits into that. It does. It does. Without a doubt. That's fair. And I got to say, I mean, I was one citizen on the air.

I thank you and our team for even supporting me and allowing me to do that because it's a conversation that needs to be had and off air you and I have some good healthy conversations and and I just love that we can do that here um and put that out there to just really bring love and hope uh to both blacks whites hispanics jews you name it yeah yeah absolutely well that's what it's supposed to be yes sir I mean and just, you kind of got to work at it. Yeah. Because you got to work past your own junk. Yeah.

You know, and your own background, your own upbringing. Yeah. Everybody does. Yeah. And because you got your own thing you came out of. Yeah. And that means that, you know, you didn't know those other people at that other church were actually saved.

They're going to heaven, too. Right. We thought only our bunch was going. No. No. And then you got to work your way through you find out oh my goodness there's people over there with that brand uh yeah they're and they're going to heaven too who knew yeah you know and so yeah it's uh

it's very interesting to get into and to uh uh and so it's called the table and you can watch it on youtube uh recommend watching it but i i consume a lot of stuff as a podcast because I'm moving so much. And so I love the fact we've got everything on podcast now. And again, it started at this time last year, and you're going to find a vast array of subjects being discussed by

some people who will challenge you. Whatever the subject is. You might not agree. Yeah, they challenge me. Because you agree with challenge you. Yeah. Whatever the subject is. They challenge me. You might not agree. Yeah. They challenge me. And if you, because you agree with everything you listen to, you need to get out more. No, that's true, Dave. I mean, one of my goals here is piss people off.

And I'm good at it. Well, we all are. We all are. But you know what, Dave? One thing I learned on this panel was that there is a difference between that younger generation and that older generation and how we think. And you will see that in the panel that the younger people were thinking a little different, actually a lot about the racial issues. Yeah. OK. Then Pastor Wesson and Mignon. And and I got to watch them kind of educate the younger people on why they should change their thinking.

And I was very pleased to see that. And it just helped me know what I need to be doing more often on my show. What was one of the things you noticed that you said the older generation would be what? They would be more what? Not blaming. Just to be transparent, not blaming white people. Okay. And not saying, the part I listen to, Mignon, of course, Mignon is an uber successful,

multi-million dollar organization, has grown from nothing, has grown a business. One of the best cupcakes in the world is literally made here in Tennessee by her. Right. Mignon Francois, and you need to look her up. She's an incredible entrepreneur, and she bootstrapped that thing completely. So she does not allow you to make excuses based on the color of your skin. Absolutely not. You can't blame it on nobody else.

It's your fault. Cannot. And she brings it. She's going to mama you on that. She really does. I love her. And she says, no, we can't say that. We can't play the victim.

And she really does. Well, it's true or not. Exactly. It doesn't benefit you. I heard her talking that through. That was very interesting. And I really does. Well, it's true or not. Exactly. There's no, it doesn't benefit you. I heard her talking that through. That was very interesting. And I love that. And I hope that younger people see it and they're challenged by it because it's a conversation again that needed to be had.

Yeah. And I'm just grateful to have it. Well, and it's eye-opening, too. You get to hear a different tone and a different look. So check it out, guys. It's challenging you. That's what we're here for. You get to hear a different tone and a different look. So check it out, guys. It's challenging you. That's what we're here for.

We want you to think about things and grow and be better. If you're the same person next year you were this year, we failed. Our goals mess with you. And 100% of growth is uncomfortable. Me, too. You know? Me, too. The only growth that's not uncomfortable is getting fat.

That's the only one. The rest of them are uncomfortable. And so, you know, the rest of them, everything else we do, you know, if I'm going to lose weight, if I'm going to get in better shape, if I'm going to, you know, have a better spiritual walk, have better race relations, if I'm going to understand what somebody's been through that I hadn't been through on either side of any equation, If I'm going to get out of debt, it's going to be uncomfortable. Yes. It's an uncomfortable process. And we're here to walk with you through that discomfort because we want you to win. Very cool. The Table with Anthony O'Neill.

Podcast, YouTube, any way you want to consume it. You need to check it out. And particularly this week's episode. This is the Dave Ramsey Show. Over the years, I've heard countless horror stories from listeners about being harassed by debt collectors, receiving calls at work on their cell phones, and some even getting yelled at and threatened. That is not okay.

There are laws against this, and there are people, attorneys, that can help make this stop if they are in fact breaking the law. Go to CollectionBully.com to learn more. Fill out a quick questionnaire that will identify if you are a victim of this type of illegal harassment. That's CollectionBully.com. Folks, 2020 was absolutely nuts. Your 2020 taxes may be a bit more complicated because of it. First off, if you drew unemployment, keep in mind this is taxable.

Unemployment checks are taxable income. Another big thing to keep in mind is remote working. If you left your resident state to work remotely from another state. You might have income tax in that state. You likely will. It isn't always the case. It depends on the state you live in and how long you worked there, all that kind of stuff. But you need somebody to help you. If you're unsure about 2020 because it made your taxes different this year, take our tax quiz.

You may be able to do a simple return with software, or you may need a professional to help you. Our TaxQuiz will help you figure that out. It costs nothing to take the quiz. Do you need a pro, or do you need tax software? What's the easiest and least expensive way to get this done? TaxQuiz. That's what you text. Text TaxQuiz, no spaces, to 33789. TaxQuiz, no spaces, to 33789. Tax quiz, no spaces to 33789. Anthony O'Neill, Ramsey Personality, is my co-host today.

A.J. is in Bloomington, Illinois. Hi, A.J., how are you? Hey, great. How's it going? Better than we deserve. What's up? Well, I just wanted to say God is good and he's listening. That's all I want to say. I'm 51 years old and seven days and lost my job two weeks ago. And so I've got two kids in college.

I was 100% invested in my 401k and my Roth IRA. I've got some debt. So I laid myself out and prayed this morning and was going through YouTube and hit reset. That came up as a little tab on the thing over there when I was looking at investing stuff. So I watched your reset program, and then I'm like, well, I think I'm going to call the program and see if I can get through it

and see what he thinks about what's going on with me. And you got through. That's amazing. Yeah. That's just all God. He's there and he's listening. Amen. I'm a little humbled, but I'm also scared out of my mind.

Me too. You can probably tell by the shaking of my voice. Me too. So, as I said, I worked for 12 years. I was 100% invested, and I had a three-year annual rate of return of around 11.55 coming back. So, I basically had about $312,000 total for retirement. But I also have about $100,000 worth of debt that, you know, with this reset thing, I'm really starting to think I've got 15 good years left. How do I want to spend them?

You know what I mean? So I'm thinking, even though it's painful to take a hit, to take $120,000 out of the 401k Roth IRA to get rid of all the debt and try to move forward in something that I can be, I don't know, happy with and excited about, I guess. What did you used to make? Well, it fluctuated. I'm in the auto industry. I was in sales starting out. Tell me, what'd you make last year? What'd you make last year? $89,000.

Okay, that's a pretty typical year? That's about average, yeah. What were you doing? Finance and insurance. Okay, good. And so inside like a car dealer? Exactly right, yeah. Gotcha, okay.

Did you ever sell cars, AJ? Oh, I did, yeah. And that actually did better when I was a salesperson than I did finance. But there was a reason why I dropped back. My son going to college is one of the colleges up in upstate New York that's needs-based. And to try to help out, you know, I thought maybe take a step back and try something new, get myself a little bit more versed in the rest of the car industry and learn it all. You know what I mean? And so I took a step backwards and also went backwards in pay.

And I had things under control. But then, you know. But then you did with everything else. Yeah. Yeah. Well, exactly right. Then COVID happened and sales are down by, you know, 40 percent across the board. And so changes get made. So AJ, are you saying that you're retiring as far as in like, you're just looking for another job, right? All right, cool. So that's what I was

going to say. I'm in the middle of looking for another job, but I mean, my biggest question is, I just want to be done with this debt. Like you said. I just want to say no, and I want to be able to, when I get to the point, be able to be that guy that's seen in a line, and if somebody needs help, pay for it. You're a good man. Let me tell you what I heard. Okay. This, losing this job hurt. Oh, yeah. Emotionally. losing this job hurt. Yeah.

Emotionally. Yeah. And you're still trying to get your feet back under you. It's still real fresh. And you're still trying to feel like you again right now. And we tell folks not to cash out retirement to pay off debt unless it's to avoid bankruptcy or foreclosure because you're going to give the government too much money, and you're eating it up.

It would feel really good right now while you're hurting and trying to get your feet moving again to have no debt, and so I can understand how you'd gravitate towards that, and I want you to be out of debt. I mean, you watched Reset. That's what we do. We teach want you to be out of debt. I mean, you watched Reset. That's what we do. We teach people how to get out of debt. I think you're going to get another job, and I think you're going to be making $120,000 a year. And I think if you paid $30,000 or $40,000 a year,

you're going to be debt-free in two years and some change without messing up your retirement plan. Yeah. Okay. But right now, while you're still trying to get your breath after you got throat punched, it's hard to kind of believe that. But I can sit on the outside of your pain and look at you and go, this is a guy consistently has made in the six-figure range and can pretty much do it on recall.

I mean, the biggest problem with the auto industry is not that cars aren't selling it's that they are selling and they're not making them yes yeah you can't get inventory no that's the problem they've got i mean everybody i know in that world the boat world the uh the recreational vehicle world the car world they can't get inventory and stuff so they've had record sales but they can't get they can and so that's why sales are off 40%. It's not because nobody's buying a stinking car. They're buying them off – you can't keep them. And the buddies that I've got that own car dealerships,

some of them had the best year of their lives last year until they ran out of cars. Yes, sir. And so I think you're going to – you're a guy that is – the groove in your brain, the rhythm of your life is right around the six-figure mark. And I think if you turn the heat up on that just a little bit, because you've got a really big, exciting why, is I want to be out of this debt so I'm not vulnerable. The next time somebody comes along and tries to pull crap like this,

I'll be a little bit more independent. From a financial standpoint, I'll be that third pig. And I think that's where you're headed. So the answer to your question, sir think that's where you're headed so it the answer to your question sir is i understand you're hurting don't use that part to make this decision it's do not cash this out get back on your feet get moving go to ken coleman.com get ken coleman stuff that we've got on career um start feeding your spirit again. I'm talking to a guy who has the ability in the next 90 days to land a $120,000 a year type position. I agree.

Don't you think? I absolutely do, Dave. The key word here is patience. Just patience. Well, believing. Yeah, believing, patience, and don't respond off of your emotions right now. Yeah. When somebody calls your baby ugly, it's hard, And I think they're ugly for a few minutes.

And when they look at you and go, you're not worthy, a throat punch, you're out of here. I'm going to knock the crap out of you. It's hard to get right back on your feet. But the thing I know about guys that are wired like you, AJ, because I grew up in sales my whole life, I've been in it, is I know a guy who can move stuff around like that and can cause a transaction to occur at a level where they're making 100 120 once you've ridden that bike you know how to ride it yep and i will be shocked if you're not back on that bike soon as long as you believe that you can still ride the bike yeah now if you think i'll never be able to do it again, then guess what?

You'll never do it again. But I'm telling you, I'm listening to you, I'm hearing, I'm talking to a guy that I think can make that kind of money. Go to KenColeman.com, download a bunch of his stuff. Hold on, I'm going to have Kelly give you a copy of his book, The Proximity Principle. Your biggest crisis is a career crisis and the emotional effects of getting fired. And once you get past those, you're going to solve your debt problem in no time.

This is The Dave Ramsey Show. 2021 is finally here, which means 2020 is over. And now you get to decide how this year goes. Rachel Cruz's new book, Know Yourself, Know Your Money, is also finally here and this book will help guide you to faster progress with your money no matter which baby step you're on. For years we've taught you that personal finance is 20% head knowledge and 80% behavior. This is the book for helping you grow and control your behavior. Know Yourself, Know Your Money goes beyond the baby steps and gets to the root of your money choices and mistakes.

2020 probably gave you a pretty clear view at what your personal money fears are. This book will help you channel those into a healthy money mindset so you can make 2021 a year worth celebrating get your copy of know yourself know your money today at the online store at daveramsey.com or call our Ramsey concierge team at 888-227-3223 Welcome back to the Dave Ramsey Show. Anthony O'Neill and Dave Ramsey here. Anthony, I'm my co-host, Ramsey personality, number one best-selling author. Open phones at 888-825-5225. Robin is with us in Dallas, Texas.

Hey, Robin, how are you? I'm doing well. Thank you for taking my call, Dave and Anthony. Our pleasure. How can we help? Okay, well, I'm 26. I'm a teacher. This is my last year of teaching.

I'm going to go through a career change. So I just want to know what I should do with my money in my pension, the state pension, and my 403Bs. I don't think the 403Bs are invested very well because when I signed up for them, I just wanted the financial planners out of my classroom, so I just said yes to a bunch of stuff I didn't know was going on. Okay. Anthony? Yeah, yeah.

So, Robin, here's what I would suggest. As far as you're saying, you're transitioning to a new job, correct? Yes. Yeah. So what I would suggest is get with a financial advisor and let's talk about rolling that over to like a Roth IRA. Okay. Should I do that before?

Because I have to go to school first. So I want to be a nurse practitioner. So should I do that before I go to school or once I'm secure as a nurse or a NP? Yeah, I would just roll it to a traditional IRA, not a Roth. You don't want to activate the taxes on it. So I'll disagree with Anthony on that part. But the idea of rolling it, and it doesn't matter,

but it's better to go ahead and do it as soon as you leave, and that way it's done. So go to DaveRamsey.com, click SmartVestor, and it will drop down a list of the SmartVestor pros, the people in the investment business that we recommend. And you're not trying to get them out of your classroom. As a matter of fact, you're trying to go to their classroom. Okay.

And you're trying to go that direction. Sit down with them, and they'll help you do a direct transfer rollover. All right. Hans is with us in Miami, Florida. It says on my screen you are debt-free, Hans. Congratulations. Thanks so much. What a pleasure to speak to both of you.

You guys are amazing individuals. Thank you. How much have you paid off? $52,000, $52,000, and $23. And how long did this take? This took one year, six months, and 25 days. Got it. $52,023. And how long did this take? This took one year, six months, and 25 days. Got it.

And your range of income during that time? My income went from $25,000 up to $75,000. Nice! I love it. What do you do for a living? Well, I used to be a part-time adult education teacher, and then I received a promotion to a similar department, making me full-time.

And then I took on a part-time teaching position within the same adult education. And then there were also some side gigs. I also work as a jiu-jitsu instructor, so I had privates. I was selling items on offer of. Anything that I could sell and get my hands on, I was getting rid of. Way to go. What kind of debt was the $52,000? This was Navient and Sally May.

She got evicted, as you guys say. Yeah. It was Allie, an auto loan, four credit cards. One was Kohl's. It was, let's see, Discover. It was Capital One. And then there was CFNA Tire Plus. Wow. Way to go. What happened to you one year and six months and 22 days ago that got you on this journey? Well, really what started is actually my girlfriend's mom. She recommended Dave Ramsey. and I never really had a plan for my money. It was just kind of a, I knew that one day I would figure it out,

and then she mentioned to check out this guy, Dave Ramsey, and I read into you. Then I was hooked from the first day. I put on the podcast on my phone. Anywhere I would go, I would never listen to music. I would just listen to your lovely voices. How old are you, man? If you don't mind me asking. Well, actually, I just turned 29. 29. So tell me why does a 29 year old want financial freedom? Like what's really driving you? What an excellent question. Um, really what's driving me is that, um, you know, I was, I was brought up in a household where credit cards were

okay. And actually my first credit card was a, it wasn't that I wanted to get, I was kind of one of those, well, you should get one because you should build credit because you want to eventually, you know, establish yourself as having a good credit score. So I was going off that idea, but, uh, it's for, it's more for my future. Uh, back in October, my girlfriend and I found out that we were going to be expecting June 6th. So that from that moment that changed my life and it wasn't about me anymore. It isn't about me. It's about, uh, the baby's future and her and I. And, you know, it's a little emotional, but that's just my drive. Not that I have a bad upbringing, but I just want to make sure that future generations of her and I are in the best possible position. And they don't go with the norm and they know that there is a better way to do it.

And it's structured. It works works it works when times are bad and it definitely works when times are good so what would you say what was the hardest thing throughout this journey so we clearly understand your why now you know because you're about to be a soon-to-be father but throughout this almost two-year journey what would you say was the hardest process, the hardest thing to do? The hardest thing to do, I would say the first three months was just establishing that budget. I was never on a budget and it wasn't that I was living paycheck to paycheck because I was living with my parents, but establishing that budget in the first three months and just really getting a hang of, all right, I need to pay the minimum on these, and then I can put as much as I can possibly on the smallest debt and tackle it. And it was just, it provided a structure for me, and it really changed the way I looked

at life. Wow. Wow. Way to go, man. Very proud of you. Excellent job. You're going to make a great daddy. Great husband. Thanks. Yeah, I love it. I love it. So when are you. Excellent job. You're going to make a great daddy. Great husband.

Thanks. Yeah, I love it. I love it. So when are you and your girlfriend getting married? That's great. We are. That's OK. I expected it. We are actually we're working the baby stuff and that not not financially. But today we are actually completing our move in. We are we are moving in together and, you know we're just uh we're building towards that uh anytime soon she's actually next to me now so i want to keep that uh right oh yeah okay all right we'll keep it on the download right now we'll let it slide we'll let it good for you well way to go hans very very proud of you congratulations very well done how's it feel now that you're there?

Oh, it's liberating. I just, you know, six months ago, once I was debt-free, I was a little shocked. I mean, I was like, I knew that I would get here one day, but being there now gave me way more control of my money. And as you say all the time, your greatest wealth building tool is your income. And it got to the point where I was able to save $4,000. I purchased in cash Invisalign and actually got a $1,500 discount simply because I was paying in cash. And now anywhere I go, if I can pay in cash, I'll say, hey, if I pay in cash, can I get a discount? And it typically results in a couple of hundred dollars off, but it's been the best. It's been for the best.

Well done. Well, we got a copy of Chris Hogan's book for you, Everyday Millionaires. I want that to be the next chapter in you and your new wife's and your new baby's future. That's for sure. Millionaire next door, baby. Here we go. Everyday Millionaires, just for you. All right. Hans, $52,000 paid off in one year and six months making 25 and scrapping hustling

up to 75 count it down let's hear a debt-free scream all right guys move those ears a little far away from the headphones now. Three, two, one. I'm dead, Bray! And yes, you are, sir. I like how he did that. Yes, you are. Well done. Yes, I like that. I like that. Having a reason to go through that much pain is necessary.

Yes. You have to have something you want on the other side that's called a better life. Yes. In his case, something he wants is he wants to change his family tree for the new baby. Yeah. That's about as noble a calling as you can get. Yeah. And it changes everything when you have a big why.

It really does. If your why doesn't make you cry, Dave, I tell people this all the time, the price of commitment will. Yep. One of the two is going to get you, baby. Yep. This is how it works. Anthony O'Neill, Ramsey Personality, is my co-host today.

This is The Dave Ramsey Show. Thank you. Our scripture of the day, Matthew 626. Look at the birds of the air. They neither sow nor reap nor gather into barns, and yet your heavenly Father feeds them. Are you not of more value than they? Mark Twain said, The secret of getting ahead is getting started. Every time I read that scripture about the birds of the air, God feeds them, I always think of, Yeah, but he doesn't throw the worms in the nest. That's funny you gotta get up the early bird still gets the worm yes uh god puts that worm out there gives the bird the eyes to see it skid them giddy up baby yeah get up get after it you

gotta hustle you gotta grind man you gotta bust it you gotta make your dreams come true and uh god and then god has the opportunity to bless all of that action that you're putting out there, all that sowing that you're doing. You will reap because of his sunshine, his rain, and because of you having planted seeds. There's the magic of the two working together, the mystery of the two working together. Yeah. I always tell people, Dave, that one of the greatest miracles that can ever happen to us is us doing what we need to be doing.

Yeah. Well, I mean, people that wait on God to do everything end up doing nothing. And people that think that God isn't there end up working really, really hard with minimal results. Right. It's a completely inefficient methodology in both cases. Absolutely. This is the overly religious, the over-saved, as our friend Michael says, and then on the other side, the under-saved.

You don't think God's there, or you think the one's going to do it for you, like he's somehow a grandpa handing out sugar candy. Come on, Dave. All right, Angel is with us. Angel is in Dallas, Texas. Hi, angel welcome to the dave ramsey show hi dave how are you doing today better than i deserve how can anthony and i help oh anthony hi how are you doing too doing well thanks for asking awesome um so me and my husband are on steps four and six. You guys are so awesome. I'm super excited. So I'm filling out my 401K.

This will be my first check that I will be doing this with. My company doesn't have a match, but I can do 15% with lost 401K. My husband, he has a government job, and they have a 401A, and the most he can do for a traditional after-tax contribution is 10%. So my question for his is that they have an additional, like, 457B. They have a 401A, but they also have a 401K, don't they? No, they don't. They only have a 401A, and then they have an add-on.

Yeah, and then they have an add-on that's a 457B, but that's pre-tax. So I'm wondering what I should do with him. Am I okay with me having my WAP 401K with no match doing the whole 15%? And with him, it's an after-tax, and it is 10%, but that's the max we can do. But then they have this additional 457B. Okay, let's stop and pan back. Okay. Quit trying to do his and yours.

Let's do ours. Yeah, okay. So what is your household income? Oh, gosh, we bring like a 130 a year. Before that's take-home or that's gross? No, that's gross. Okay. So we want 15% of that.

Okay? Yes, sir. Total. And then the most efficient way to get to 15% of that, we need that exact total. Yeah. And so let's see, $15,000 and $4,500, and so $19,500. So let's call it $20,000. You need to get to $20,000 and $30,000 is $4,500. And so $19,500. So let's call it $20,000.

You need to get to $20,000. Yeah. Okay. Now, so what I want to do then is I want to, as fast as I can, get to that $20,000 most efficient I can. Now, the best thing is to get a match. Neither one of you have a match available, right? His government does. They give him 12% on the 401A.

Even if he doesn't put money in it? That is correct. Okay, so that's not a match, right? Oh, sorry. He gets that either way. Yes, sir. Okay, so we're not going to count that. That's just wonderful. That's just good money, okay? Yes, sir. But, so we're not going to count that. That's just wonderful. That's just good money.

Okay? Yes, sir. But you don't need to do something to get a match. So no match. The next best thing, as you've correctly identified, is Roth. He does not have a Roth. You do. But we're trying to get to $20,000 worth of Roth now.

Yeah. Now, you can do six. He can do six. That's 12 on individuals. And then what do you make? I make 75. Okay. And so we might just load your 401k up and two individual Roth IRAs up to get to our

$20,000. That's it. That's it. Your Roth at work, his Roth. I would rather do, let's do two individuals. That's 12,000. That's it. That's it. Your Roth at work, his Roth. I would rather do, let's do two individuals. That's $12,000. So I want to put $8,000 into your 401k, give or take. So, you know, you can figure that out exactly however you want.

And we'll probably do nothing at his work. Okay. Okay. Okay. Because the Roth individuals and the Roth at your work are both better than anything offered at his work. Okay. That makes sense. And he's got marital rights to your stuff. You've got marital rights to his stuff.

So it's not like, I mean, in the event of a divorce or a death, on death you've got the beneficiaries you name. It goes right straight to him. He goes right straight to you. Either way, in the event of a divorce, if it's all know, on death, you've got the beneficiaries you name. It goes right straight to him. He goes right straight to you. Either way, in the event of a divorce, if it's all in your name, it's your work, he's going to get half of it. So you're protected from those kinds of things, those worst case scenarios. So it's match first, Roth second, then traditional, and get to your number and establish what

your number is first. And I like how you said that today because she was saying, hey, I'm going to put 15% of my income into my Roth. But what you said is like, hey, check this out. That 15% is going to be above the max of a Roth, which is $6,000. And then you're going to take the rest of your 15% and put that into a Roth IRA. And I think a lot of people get confused by that. Well, she's doing her 15%.

Well, no, you got to look at the math overall to get to the 20,000. I was really wanting to break that down to the listeners listening, because I remember when I first started out investing, I was like, well, I'm going to put 10%. Then I noticed one time it went down because I had reached my limit and I couldn't invest anymore. Yeah, but in her case, if she puts 8,000 in and does two individuals, that gets us to $20,000. So that's like, what is that, $650 a month? Yep.

Something like that gets her there into her 401k and then do the two individuals with a SmartVestor Pro, and that gets us to $20,000. Yes. And that's your 15%, and then let him get his non-matching 12% over there that the government's giving him in that after-tax 401k, which is great. I will definitely take free money. I always take free money. Free money is always a good thing. But we don't have to do anything over there to match it. We don't want to do the 457 until way down the list of things to do.

Let me ask this question, Dave, from you even teach me something on this. So for younger people now who, let's say, have a high deductible plan like me and you have the HSA involved with it, would you still advise to do the 401k, go into your Roth IRA and have some more to invest? Are you cool with us going into the HSA? After you maxed out everything else, if that's what it takes to get there. Okay. So like you got a 19.5 max on your 401K.

Yeah. So, let's say you're a high-income earner. Right. And you do that, and then you do 6,000 in your Roth IRA, even if it's a backdoor. Right. As a single. Yes. Okay.

Then you could go load that HSA up. Gotcha. That's another way of getting some money hidden. Like me, I'm in Baby Step 7, and so I max out anything I can. Yeah. Okay. I use my HSA as an investment vehicle because I don't use it for medical. Gotcha.

And I just load it up. Yeah. And I have every year since George W. Wow. I mean, no, George Herbert. Okay. I think W put the HSA in place. Okay.

Okay. So since he was in office a bazillion years ago, his first term, then that was the thing every year since then I have. Wow. And it's all in mutual funds. Yeah. So my HSA is several hundred thousand dollars. Love it.

Because I haven't had to use it for medical, knock on wood. But any medical we've had, we just paid out of pocket so as not to disturb what is essentially another investment vehicle. Absolutely. And the company we've got that we endorse on out of pocket so as not to disturb what is essentially another investment vehicle. Absolutely. And the company we've got that we endorse on the air is the company we use here that my personal is in, Health Equity. Okay. That company, you hear their ads running here on the air. And, you know, they've got a mutual fund option for your HSA once you get further down the road.

But that's after you're maxing out everything for whatever reason. Either because you're a high income earner or you're baby step seven. Yes. Okay. Either one. You don't start with the HSA as an investment vehicle. No. It needs to be used for health stuff early in your process. So, good stuff. Anthony, good show today. Hey, thank you, Dave. Thanks for having me. James Childs and

Kelly Daniel in the booth. Great job. As always, I am Dave Ramsey, your host. We'll be back with you before you know it. In the meantime, remember, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus. Have a friend or family member that needs a daily dose of Ramsey advice in their life? Let them know about the Ramsey Call of the Day podcast. It's a quick hit of advice about life and money in under 10 minutes.

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