The Ramsey Show - App - Take Care of College Before Worrying About Retirement (Hour 3)

Episode Date: July 15, 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'm Dave Ramsey, your host. Thank you for joining us. We appreciate your call. 888-825-5225. That's 888-825-5225. Jody starts off this hour in Minnesota. Hi, Jody. Welcome to the Dave Ramsey

Show. Hi, Dave. Thanks for taking my call. Sure. What's up? I am calling because my husband and I are working on Baby Step 2. Great. And we recently started fostering my niece and nephew. And we will be fostering them for an indefinite amount of time. So we will be receiving money from the county for fostering them. And so what our original plan was to put that money into a separate account to use just for those two kids and just to meet their needs and anything that they need. And then anything beyond that, we were just going to kind of hold it into that account.

And if they did end up going back to their mom, we were going to invest that money for them and give it to them like when they graduate high school, that sort of thing. Yeah. But then it occurred to us, should we actually be using that money to pay off our debt instead? Yes. I guess we're just not sure the right thing to be doing with that money. Yeah. What you were attempting to do was noble.

I mean, the whole thing you're doing is unbelievably noble. You're taking care of these kids. Thank you. But you're trying to do something that felt right with the money because getting money to take care of family member kids feels a little icky to you and you're trying to go well i want to push it over there towards them because i don't feel like i should be doing that there's a little bit of that under the surface here and that's kind of a normal awkward feeling but here's the thing you are going to write whatever checks are necessary while those children are there to take care of them, aren't you?

Yes. Okay. So it's just coming out of one pocket or the other. You know, you can't set the money aside to take care of them. You're taking care of them. It's all in one pocket. You know, you're going to care for them. And so, and as far as their future goes, the other things, the best way for you to help them big time in their future, if you want to do that, if they go back to their parents or whatever, with the excess money you're talking about, is for you to get out of debt and you to have an emergency fund and you to build wealth.

And then if you've got a pile of wealth over here and you look over and have a niece and nephew, you can just write a check. Sure check sure you know i talked to a guy the other day that's a friend of mine he's a multi-millionaire and he was so excited he had run a spreadsheet he said did you know what a million dollars will do and i went no what will a million dollars do and he said i can put a million dollars in a mutual fund and the income off of that mutual fund will pay for all of my nieces and nephews to go to college wow that's pretty cool yeah that's pretty cool and that's just a million dollars you know and so you're going to be millionaires you're on your way you're doing the stuff we're teaching you're going to get out of debt you're going to be millionaires and by the time these kids are how old seven and fourteen okay and so you know 10 years from now um what well not quite seven years from now you're gonna have one of them in school probably uh but the you know you're gonna be in a much better

position by the time they get to college than you are today to do something for them and part of that is the result of just directing this money to cleaning up your mess because that's the shortest path to you being wealth which wealthy which is the shortest path to you helping them overall. Right. So what do you think the probability is you end up adopting them? I'm not sure at this point. Their mom's still going through treatment and things, and so I don't know. I really honestly don't know.

It kind of feels like a 50-50 shot at this point. What's she addicted to? Meth. Okay. Yeah, you probably got these kids. I hope she makes it, but you probably got these kids. Right. Yeah, and I'm so glad you're there.

I mean, what a great thing. And you can do it. You can do it. What's your household income? We are right around $80,000 right now. Yeah, so we just moved, and my husband just graduated college and just started a full-time job all, like, in the last couple weeks. So we're going through a lot of changes.

I'm sure, a lot of stress. And this is his family? My family. Your family, okay. And this is his family? My family. Your family, okay. How old are you two? 38 and 39. Okay, cool. And you have kids of your own?

Yes, we have a one and a three-year-old. Wow, what a house full. Okay. Yeah. Okay. Well, here's the other good news. If that occurs, if you end up adopting them out of foster eventually uh that there's no cost for college the state will pay for the college oh i guess they didn't realize that

yeah okay adopting out of foster care is a not only an inexpensive thing to do if for people that want to do an adoption zero to 2500 on average um most of the time zero cost to adopt But also then the state Jumps in and does all kinds of stuff Including paying for their college So You can verify that in Minnesota But in all the states that I'm aware of

They do it And it's just It's a very very cool thing That you've been able to do here I hope for the sake of um your family member your sister uh that that she turns it around and it turns out okay but meth is just tough it's just tough yeah that's a that's heroin and meth are two of the toughest ones recidivism rate wise percentage wise but i mean god can do anything and the human spirit's

powerful and i hope she turns it around right yeah me too i actually do have one more question about it okay um speaking of god should we be tithing on this money it's up to you i don't care okay and by the way god doesn't either he's not sitting up there with a school card he's not sitting up there a little chicken scratch going one two three four cross five right he's just not doing that it's not like performance um you know you're taking care of orphans which is a biblical mandate and in effect for at least temporarily they're orphans right right and so um the money you're receiving to take care of those kids is you know you can't out give God. So if you want to have on it, fine. But if you don't have on it, I could probably make you a real good Bible study on why you don't need to.

But I don't worry about all that stuff. It's just I always have giving way at the top of my list. And it never it never disappoints me. OK. All right. You're by the way, you're giving your whole freaking home is open. It never disappoints me. Okay? All right. By the way, you're giving. Your whole freaking home is open to a 14-year-old. A 14-year-old. Yeah, that's giving right there.

Hey, you're incredible. You're heroes. Way to go. Very well done. Guys, the foster care system, you know, we just finished doing a little bit of research on a couple friends of mine are working in that space a lot and um i was just helping them brainstorm with with fundraising and stuff for some of it there's only 108 000 kids in the foster care system eligible for adoption. Nationwide. I mean, if we just, like, thought about it for a minute in America,

we could just do away with that need. There's only 108,000. That's nothing. I mean, and it costs nothing to adopt somebody out of the foster care system, or virtually nothing. Something to think about. 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 I make sure it's going to live up to what it claims.

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What's up? I just had a question about if I needed term life insurance or not. I've got kind of a unique pension that will start paying me when I'm 55. And if I were to pass before that, my wife or dependent kid would get a certain amount, $9,000 for 48 months and then $4,000 until she passed or if it went to my son until he turned 23 if he was in college. Okay. Well, the purpose of life insurance is to replace the income that you create if you die before your family has enough money to not need that. If the money you just described is enough for them to live on and they're satisfied with that, then you probably would have very little need for life insurance. Okay.

And I've got my employer also gives me a one-time salary, so it's probably pretty close. I'd probably like to have, you know, my mortgage plus an amount of term insurance equal to my mortgage plus some for college for your kid. But you wouldn't necessarily have to have the normal 10 to 12 times your income that we would say because a portion of your income is replaced there. So what is your income now? About $200,000. Okay. So your family would drop from $200,000 to $48,000 a year? Correct.

That doesn't work for me. No. And I'm not self-insured yet, but I'm close. Meaning you have a bunch of assets? Yeah, just in retirement accounts mainly. How much? About $500, retirement accounts mainly. How much? About $500,000. Okay.

And your home paid for? No, it's not. Okay. How much do you owe? About $200,000. Okay. And, yeah, I'm probably going to pick up pretty substantial life insurance in this situation because I don't want to drop from a $200,000 income to a $48,000 income sure uh and you said you're how old 32 yeah i mean why don't you why

don't you price a couple million you'll be shocked how cheap it is okay it's really not that much to it you make really good money and it's a you know you you could buy be over buying at that but even if you got a million and put it with the benefit that you have, the benefit that you have reduces the need, but it doesn't alleviate the need because it would be cutting your family's income by 75%. Sure. Yeah, so that doesn't work. No, we're not going to do that.

But, you know, you could lower how much you had. You could have a million instead of two million, but we want the house paid off and, you know, $100,000 a year coming in plus that 50, they'd have 150 to live on. That'd probably work out, you know, at least something like that. So a million to two million, somewhere in there. But, you know, as long as you're healthy and not overweight, don't smoke, it's really ridiculously inexpensive. It just doesn't cost that much. Katina is with us in arlington texas

hi katina how are you i'm good how are you doing today better than i deserve what's up great um thank you for taking my call and thanks for all you do um um i'm trying to help my parents right now they're in some dire circumstances and um getting increasingly more dire and my dad called me today and we talked about some stuff and um he had a question and i told him that i would ask you okay and the question is um is there anything that mortgage mortgage companies will do to help people who are going through really rough financial times? Not much. No?

What's the nature of his rough financial times? Well, kind of. They're in a lot of debt. On what? Even worse than paycheck to paycheck. How much debt do they have? Probably close to $1,000, not including mortgage debt. I'm sorry, $1,000 in debt?

No, $100,000. Oh, okay. Probably close to that. On what? Credit cards out the wazoo. They've stopped making payments on the credit cards. And how much is out the wazoo? How much is that? I don't know.

Probably close to 10 credit cards. How much credit card debt? Oh, I think that's the majority of it. They also have a home equity line of credit. How much do they owe on their cars? Their cars? Probably 20-something thousand. I'm going gonna try to help them sell that one yep and probably the other one too get you a couple beaters um so what do they owe on their home

they're oh that's hard to know um it's on the market right now with an elp that i helped them get good and they should come out ahead and be able to pay off all the debt once it gets sold. Right. But it's kind of in the higher bracket, so it's not selling as quickly as they'd like. How far behind are they on their payments? They're not, luckily. They haven't missed the mortgage payment. Well, here's the rule, okay, in these situations.

If you're going to lose something, lose the car. Okay. Don't pay any personal debt at all until you've bought food first, lights and water second, and paid the house payment third. Okay. Because the house payment is the magic bullet that cleans this mess up when you sell the house. Okay? Right. So there's no reason to ask a question of what do mortgage companies do if you're in financial straits.

You're not going to have to worry about that because you're going to pay the mortgage payment. Correct. So you eat, you keep the lights on, you pay the mortgage payment. If the car gets repoed, that'd be bad, but that's before the house gets in trouble. Okay. Get another car. Okay. Get the car up for sale.

Stop paying all the credit cards. Cut them all up and for God's sake, stop using them. Right. Under any circumstances. Okay. What's their household income? Very little right now. It used to be more.

I'm not sure how much my dad makes, and my mom's currently out of work. Okay. What do you think he used to make? Well, I know my mom used to grow 70-something thousand last year, and she's been out of work almost a year. Okay. Why? And then my dad's been self-employed, but then his latest job was Uber. Why has she been out of work a year? Having a hard time getting back in the workforce. I'm not really sure why.

But now she's helping taking care of my new baby. And instead of paying a daycare, we're paying them. Yeah, you're not paying her $70,000 a year. No. She needs,000 a year. No. She needs to get a job. That's what I told her today when I realized how bad it was when my dad asked me for help. I told her that we'll make it and make that she needs a job tomorrow. And your dad needs a new job, right?

Well, he's actually found a new job. He's not Ubering anymore. It's at Lowe's full time. Okay. All right. And the house, what are they asking for the house? I think it's in the $400,000 range. Okay.

And in what city? Northridge and Hills, Texas. Okay. All right. Yeah. Make sure the ELP knows how motivated they are. Yeah. I made a call to him today because I'm not sure if they've really conveyed that yeah

you need to know that he needs to get the price a group get it priced aggressively if they make a little less on it that'd be a lot better and it cleans this mess up but at the core of this whole problem is their careers isn't it yes yeah they've got to work on their careers that's at the core of the problem. And I don't know exactly what's going on here, but nobody around there is making much money is what it sounds like. And so that's what you've got to address. But, yeah, food, lights and water, house payment, period. That's all.

And until you get those three things done every month, you don't do anything. And let's get this house priced aggressively and get it sold. It sounds like they're a wee bit emotionally in a fog and stuck, and you are the one that is piercing through that. I'm glad you're there to help them do that. So push them. Push them to get jobs. Push them to get it sold, the house. Push them to get jobs. Push them to get it sold, the house.

Push them to get the car sold. But if they get jobs, this whole thing goes away. And then they can start addressing their overspending with credit cards a little bit later. This is The Dave Ramsey Show. 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.

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Welcome, welcome. Good to have you. Where do you guys live? Toledo, Ohio. Oh, wow. Fun. Welcome to Nashville. Thanks for having us.

And all the way down here to do a debt-free scream. Yes. Love it. How much have you paid off? $131,128.08. Way to go. Yeah. And how long did this take?

About three and a half years. Very good. Very good. And your range of income during that three and a half years? We started $130,000, ended at $150,000 plus bonuses. Cool. What do you all do? I am an RN, and I am a clinic manager of an outpatient dialysis clinic.

And I own a restaurant up there in Toledo. Very cool. Good for you guys. So what kind of debt was this $131,000? Scary debt. Scary. The bulk of it was my student loans, personal loans, a Jeep, credit cards. So y'all were like normal.

Yeah. Yeah. Just normal people. How long have you been married? Going on seven years. Yeah. Okay. Cool. So you're just kind of bopping along.

Everything's good. Oh, yeah. And then what happened three and a half years ago? Honestly, I was pregnant with our second son and I was just sitting at the counter. My friend came over just to visit and she just said, oh, so I read this book and she had equal, similar student loan debt. And she goes in, we're on track to be debt free. And I said, okay. I ordered it on Amazon. It took me two nap times to read it. I told Tavis about it and he was just like, okay.

Yeah. So I wasn't super on board at first. I mean, we had a lot. There's probably many stories out there like this and hopefully I can relate to one, but I'm just like, yeah, okay. We paid off another bill. That's great. But I was that guy. I'm that free spirit. You know, I want to go out there and I want to spend the money. And I wanted to buy her things that she didn't necessarily need.

So I'm putting things on credit cards, but she's paying things off. Dude, another bill in the mail. Come on. So about a year, about a year and a half ago, a little over a year ago, I was very, you know, sit down. We had a conversation about it. Don't put things on credit cards. And I stopped, and we had a conversation. Hey, we want to be millionaires, everyday millionaires.

So most of our debt was actually paid off in the last nine months. Wow. Yeah, that's when he finally got on. Yeah, you were kind of just treading water until then. You were paying it off as fast as... He's digging the hole faster. You're filling it in. Yeah.

Yeah. And then all of a sudden, when he kicks in, the two of you together, you can do anything, right? Anything together. Yeah. Yeah. So what was your biggest thing you learned in the last three and a half years of working on this?

Listen to your wife. Right. Seven years in, he still has a half years of working on this. Listen to your wife. Right. Seven years in, he still hasn't. Two years sooner, yeah. Right. Communication is key, though. I tell you what, if you're not on board and you're not doing it together, then you're not doing it.

No. It's very difficult to make the math work when you're not doing it together. Yeah. It was one step forward, two steps back for a year and a half and then yeah or two forward and one back but it's still slow yeah yeah yeah it's a yeah but it just changes everything when you're working together the the dynamic the relationship the math everything changes yeah it's uh and you get done fast yeah i mean you got done fast once you both jumped on. That's very good. Very well done. So what do you tell people the key is? Communication.

What else? Cash. Cash. What do you mean? Cash. Use cash. Even with the debit card, we found ourselves still like, oh, we know there's money in the bank. Swipe, swipe, swipe.

And I'm going on the EveryDollar app like, oh, something else from Kroger, something else from Target. So the envelope system really helped you. Oh, my gosh. Yes. Just amazing. Yeah. And we Facebook garage sale. Oh, really?

Sold everything but the kids. Oh, cool. Literally. Every time he came home from work, he's like, you sold my whatever. Yeah. Yep. Sure did. You don't need a soundbar.

You haven't touched it in seven years. Right. Yeah, exactly. It was in a closet. We didn't need a sound bar. You haven't touched it in seven years. Right. Exactly. It was in a closet. We didn't need it. Absolutely. So congratulations. Thank you.

Thank you. Now that you did this, how's it feel? It feels great. Was it worth it? Yes. Heck yeah. Because you sacrificed. I mean, you sold stuff.

You know, you've scratched and clawed. You've done it. I mean, this is pretty impressive. Yeah. Very, very good numbers. Well done. Proud of you. Thank you. The kids are even on board. We had a garage sale this past weekend and everyone who came in the garage was like, do you want to buy this? Do you want to buy this? Do you want to buy this?

They turned into garage sale sales people. Oh, yeah. I love it. You can't say no to their cute faces. Very good. We got a copy of Chris Hogan's book for you. I retire not returns for everyday millionaires. And that is what your next goal is. I heard you say that.

That's the next chapter in your story. There's a reason you got out of debt. So that you get to move on and have some wealth and be outrageously generous and do all kinds of fun stuff with it. Very cool. Good for you guys. All right. Tavis or Tavis?

Tavis. Tavis and Leslie. You got it. Toledo, Ohio, $131,000 paid off in three and a half years, making $130,000 to $150,000. Count it down. Let's hear a debt-free scream. Three, two, one. We're debt free! Well done!

Woo! Love it. Great job, you two. Great job. Very well done. Rachel is in Lansing, Michigan. Hi, Rachel. Welcome to the Dave Ramsey Show.

Hi, how are you? Better than I deserve. What's up? Good. So my question is in regards to selling a small business. My husband and his partner are looking at selling their business, and they'll be closing on that at the beginning of July, and we just want to make sure that we are intentional about the income that we make off of that business and that we put enough aside for taxes and that we put enough in college savings and retirement and all of those baby steps. So the business is going to sell for just over $500,000 and that will be split 50 50 50 with my husband and his business partner

right now thanks yeah we owe um 35 000 on student loans about 2 000 on a vehicle that'll be paid off in the next couple of weeks um and then we owe 115 000 on our mortgage um so what do we do we've never had this lump sum of money before and we just want to be intentional about that okay and you're getting it all in cash at the closing yeah good that's a good thing to do all right have you uh talked to your tax person about what your taxes are going to be um not too much yet but we have that on our to-do list yeah i'll do that first like like now. Okay.

Like yesterday. You already have somebody that does your taxes? Yes. Okay, sit down with them and get an estimate on what you need to set aside. Because you set that money aside for taxes before we do anything, because we don't want to come up short dealing with the KGB, I mean the IRS. So you want to be on board and take care of them. And I assume you guys started the business from scratch, right?

Yep, he did straight out of high school. Okay. And is there a bunch of equipment with the business? Yeah, that $500,000 is most of the equipment is included in that. All of that equipment is on a depreciation schedule with your tax person. Depending on how long you've owned it and how far you've depreciated it down is going to tell you how much of this $250 is a gain. But you should have long-term capital gains of 15% on whatever the difference in $250

and what the depreciated schedule on that equipment is. And so it sounds like it might be really heavy. So you might only have a $15,000 or a $20,000 tax bill. That's possible. Okay. Okay. So we'll call it $50,000 for the fun of it, which leaves you $200,000, which leaves you enough to pay off your house and all your debt, right?

Right. Okay. And put an emergency fund aside of three to six months of expenses. What's your husband going to do for a living now? That's a good question. We've talked about investing in real estate. He's pretty handy in regards to that. He's talked about going back to school for construction management.

It's not really set in stone. Okay, you need to decide that, too, because the rest of this money is going to be used for whatever that next thing is, probably. Okay, so should we bulk up our three- to six-month emergency fund until that's decided? Oh, he needs to decide. We're not going to sit around for a year and discuss this. Right. You didn't get $2.5 million. You got $250,000. we're not going to sit around for a year and discuss this right he needs to get on with making you didn't get you didn't get two and a half million you got 250 000 okay he needs to get

back to work um seriously there's a lot of stuff he can do now and this just frees you up you don't have any bills which is great and what a wonderful thing but uh let's be very smart about it and keep moving But let's be very smart about it and keep moving. Our scripture of the day, James 3.13. Who is wise and understanding among you? Let them show it by their good life, by deeds done in the humility that comes from wisdom. We are what we repeatedly do. Excellence, then, is not an act but a habit, Aristotle said. We are what we repeatedly do.

Excellence, then, is not an act but a habit. Barbara is with us on Steamboat Springs. Hey, Barbara, welcome to the Dave Ramsey Show. Hi, Dave. Thank you for taking my call. Sure. What's up? I have a what would Dave do question.

We own, me and my husband own a condo that has been rented consistently for the last couple of years, so it's paid in full. And it's other condos in that same building are selling for about $170,000. And then we have a home that we owe still on, which is about $172,000. We're completely debt free aside from the mortgage. And we kind of go back and forth, my husband and I,

whether we should move into the condo and sell the house and be debt-free or whether we should sell the condo and pay off the house or whether we should just hold on to the condo and let it rent and just pay. So what's your household income? It's about $110,000 a year. And how old are you guys? There's a little bit of an age difference. He is 34, and I am 47.

Okay, cool. Well, I mean, one option is to say, okay, we're going to keep both, but get on a really pointed plan that says, okay, five years we're paying off 170. We're going to be debt-free. Okay? Okay. And that option would say we like both of these properties and we would like them in our 20-year future.

If you like both of them and you want them in your 20-year future, that would be a good way to go. I suspect you like your house to live in better than you like that condo to live in. Definitely. Definitely. Yeah. So my second choice then would be to sell the condo and pay off the house but then what you're going to do is you're going to take your 110 000 with no payments in the world

and you're going to start building wealth and you're going to want to buy some real estate for rental because you like rental real estate you've had a good experience with it so you're going to turn around buy another condo later right that's why i think you might just take it and attack it and say okay five years we are paying this thing off thirty five thousand dollars a year for five years we're going to lean on it we're going to take all the rental income from the condo and all the bonuses and we're going to watch our budget and we're going to chunk on this thing and when i'm 52 all this real estate is paid for that's what that's probably what i would do

that's what i want to do yeah because but but i don't want a plan where 30 years from now you still have a freaking mortgage. Yes. That's not a plan. We have been making double payments on it. That's not what I'm talking about. I'm talking about triple payments. $35,000 a year is $3,000 a month.

Right. And so your payment is how much? The mortgage payment is a little? The mortgage payment? Mm-hmm. Is it about a little over $1,000 a month? Yeah, so I'm talking about triple payments, not double. Right. That gets you out in about five, give or take.

It might be a little off, but I'm doing quick math in my head on the radio. But, I mean, that's not that far off. You can do it. Somewhere in there, I don't think I want a long-term future that has mortgages in it, but I also know that if you turn around and sell that condo and then you're debt-free, the first thing you're going to do is start saving money, and when you have $170, you're going to go buy another condo like this, and that's probably only going to take you about five years, you know. So it puts us right back there, right?

Right. So I think we end up at the same place, but only if we lean a little harder on it is the only way I would do it. If I were in your shoes, nothing in this discussion is in the stupid column. Nothing in this discussion is like, I can't believe you people. There's none of that in this discussion. You're doing really good. You've been very smart. You're thinking, you're doing really good you've been very smart you're thinking you're considering

things um and i'll tell you there's a little bit of stress to what you described where you guys go back and forth on what you should do all the time oh we ought to move oh we ought to sell it oh we ought to move oh we ought to sell it and i think once you make your decision and you say no we're just going to keep it and we're going to lean in and we're going to do triple payments and we're going to do that on the budget once you just decide and declare that and then all this other discussions are off the table it actually lowers your stress level because ambiguity lack of you know two choices unmade create more anxiety than painful choices made

and I'm actually prescribing a wee bit of pain here to get you going so So good stuff. Well done. Open phones at 888-825-5225. Carlos is in New York. Hey, Carlos, welcome to the Dave Ramsey Show. Hey, how you doing, Dave? Thank you for taking my call.

Sure. What's up? So I have my daughter. She's ready to finish high school now she's graduating soon uh in june and i i just want to know what what can i do to get her started with like a retirement account because she is working part-time while she goes to high school and she will she will continue to work uh maybe full-time when she's in college. Okay.

I would graduate from college debt-free before I worried about retirement savings. Okay. I would have her pile up cash and make sure she goes through school 100% debt-free, studying something that is applicable and gets on through school fast as she possibly can and coming out the backside of school and getting the quote-unquote big job, right? And once she does that, she's got plenty of time from 22 years old on then to become very, very wealthy. But actually, a better investment than mutual funds is an education that has a use in the marketplace. Not crappy education, not stupid degrees, but, you know, getting a degree in something that is actually usable has a great return on investment that is much greater than mutual funds.

And so that's what I would do. So good question. Thank you for joining us. Open phones at 888-825-5225. Denise is in Baltimore. Hi, Denise. How are you? Good afternoon, Mr. Ramsey.

I'm fine. Good. How can I help? I'm calling because I have an annuity that is getting ready to come up for payment. And at this point, I am 65 years old next month. The annuity is guaranteed to be $854 a month for the next 10 years. It's guaranteed right now for $147,000 in that annuity. I don't need the money.

Where would you suggest I take this money to reinvest it for my family, please? Yeah. I would click on SmartVestor at DaveRamsey.com and meet with a SmartVestor pro in your area to sit down. And I'm probably going to, I don't know how that's sitting exactly, but I'm going to get it invested a lot better than it's invested now. And I don't want it really annuitizing. It sounds like it's got a very low rate of return with the numbers you gave me.

So I want to invest it in good mutual funds, maybe in an IRA, depending on how this thing is structured. But click smart investor at Dave Ramsey dot com. It'll drop down a list of the people we recommend. I'm not in the investment business, a list of the people we recommend. I'm not in the investment business, but these are the people we recommend and they'll sit down with you and give you some other options of what to do with it. But the monthly is not a plan.

I would take the lump sum and do something else with it because you're not getting enough on this based on the numbers you gave me. It sounds like it's about a 5% rate of return to me, which is really crummy in today's world. So you've got to do better than that long term. But get in touch with one of them. They'll sit down with the heart of a teacher, and you'll understand what you're doing before you make the choices,

which is what we always want you to do. Always know what you're putting money in before you put money in it. Don't do it because I said do it or somebody else said do it. That puts us out of the Dave Ramsey Show in the books. money in before you put money in it. Don't do it because I said do it or somebody else said do it. That puts us out of the Dave Ramsey Show in the books. Our thanks to James Childs, our producer, Kelly Daniel, our associate producer and phone screener, Madison, filling in for her today. This is the Dave Ramsey Show. 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. Network anywhere with the Ramsey Network app on your smartphone. Catch all of our full shows,

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