The Ramsey Show - App - Should We Sell Our Cars and Get Cheaper Ones? (Hour 2)

Episode Date: December 14, 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. I am Dave Ramsey, your host. Thank you for joining us, America. Open phones at 888-825-5225. Chris Hogan is my co-host today.

Ramsey personality and author of the number one best-selling book, Every Day Millionaires. Again, the number here, 888-825-5225. Ashley's in Knoxville. Hey, Ashley, welcome to the Dave Ramsey Show. Hey, Dave and Chris, thanks for taking my call. Sure, what's up? I was just trying to get a little bit of guidance.

Long story short, I am the only child. My parents are divorced. My dad never remarried. He is looking to retire in May. And he doesn't, he's a very simple man, very old school. He doesn't have any debt. He has money put back in his bank account. So whenever he draws Social Security, he thinks that he's going to be fine with that.

And he wants me, he wants to leave me his 401k. I am on your plan. I'm on baby step two and I've paid off like $7,800 since July. And I'm trying to be very smart as far as if he needs it in the future, maybe try to find some way to make it grow, to take care of him possibly, or maybe make it useful for him in a different way if he needs it. Okay, so he's retiring, and how much is in his 401k? Around $140,000.

Okay. And how much does he have in the bank? About $20,000. Okay. And how much does he have in the bank? About $20,000. Okay. Okay. And so in his mind, he doesn't want to touch the 401k. He just wants to leave that all to you? That's, yeah.

And you try to talk to him about it, but like I said, he's very simple. He doesn't take trips. He doesn't buy a lot of the stuff. What he does buy, he pays cash for. He doesn't take trips. He doesn't buy a lot of stuff. What he does buy, he pays cash for, but it's not often. Right. Okay. I would just roll it to a 401K in some good mutual funds if I were him, and he can name you as the beneficiary, and if he doesn't use it, it can go to you,

but it's there until his death if he needs it. It can do both things actually yeah i was just kind of curious as far as like my he he does it i'm a nurse and whenever he gets to the point where he needs care he wants me to do that and i understand and so i want to be able to have the money there to use that if he needs it, especially. Yeah, well, it'll be in an IRA, in a mutual fund, and you can just pull out whatever you needed. He can name you the beneficiary. He also should do a will, and he could name you special power of attorney,

where if he was incapacitated and you were nursing him and taking care of him, let's say he had a dementia diagnosis or something like that, then you could take over his business affairs and manage the money for his care, which is your concern. And if it all works out the way he thinks and there's still $100,000 or $200,000 laying there when he dies, it can go to you. There's nothing wrong with that. But your point is that he really can't give it to you prior to death.

There's not a vehicle that allows him to do that. Correct. He can just name a beneficiary, so upon death. But then you've just got, he makes decisions with his life up until then that either use that money or don't use that money, right? Exactly, yes. Yeah, that's fairly easy. I mean, the thing is it can be sitting there for him,

and if he doesn't use it like he says, it can go to you. That's right. No, that's such easy i mean it's the thing is it can be sitting there for him and if he doesn't use it like he says that's right and go to you that's right no that's such a big deal and having that we talked about that in our staff meeting today dave uh with uh the beneficiaries please please please make sure you all are updating these uh people go through life changes and stages just make sure because that that designation of beneficiary can outweigh a will. It does outweigh a will. Yeah, and so you want to make sure on your life insurance, on your 401Ks, your IRAs, that that's updated and is the way it needs to be.

It's just a good thing year-end to just begin to look at it and always update it. Yeah, I mean, I couldn't believe how few people had current beneficiary status in our company. Right. I'm about to chew on somebody. I mean, it was like half of them, man. It was crazy. Because the other day, were you on the air with me when that lady called? Or was it AO?

No, AO was on. It was AO, man. She called us. They've been married seven years. Her husband had $200,000 in his 401K. He's 32 years old, had two little babies, and he got killed in a car wreck. And the beneficiary on the 401k for her husband his dad because he never forgot he never changed that for seven years of marriage he never went back and changed it after he got married please tell me the dad

did the right thing so he did okay but guess what dad got 200 grand in an inherited ira in order to give it to somebody he's got to work through gift tax issues and tax issues as well yes and so net of taxes uh she would have had taxes on it anyway probably depending on how it was set up but oh my gosh the whole thing's just a tangled mess because you didn't go do your beneficiaries you've got to do your dadgum paperwork people because it ends up costing everybody that's left behind money and hassle and a pain. Yeah, and you're right. Dad, thank God, would stand up.

I mean, what if it was one of these toxic situations? Yeah. He's like, no, I never liked you to start with, and he just keeps the $200,000, you know, because there's nothing you can do about it. It's straight up. I mean, it's a designated beneficiary. There's no will that intercepts that. So, yeah.

Sierra is with us. Sierra is in Columbus, Ohio. Hi, Sierra. How are you? Hi, good. How are you, David and Chris? Better than we deserve. How can we help? Hey, I wanted to ask a question. I often hear you say sell the car. I'm looking at about $200,000 in debt, not including the house. Our income is just over $100,000. Half of that debt is student loan debt, but we do have about $50,000 wrapped up in car debt. Do we sell both cars and get two cheap ones?

Do we sell one car? What are we looking at to attack this debt? What do you owe on the two cars? It's 50 total. Break it down. So we owe 25 on one, but it's worth 25. Oh, and 25 on the other. Okay. So 25 each.

Yeah. Yes, but the one is upside down. Yeah. Well, yeah. So the deal is this. One-fourth of your debt is cars. Yes. It will speed up to move way down in car.

I mean, you get your two $5,000 cars and pay them off, it will speed this process up considerable. And how old are you guys? Yes. I'm in my 30s. My husband is significantly older, though, so he's in his 50s. The advantage of doing this is twofold. One is it cleans up the mathematics and allows you to move forward getting out of debt much faster.

The other advantage is you are screaming at the person in your mirror that when you bought these cars, it was stupid. By selling them, you are permanently changing the groove in your brain. I mean, you can say this was dumb and pay them off, but when you sell them, you're saying this was dumb. That's right. And it changes you. You go, you remember that time that we had $200,000 in debt and we got rid of $50,000 in cars? We're not going back there. Never, ever again.

You know, but you can work your way out of it. You got, you know, how fast, how long does it take to pay off $200,000 and make it $100,000? If you do it in $50,000, it's four years. If you do it in $75,000, it's three years. Yep. You get a bird scooter and a skateboard and start moving. Stuff changes today, Sierra. Seriously.

Get your life back. Get your life back. Bird scooter. You ought to be ashamed of yourself. We need to get some, Dave. Let's ride. No. No, me and you on bird scooters. That's not a good idea. This is to be ashamed of yourself. We need to get some, Dave. Let's ride. No, no, no. Me and you on bird scooters.

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Better than I deserve, man. How can we help you? So I'm kind of holding me back. I was proposed an offer on a startup, startup tech company. And lately this year has been pretty, you know, blessed. I, uh, made some good money and I was starting, you know, in following all your shows on YouTube and I was about to attack, you know, all my debt that I have on my credit cards and my loans. And now this proposal came up and I don't know if I should jump on that first or pay my debt.

I'm like, I'm like, I'm a little scared what to do. Well, how much debt do you have, David? Um, so I have in credit card debts just around 25 K. Okay. And then, I mean, I have my personal auto loan that I have. How much is it? Around $50,000. You owe $50,000 on your car?

Correct. And then my wife has a lease. And what's your household income? I want to say around $250,000. And how much money do you have in the bank? Or you said you've got some money laying around. How much have you got laying around? I've got like around $240,000 sitting in the bank.

How much is this investment? It's around $100,000. Okay. Then I missed something because you said $50,000 on the car, $25,000 on the credit card. That's $75,000, and $100,000 is $175,000, but you've got $250 car 25 on the credit card that's 75 and 100 k's 175 but you got 250 in the bank correct but the thing is like with what i do i kind of work on a commission base so that money can't always it always fluctuates depending on the market too right so that's why if i'm in your shoes, David, I'm going to go with the known, not the unknown. Your income fluctuates. So the known thing that happens, you know that there's credit card statements coming in every single month. You know that there is car payments that are due every single month and you've got a lease payment due every single month.

So I'm going to do the thing to give me a raise. OK, and trust me, Dave and I have worked with NFL players, pro athletes, entertainers. Everybody comes to us and tells us about these ideas and concepts. Rarely do they ever talk about the ones that went south. And so I would take care, I would clean up your personal situation and then give yourself that peace of mind. Before I drop $100,000 in a startup, I'm going to have $2 million in mutual in mutual funds my house is going to be paid off and everything else is going to be paid off because that basically is money you're dropping on the roulette table hoping you hit a number oh right no that makes sense it's an uber high risk play you understand that no 100 that's why i'm I'm very worried what to do.

But 100% of the time you pay off that car, you no longer have a car payment. That's exactly right. That statement's not coming in, and now you can redirect that money. And again, it's just a smarter play. And again, I understand that sentiment. I can go back to my PD days. Now listen, Dave. Pre-Dave. You already knew.

You just wanted somebody to tell you. It was bothering you. You were stressed. This didn wanted somebody to tell you. It was bothering you. You were stressed. This didn't feel right to you. You already knew before you called us this was a bad play. Yep. So don't do it. And proud of you for reaching out.

Every time the bell rings, answer the bell. When you get a feeling, that's called God's spirit whispering to you, don't do it, fool. Every time I go against a don't do it fool whisper, I find out I'm a fool. Yeah. I mean, we've all had that. No, we haven't. I knew I shouldn't have. I knew I just had a feeling.

How many times have we said that to ourselves? All of us do it, man. It ain't just you, David. We all have had that experience. But it looks glittery. It looks shiny. Yep. And then three years later, you go, oh. We all have had that experience. But it looks glittery. It looks shiny. And then three years later, you go, oh, God, I'm an idiot. Well, you know, I've decided that, Dave, we should go back and count the things we didn't do.

No, we shouldn't. I don't want to count the things I have done. No, that we didn't do. It's a long list. That we protected ourselves from. Oh, the things we didn't do. Yes. See?

That might be a longer list. Well, that's true. But we stay in on the plan, David. I'm going to tell you, buddy, I don't care what offer comes your way, you're going to do the thing that's known and the stable for yourself and your future. Proverbs says, the wise see danger and hide themselves. The simple see danger, proceed on, and are punished for it. And that's what we're talking about.

And I have been the simple, and sometimes I've been the wise. And so what we're saying is that feeling, that sense you had, is very, very accurate. So well done, sir. Well done. Man, you're making some great money. Yep, I am. Congratulations. Mike is with us.

Mike is in Pittsburgh. Hey, Mike, welcome to the Dave Ramsey Show Hello, thank you for taking my call Sure, how can I help you? I'm looking for some guidance Our family, to start off, has been blessed financially So it's a good call But I have four kids

My oldest has just graduated college Yay And she's going to come back home And work at a job for a couple years It's what she wants to do And then she's going to come back home and work at a job for a couple of years. It's what she wants to do. And then she's going to move on. Okay. So here's my question. Now, I haven't saved, all my kids have college education, so she's graduating debt-free. So she'll be 21 debt-free. But I do have some investments that I started when she was younger with U.S. savings bonds. And then I have an UTMA account for her.

So altogether, I have about $50,000 for her. I'm not sure exactly. I know when she's 21, she's supposed to be young. She does not know about it yet. But I hate to just give her this money. Is there something that I saved for her? And then she wants to get a car. I refuse to let her get a car loan.

I didn't know if I used that money to get a car. And then the last thing of all that is now she's living at home. I want her to get used to paying bills and stuff, so I didn't know if I charge her rent, collect it, and then give it to her whenever she moves in two years? But what can I do with that money? Now, all my kids are going to have that same thing with all four kids, hopefully. So I just want to get your guidance on that. Well, there's several subjects going on here, and I had every one of those subjects with my kids.

And my kids are now in their 30s. Okay, one's 29, and the rest of them are 30s. And they're all married and grandbabies and all kinds of good stuff happening now so uh all uh two of mine never came back home they didn't want to they were mad at us they just had other plans right one of them just gotten married right out of school or just before getting out of school so rachel winston got married right before graduation so they obviously weren't going to live with us. Not obviously, but they chose. They were able to. My oldest, when she did move back in with us after college, but we didn't want her to stay a long time, just long enough to get situated.

She stayed about three months. And the reason we didn't want her to stay longer than about three months, assuming that there wasn't some kind of a problem in her life and there wasn't she was very healthy and everything was fine and making good money and just like yours is something happens when they have to turn off the lights in their own place and buy their own groceries for their own refrigerator and pay the bill or it gets cut off kind of thing and just even with a responsible kid, something happens developmentally. They, like, finish the last step into adulthood. I wouldn't let her stay there two years. I don't think it's wise.

From a developmental standpoint, I think she needs to move on with her life. Now, a few months is fine. That's okay. And, yes, I would talk to her about this money and talk to her about how to wisely use this money that you've got as a blessing and buy a car out of it, help her, go show her how to buy a car. Go with her. Teach her how to buy a car, Dad. It's one good thing dads can do, right? And so just walk along with that. That's exactly how we did it. But you're trying to help them launch, not trying to run an economic model.

There's a difference. This is the Dave Ramsey Solutions on the debt-free stage, Richard's with us. Hey, Richard, how are you, man? I'm all right, and yourself? Better than I deserve. Where do you live? Los Angeles. Oh, welcome to Nashville. Bit of a haul over here to do a debt-free scream, huh?

Yep. How much did you pay off? Just about $40,000. Cool. And how long did this take? 20 months. Good for you. And your range of income during that time? Between 55 and probably about 90 this year. Okay, good.

What do you do for a living? I am in supply chain, aerospace. Oh, excellent. Yeah. Good. That's a great career. Yeah. Zoom, zoom, you can go up, man, fast.

Yeah. And you are. You've gone up a bunch in 20 months. You really have. Yeah, I mean, there's a lot of that has to do with the side hustles, but I guess we'll talk about that. Okay. What are the side hustles? I did, you know, like food deliveries and things like that.

I'll spare you guys the names. They don't pay me to give them free advertising. They don't pay the Richard endorsement fee. All right. How many side hustles did you have, though, on that? Probably throughout this whole thing, probably about five. Wow. Okay.

Okay. So you got serious. Yes. Okay. So what was the debt you just deleted out of your life? Part of it was consumer debt. It was $5,000 in consumer debt and just a little over $34,000 in student loans. Wow.

Wow. What happened 20 months ago set you on fire, man? Well, it actually all began at the end of 2017. I was at work one day, and one of my coworkers, I walked in and he was watching one of your shows, and he said, hey, you know, Rich, I think you should check this guy out. He seems like this is something you'd be interested in. So that next morning while I was cooking breakfast,

I just decided to put you up on YouTube, and you were describing how to invest $100 a month and become a millionaire over time. At the time, I was also in a finance class in my undergrad and, um, I was learning about the, I had a financial calculator. I was learning about the present value and all of that. And so I was punching in the numbers as, as you were describing it. And, uh, sure, sure enough, it, it came out to a little over a million dollars um so from then i knew like okay this guy knows what he's talking about and so i was i was all in um from then um 2018 came around

um i had a goal of i had two goals um uh beginning to pay off some some um debt and the other goal was to save up money on um some trips that I had planned for the end of 2018 and through 2019. So beginning of 2018 came, I started with the program just to get rid of the consumer debt, the $5,000. Six months, it worked. I was like, okay, this works.

But I still wasn't 100% convinced. So I said, okay, if it worked for I was like, okay, this works. But I still wasn't 100% convinced. So I said, okay, if it worked for the $5,000, let's see if it works for me to be able to save up to go on the trips that I had planned. So I used the same principles to basically save up for the trips that I had planned. Six months later, December 2018, it worked. I had enough money to be able to, if I had like five trips, I was going on, um, beginning in Mexico, going to Japan, uh, uh, the end of 2018. So, um, once, once I saw that it worked, I said, okay, 2019 is game over. Yeah. I'm, I'm, I'm all in.

Knock it out. Knock it out. So, um, so I, like I said, I was headed to Japan the end of 2018. I made my first payment on my student loans. I had about $34,000 left on that. Before I got on the plane, I said, I'm making this first payment. That way, as soon as I touch down back in Los Angeles, I'm going to be going from there. Then most of 2019 was all just payments every single month back to back.

I got used to it. Paid off probably about 15 grand in 2019. Wow. Just, you know, just steadily a little over $1,000 a month every month. Yeah. Then 2020 came and due to the pandemic, those side hustles that I mentioned just went through the roof. Yeah. So between January and July of this year, I was able to pay off 19 grand.

Wow. Yeah, just by submitting to the process. And so, you know, it's been amazing, the whole journey. A little bit circular, but when you applied it, it worked. Yeah. I mean, for me, once I'm all in, I'm all in. But I have to test the waters, and that's with everything that I do. I hear you.

Very analytical, yeah. Yes. And once I saw that I was able to do it and something that I enjoyed doing, because I definitely didn't enjoy paying off debt. Sure. So once I applied it to traveling, being able to use this, I mean, it's the same concept, but to do something that I really enjoy doing. So what's your advice to someone wanting to get out of debt?

It definitely has nothing to do with the numbers because because when i looked at you know thirty nine thousand dollars um two years ago um a little over two years ago i i was like i don't know when it's going you know when i'm going to be able to do it but i'll do it eventually um it's all about the mentality it's all about um believing you can so you take steps right right and one of the things that i've heard you mention on the podcast a lot is you went at what you focus on. Yep. But I learned that it's not – that's not just like a philosophy. It's not just something that sounds good. Like you literally, when you're focusing on it, other opportunities come up.

You start – I mean I had – since I started focusing on it, I had two promotions at work and two two raises. So my and and the reason why I got the first promotion was because I told myself, OK, if I want to do this, I have to make some more money. So I actually started, you know, digging into the job openings and stuff like that and and got a job that I probably wouldn't have applied for if I wasn't out there looking for it. And same with the side hustles. That's amazing. You became hyperintentional. Oh, absolutely. You became very intentional.

Absolutely. And not only did you get your money back, you gave yourself a promotion in life. Yes. You know, on another path. Man, I'm proud of you. Well done. Seriously, you have to be proud. I really do. We'm proud of you well done uh seriously you have to be proud i really do we're proud of you yes got a copy of chris's book for you everyday millionaires

that'll definitely need be the next uh thing to be intentional about yes right next chapter in your story that's the goal i'm trying i'm wracking my brain trying to find that quote that when a man or woman is focused and has a goal, heaven and earth will move to cause them to make it happen. It's just like everything starts to collide in your benefit when you're aiming at something. When you're aiming at nothing, it all just seems to wander away from you. All these opportunities go to somebody else. Yes.

They seem to collide on you when there's something in the spiritual realm that when you just focus on something, it causes things to happen. And the thing is, a lot of things, I had plans for things to work out in a certain way. It didn't work out in any way that I planned, but it actually worked out better. It's almost like there's a conspiracy behind the scenes to cause you to win. Right. Because I definitely didn't plan on a pandemic. I definitely didn't plan on, you know, but. Nor prospering from it. Exactly.

You know? There you go. So well done, sir. Very well done. Thanks for coming all the way from L.A., man. I had to. Very neat. There's no other way to do it for me after all of that.

All right. Richard from Los Angeles, $40,000 paid off in 20 months, making $55,000 to $90,000. Count it down. Let's hear a debt-free scream. All right, I didn't give it any practice, but we'll give it my best shot right here. Three, two, one. I'm debt-free! Yay!

Did a pretty good job with no practice,'m gonna tell you right he's been reviewing youtube well done sir yeah well done yep young man it is amazing how there is a conspiracy in your favor when you set a goal and you commit to it yeah it's not a not a dream. It's not a wish. It's a goal. Because a goal is just vision with work clothes on, right? That's right. And it's amazing how the conspiracy of heaven and earth comes together. Like, everything is like angels are saying, we need to get him that job, you know,

and we've got to get this relationship straightened out, and we've got to get this thing. And things just start to happen to your benefit because you create this wake of becoming a force of nature. It's very, very interesting how that really does work. And it really, I've observed it a bunch in 30 years. This is The Dave Ramsey Show. Thank you. thank you for joining us america open phones at 888-825-5225. Chris Hogan, Ramsey personality, is my co-host today here on the air. Reid is with us in Richland, Washington.

Hey, Reid, welcome to the Dave Ramsey Show. Gentlemen, thanks for taking my call today. Sure, man. What's up? So, I'm 35. My wife's 33. I have three kids, eight, three, and one. Basically, to try to sum it up, bought our first home about 10 years ago. It was a duplex rental property type of property. Lived in one side, rented the other out.

I'm kind of a fixer-upper, sweat equity, entrepreneurial type person. Saw an opportunity at another cheap property after we were in the duplex for about five or six years. Bobbed this other house, fixed it up, and recently with the high market, was able to sell it for a pretty substantial profit. And then we moved back into our duplex after selling the property, if that makes sense. Yeah, how many kids you got? How many kids you got? Three kids.

And when you said when you started all this stuff, did you have kids when you started all this stuff? No, we did not. We did not. So moving back in the duplex wasn't as fun as you thought it might have been. It's cozier. It's cozier. That's not the word your wife's using. Yeah, I have an awesome wife, though, and she does above and beyond. During that time, me and my wife also have completed our bachelor's degrees online

while I worked full-time, and she's taking care of kids. So it's been a process. So how do we help today? Yeah, so we still have a remaining mortgage balance on the duplex of around a hundred thousand is what we owe left on it. It's a, okay. A hundred thousand. Let's round it up. Um, we sold the other property, netted a profit after realtor fees, after everything of about147,000. And so we already have some money set aside that's been our, I guess you'd call it emergency fund. It's about three to five months worth of savings.

We did say things a little bit backwards. We only incurred a little bit of school debt while me working full time and taking care of the children of about $20,000. What's your question? For both degrees. me working full-time and taking care of the children of about 20,000. What's your question? For both degrees. Well, my question is with that 147,000, we're looking at possibly, you know, obviously finding another primary residence in the future.

We could take 100 of that 147,000, pay off the rest of the duplex that is going to maintain a rental property for us for a long time, is how I see it, and have some money left over to put down as a down payment on the next property. I guess my question is, is it worthwhile to just pay off the rental property, or because it's going to be a rental property, would it behoove me to buy something else? Contrary to what you've been doing for your entire life, what we have found is that the people who build wealth are the ones that get out of debt and stay out of debt. That is the shortest path to wealth building.

It's not keeping around debt and or figuring out that some debt is good and some debt is bad and all that bull crap. Okay? So bottom line is is if if i'm you my goal is to take every dollar i can get my hands on and have a paid for house and a paid for everything as soon as possible now if that means keeping the duplex so it takes a few years to pay off the house or a few years to pay off the duplex because you put

147 000 down on the house that's fine or if it means to pay off the duplex because you put $147,000 down on the house, that's fine. Or if it means I'm selling the duplex, taking the equity out of it, putting it with the $147,000, paying cash for a house, then I'm going to start saving to pay cash for my next rental and avoiding debt from this point forward. Either one of those plans will work for me. That's exactly right. And Reed, you are hearing from a man that I know of that owns the most real estate possible. I know Dave. I know his heart for real estate. I know his passion for it. But I also know his philosophy, and that means with cash. And so in this, and Reed, I hear it in you. You got the propensity for some stupid going on, meaning in as far as jumping out and grabbing more property and more and this and that.

You said you like getting your hands on things and working on it. What I want you to do is get your hands on your future. And like Dave said, one or two ways, either hold on to the duplex, and that's going to be the slowest route. I'm going to microwave this bad boy. I'm going to sell the duplex and take that money along with the money you have saved, get in a home. Pay cash. And pay cash for this thing.

And now moving forward, I'm not doing anything debt related. I don't care who it's from, how good of an idea or how great of a property is. If I don't have cash, there's no chance of me taking that risk. So I did that myself when I was 28 years old and I went broke. First thing we did was we rented for two years, and then we saved up and we paid cash for a house. Then I saved up, paid cash for my first rental, that go around. Now, I had $4 million worth of real estate before I went broke, but it was all leveraged and I lost it all. Right.

But my first rental was about 32 years old and when you have a paid for rental and you do not have a house payment and you start making just a little bit of money and you get to keep it all except the dadgum government's part right but the rest of it is yours you're not sending a bunch of it to a bank it does not take long to buy the next rental and by the way both of those rentals for cash then cash flow like crazy. And that cash starts piling up. You get a snowball going here in your favor. Rental snowball, rent rates.

I mean, I got so much rent coming in nowadays that I can buy another piece of property once a month from the rent that's coming in. But how many properties did you have before you would it all fell in at the height of your real estate back in the day well i've owned over 2 000 in my life but i'm trying to think that the uh i probably owned uh probably owned about 100 100 yeah so you went from lost them all to zero lost them all yeah yeah or sold them all to keep from losing one of the two but i mean they all went in that deal when i got turned up on my face out of my own stupidity. Because I had the propensity, what you said, the propensity for stupidity. And I did it with zeros on the end, man.

I don't do anything half-butt. And when I do stupid, I even go wide open, you know. So that's what I did. So it took, the second go-round was not the hair. The second go-round was the tortoise. That's right. Yeah. And that's what we're talking about, Reed, is what we're describing to you is making your hair curl

because you're just like, oh, God, that sounds so slow. It is. Yep. It's also the wisest route. It's also the shortest route. The best way to get rich quick is to get rich slow. Yes, sir. Tyler is with us.

Tyler is in Michigan. Hey, Tyler, what's up in your world? Good. How about you, Dave and Chris? Nice to talk to you guys. You too, man. Tyler is in Michigan. Hey, Tyler, what's up in your world? Good. How about you, Dave and Chris? Nice to talk to you guys. You too, man. How can we help? Yeah, I'm 29 years old, and I am trying to get a real good branch on my retirement.

I currently have about $140,000 in my retirement account through my work at my 401K, and I am looking to max it out um starting this year um at 19.5 a year i can put in yeah yeah and i didn't know is it best to put all of it in one lump sum at the beginning of the year or pay the max out per month into my 401k this year this year that we're just coming out of is a really good example to test you on this all right mathematically if you're gonna leave it alone in a retirement account and you should be leaving it alone if you're gonna leave it alone five or ten years it's always better to go in all in as fast as you can because the money starts working sooner

but emotionally sometimes that'll give you a throat punch. Imagine a world called January of 2020, and you put all in. And what did it do on March 20th? The stock market dove. Remember? Right. A little pandemic crash we had going there. Remember that?

Like, the world is coming to an end! Oh, my God! You remember that? Okay. Oh, yeah. And if you go pull up the Dow Jones Industrial Average for this year, or an S&P 500 chart for the year 2020, you'll see January coming along, and about the time you would have maxed your 401k, it fell off a cliff. And if you can't emotionally stomach that, you would not be where you would be today,

which is, by the way, after it fell off that cliff, it climbed steadily back up the mountain, and about 65 days or whatever it was later, it was back. But nobody reported on that in the news. And today, you'd be sitting with a nice rate of return, having invested it all in January, but the road that you would have taken would have been thrilling. Mathematically, it's the right thing to do. Emotionally, you've got to be able to ride it. You've got to be able to do the ride.

This is the Dave Ramsey Show. Hey, it's Kelly, associate producer and phone screener for The Dave Ramsey Show. This episode is over, but if you heard about an event, product, or service and didn't have a chance to write it down, don't worry. We list everything you've heard about during this episode in the podcast show notes section or head over to DaveRamsey.com and click Dave recommends. Thanks for listening.