The Ramsey Show - App - Tax Guys Should Not Do Financial Planning (Hour 3)

Episode Date: May 22, 2019

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Music Music Music Live from the headquarters of Ramsey Solutions, broadcasting from the Dollar Car Rental Studios, it's the Dave Ramsey Show, where debt is done, 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. You jump in. We'll talk about your life, your money. It is a free call at 888-825-5225.

That's 888-825-5225. Kim starts off this hour in Phoenix, Arizona. Hi, Kim. How are you? I'm good. A little nervous, but I'm happy to be talking to you. Thank you so much for taking my call. My pleasure.

How can I help? My husband and I moved here to Phoenix in 2009, and we're fortunate enough to buy a home on a short sale. And so today, the value of our home, we have an equity of approximately $180,000, which is great. We have $25,000 in credit card debt. We also have a car loan of $18,000. My husband has been off work for the last five months and has just recently gone back. Fortunately, we had some money in the bank to weather us through that, but we also accrued some of that credit card debt. And he's 52. I'm 63. And so he still has a lot of working years ahead of him. And I'm trying to determine, should we sell our home and go rent until we figure out what other size of home we need or want to have? How much is your house payment?

$1,300 a month. And what is your take-home pay now that he's back to work monthly? Monthly, between $8,000 and $9, and nine thousand okay do you like the house i like the house um i'm not married to the house it's five bedrooms three baths pool i'm home alone by myself a lot it's a lot for me to maintain we're empty nesters obviously and um you know i could probably use a smaller house okay all right ideal in an ideal world but um you could you could live in a smaller house but it's not because of i mean your payment is not killing you no it is not it's the stress of this debt yeah and you said you said you are

how old i'm 63 63 and he is 52 okay good okay no i think you guys just work the baby steps you're making a lot of money and um you know if you want to get rid of the debt real fast sell a car i wouldn't sell the house but um but if you want to work your way through it you can work your way through it the rule of thumb we use on cars is can you be debt-free except the house in two years? Your answer is yes. You can pay off both of these debts, 18 and 25, in two years, making the kind of money you all make. And is the cars that you own, anything with cars and motors and wheels, totaled up equal more than half your annual income? Because then you'd have too much invested in things going down in value,

and you don't have that unless your other car is uber expensive. Well, the car payment itself, yes. No, no, no, no, no, no, no, no. Oh, the value. The value of the car, $25,000, and the other car is worth what? We have two cars, but the other one is... Paid for, but it's worth what? It is worth what? We have two cars, but the other one is... Paid for, but it's worth what? It's worth what?

Probably $2,000. Yeah, okay. So you have less than $30,000 worth of cars, and you guys are making $140,000 a year. Well, he makes about $100,000. Well, between $100 a hundred thousand he works away from home and a seasonal job so he is not employed every single month of the year and that's part of my fear is that yeah trying to pay all these off plus build up the savings again for when

he's not working i mean well you know that he's not going to be working, right? Yeah. So we've got to plan for that. That has to be in the monthly budget. Oh, okay. You have to set aside money to get ready for winter. We're squirreling money away, we call it in the South. The squirrels put nuts in the nest in the summer, right?

Because winter is coming. And so you say, how many months of income do you need to cover next year? Probably three. Okay. Let's get that saved immediately before we do anything else. And then we'll start the baby steps. Okay. I think I'm probably really thinking about selling this car.

That's a doable thing. I was thinking of like the most easy thing to do the car's easiest thing to sell a lot easier selling a house it's a lot less impact on the family a lot less impact on anything else it's okay if you want to sell your house and move down i don't mind but you're but the financial situation you're in does not require it. Okay. All right. I think I just needed somebody with some logic instead of the emotional side of everything.

Well, you're scared because you guys got knocked in the mouth last year. Yes. That makes you a human being to be scared about that. That doesn't make you bad. I mean, that's a normal human reaction. So it's smart to be, you know, very aware right now. Danger, danger be you know very aware right now danger danger you know so let's set the three months aside and let's start working a debt snowball cut up all the credit cards chop them up you guys can talk about the car you can talk about the house i don't care

if you sell either one of them doesn't matter to me as long as we get about the business of getting them paid off if you want to move down in house into something a little smaller and a little more manageable even if it was the same price range. I'm okay with that just because you want to, okay? I wouldn't move up in-house, but your house payment is not killing you. No, it's not the house payment. You know, it's just, you know, when you have a home, it's the maintenance. So I know that we're going to need air conditioning.

I know that we're going to need to paint it due to the HOA and all those things. So all those things on top of trying really hard to bank the savings again because we have nothing left in savings anymore. Well, I think you get that three months built back up, and that's not really an emergency fund. That's your Christmas account for your three months. Christmas is going to be in December. You've got to plan for it. You have three months.

You're going to be off. You've got to plan for it. And then we start our baby steps. And you have another $1,000 as baby step one. And then you start paying off these credit cards. And then you pay off this car and or sell the car and move down. And then you're debt-free, everything but the house. And then let's kind of see how the house feels then.

Well, that's a good way of looking at it. I did tech with a tax guy, and he said he would sell the house and fund an IRA account because we have absolutely no money in retirement funds or anything like that. Tax guys should not do financial planning. They suck at it. Okay. All right. Well, I feel a little calmer right now i appreciate your advice and i feel like i can take a deep breath and yeah i'm okay i'm okay but i think you might sell this house to accelerate your retirement planning and that kind of stuff

and to get in a house you kind of like more and are less worried about maintenance and that kind of stuff, and to get in a house you kind of like more and are less worried about maintenance and that kind of junk, you don't have a pool to keep up and all that kind of stuff, I mean, you might sell it, but I think you'll make a better decision about whether to sell it once you're debt-free and have three months in the bank. All right. Thank you so very much for your time. I appreciate it. Honored to talk to you. Thank you for calling in. This is The Dave Ramsey Show. Let me tell you a story about two families that are very much alike in a lot of ways. Both families have two working parents and a couple of young kids.

Each has debt and has struggled to make ends meet. But they're starting to make headway with their budgets and smarter decisions with money. They have dreams and plans, and the only real difference is that one family has the right amount of term life insurance, and the other doesn't. Big difference. If one of the parents die, and that does happen, their well-being would be destroyed. Paying for the mortgage, utilities, food, and that does happen, their well-being would be destroyed. Paying for the mortgage, utilities, food, and other bills would be impossible, let alone saving for education or retirement.

That's why every day I talk relentlessly about getting term life insurance. Just go to ZanderInsurance.com or call 800-356-4282 and see how inexpensive it really is. Be the family that takes those deliberate steps to be different and responsible. It really does make you the hero of your story, and it puts you on course for better things ahead. The Proximity Principle, the proven strategy that will lead to the career you love. A huge new book by Ramsey Press with our own Ken Coleman, Ramsey personality, career expert. On the line, calling in from Los Angeles. Hey, Ken, how's your day?

It's going well, Dave. How's everything back there in Nashville? Cooking along, man, cooking along. Big sales. We just got the report in from Amazon. They sold a bunch of your book last week, brother. Well, that's exciting. That means a lot of people want to get serious about being all that they were created to be. That's really rewarding. We're excited. The message is catching on. It really is. It's on fire. So what have you been doing in L.A. today?

Yes, sir. Well, we got here early this morning, came in from Phoenix, and went right in to tape Home and Family, which is a very popular show on the Hallmark Channel. All the Ramsey personalities have been on there. I had a wonderful segment with them, which will air tomorrow. So if you're a Hallmark fan, check your listings. That will be on tomorrow. And then we're doing radio interviews this afternoon. And then we'll be doing a large YouTube show called Exploring Minds later this afternoon and up early tomorrow for KPLA. So just a packed day.

Very cool. Very cool. Very cool. And then you guys are heading on over to Sacramento? Yes, sir. Our final book signing. We had an awesome time last night in Phoenix, but we'll be in Sacramento at the Barnes & Noble on Arden Way. That's 6 o'clock p.m.

And as we've done at all the other locations today, we're giving away $500, $450 in cash, and then a $50 coffee gift card to get that proximity principle in action. So that's going to be fun. You've got to be present to win. So we'd love to see a good crowd out in Sacramento tomorrow night. Well, they're going to have to work to beat last night. You guys had a huge crowd, almost 200 people there in Phoenix, huh?

Yes, sir. It was just a phenomenal group of people as well. Just terrific energy in the room. We did a version of the Ken Coleman show and had a ton of questions and just a great time. Signed books for over an hour and a half and just a wonderful group of people and all excited. Just some great stories. We're hearing some great proximity stories and more importantly, Dave, just a lot of hope from people. So if someone's just tuning in for the very first time just now and they've never heard you and me talk about this stuff, what are the important things someone needs to know about the proximity principle,

the proven strategy that will lead to the career you love? Yeah, what they need to know is that getting where you want to go is not as scary and it's certainly not impossible. And what we want to do is we want to identify people that know about the craft or the field, the sector that we want to be in. So specifically, who are the people that are winning in the space, in the position that you would eventually like to get into? And we call those some of the right people and in the right places.

Or, you know, where is that craft happening? What are some opportunities for you to observe, to learn more about what it takes to get there? And so the right people, Dave, plus the right places, which, as you know, there's five people that we detail in the book and five places that everybody needs to be aware of and then get around those people and get in those places. And when you are around the right people and in the right places, opportunity happens. That's what everybody's looking for, the opportunity to be who they want to be, the opportunity to do what they love to do.

And so we, as you know, we've got a proven path, a clear path on how to get there. And we're going to walk the reader in this book right up to those people and right into those places. And when that happens, momentum, just like the baby steps and getting debt free, momentum happens when we're intentional to get around those people in those places. Blindly filling out 5,000 job applications will not get you a job anymore. No, you might as well play the lottery while you're at it because it's just as effective. If you want to build wealth, you don't do it through the lottery. And if you want to move into the space you want to be in and then move up,

you don't do it by just blindly submitting resumes. As you've heard me say on the show many times, a resume is worthless without a relationship. You've got to know someone who will open the doors for you. That's how you get looked at, and that's how you get the opportunity to prove yourself. And so that proximity principle, again, so effective for people, whether you're starting, whether you're switching, or you just want to advance up the ladder. It really is the secret sauce. We announced a position was opening a few weeks ago to our leadership team.

One of the young guys on the leadership team came to me and said, hey, my best friend's dad is the guy. And we hired him this morning. Right. That's exactly how it happens. That's exactly right. We have so much trust in that leader. He's already been through an incredible process to get on the team at Ramsey Solutions.

And not only that, he's proven himself as a leader. So his reputation speaks volumes for that guy that we ended up hiring. It's just tremendous when you can leverage the relationship and the credibility of those relationships. Yeah, it's a big deal. It speeds everything up for everyone. And we would like to, at Ramsey, we'd like to respond to the 22 000 job applications we get

this year literally 22 000 applications we can't even send you all a no that's right we don't have time to do that that's ridiculous 22 000 we hired 200 people you got no chance of getting out of that pile and it's not because we're snobs. It's not because we protect our own or we're a cult or something like that. You just logistically can't get through 22,000. We can't find them. And so something has to cause that thing to come out of the pile, and it's not a magic wand. You know, there's not a magic resume writer that causes it to jump out of the pile. It's someone somehow put themselves in a position because they were

around here or they're around somebody that was around somebody that was around here that caused that thing to come out of the pile. And that's what the proximity principle is all about. Absolutely. It just takes fear and doubt and pride and it puts it in its place where it needs to be back behind you so that you can move forward. What people are finding, Dave, as they read the book, we're seeing this all over social media, we heard it even last night, people had read the book but came and wanted to get it signed, is that for the first time in their lives, they've got a clear idea of how to actually get there. Because it's not as difficult as I thought. I can be intentional to, A, find out who the right people are and what those right places are.

And in the book, Ken, you gave me examples. You clearly showed me that it was possible, and I'm excited and I'm taking steps. And that's why we're so excited about this message. We want people to be who they were created to be. We know when they do that, they're going to do work that matters, and the world is going to be a better place. Very cool. Very cool. Good for you, man. Proud of you. This book is going to be a better place. Very cool. Very cool. Good for you, man. Proud of you.

This book is going zoom, zoom. You're working your butt off out there. Reminder, folks, Sacramento, California, Barnes & Noble at Arden Fair this coming Friday evening. Ken Coleman will be there at 6 o'clock. The proximity pencil to be signed. And, of course, giving away $500, $450 in cash and $50 in a coffee card to get you, I want to give you a chance to meet with somebody and get in proximity with them to cause your dreams to come true.

The proven strategy that will lead to the career you love. That's the book. Ken, congratulations. Thanks, Dave. We're having a blast. We'll see you soon. Proud of you, man. This is the Dave Ramsey Show. Thanks for. Ken, congratulations. Thanks, Dave. We're having a blast. We'll see you soon. Proud of you, man. This is the Dave Ramsey Show.

Thanks for joining us, America. We're glad you are here. Aaron is next in Wichita, Kansas. Hi, Aaron. Welcome to the show. Thanks, Dave, for taking my phone call. I'll try to make this as concise as possible. My wife and I recently got a fairly large inheritance from my mother's passing,

north of $400,000. We've got zero debt, a gross income of approximately $60,000. We would like to begin our own retirement and possibly have some stash to lay for an inheritance for our own children. We have three kids who are four years old. So should we stash money in higher-risk retirement investments versus lower-risk investments to allow for cars that we're going to need, health emergencies, home improvements that we want to make in the future? Okay. Well, I think you can map out what you plan to buy, cars and that kind of thing,

home improvements, and say we're going to spend that amount of money. Anything else other than that we're going to save up and pay for so we don't touch the rest of the money. But, for instance, if you say we're going to spend $100 on a house, on home improvements, a car, and a trip, and we're going to invest $300, they don't necessarily have to be retirement investments, but they would be long-term investments,

and then you keep your hands off of that. And that's not only for your inheritance. It's also for just general wealth building. Wealth building gives you three options. One is an inheritance. One is retiring with dignity. And the other one is outrageous generosity. But that $400,000 in about seven years invested well would, well, $300,000 would be $600,000. And invested well seven years later would be $1.2 million. Yeah. So get with a Smart Investor Pro and get about $300,000 of it invested and give and enjoy $100,000 of it. Thank you. Robertson, San Antonio. Welcome to the Dave Ramsey Show, Robert.

Hey, Dave. Great show. Thanks for taking my call. Sure. What's up? Hey, Dave, great show. Thanks for taking my call. Sure. What's up? Hey, Dave, part of my portfolio includes $318,000 in an IRA. And my financial advisor is saying at some point we should look at a Roth conversion. And I wanted to get your take on that.

How old are you? I will be 58 in a month. I'm borderline. Yeah. How much is your portfolio total? What's your net worth? 3.2 million. Okay.

Well, you're in great shape. Yeah, I mean, you can convert it. The benefit of converting it, okay, if in a traditional you've got a mandatory withdrawal that begins at 70.5. Right. Required minimum distributions that begins at 70.5. Right. Required minimum distributions, RMDs, okay? And in a Roth you don't have that because it's tax-free. So if you convert it, it's probably going to cost you $100,000 in taxes, and that you're going to pay separate,

and so then you're going to have $300,000 growing tax-free rather-free rather than 300 growing tax-deferred. If you leave it alone a long time past 70 and a half from 58, it is a no-brainer. Yes, convert it. If you're going to use that money in your early 70s, it starts to be borderline mathematically. I don't think you're going to use it. You've got a big enough net worth. You could leave it alone, let the thing cook with tax-free growth all the way into an inheritance. Yeah, right.

Okay. And then one of the things he had mentioned is that we could do it, you know, bits at a time. I wouldn't do that. You've got the money. Yeah. You've got a cash position laying around somewhere of $100,000 that you could use to pay the taxes, right? Oh, yeah. Yeah, I figured you would.

Yeah, that's what I'm actually, I draw from some mutual funds to get a monthly payment out of it, you know, pay myself on that. Yeah, you just hit one of those for $100,000 and, you know, pay the taxes and roll the whole thing to a Roth, and then it's going to grow from 300 so let's see at 65 it would be 600 at 72 it'd be a million two wow if it's invested in good mutual funds it'll double about every seven years at 11 to 12 something like that so roughly i mean that's rough and dirty but dirty, and that's going to be 100% tax-free and you will not have the RMD on it. So you keep control of it that way. You use whenever you want. And the cool thing is, with it being tax-free growth, I'm going to let that sucker sit there and compound all the way into an inheritance, and I'll use other money to live my life with if I'm in your shoes. Did you inherit any of this money?

The 3.2, how much of it did you inherit? None of it. So you're an everyday millionaire from nothing. It's a remarkable story. I hooked up with a couple of very incredible entrepreneurs. I was lucky enough to invest in the company, and after 16 years of hard work, we sold it. And that's where the bulk of it came from? Yes.

You had an ownership position in your employer? I had, yes. We sold it for the last time a couple years ago in 2017. Wow. Good for you. Congratulations. Well, I appreciate that very well done so it's a lot of fun man a lot of fun it's a lot of fun it's letting us do a lot of

things uh that we wouldn't have been able to do for sure absolutely yeah you get to be generous in ways you never thought even that you'd even make that much in a year much less be that generous in a year yeah you're right one of you know one right. One of my goals that we thought of many years ago, about 17 years ago, was to be able to buy our children homes, and we were able to do that as well. Cool. Well, make them sign an agreement to never go in debt so they're the last ones. That's exactly right. That's exactly right.

I love it, man. That's great yeah you broke you completely changed the family tree you broke the chain permanently well it it's uh it's been very rewarding tough work um some heartbreak but uh we made it work absolutely always a lot of that always a lot of that well congratulations sir very well done proud you. All right. Austin is in Little Rock. Hey, Austin, welcome to the Dave Ramsey Show. Hi, Dave. Thanks for taking my call. Sure. Hey, I've got a question for you.

My wife and I are debt-free, and we've got an emergency fund set up of about three to six months, and I'm trying to figure out where to go next. We're in a rent-to-own home that's worth way more than we can afford but the man was super generous in letting us do that or do i need to save up to buy a home and then also i'm only putting 10 in retirement right now i'm trying to figure out which way to go on the baby steps yeah well baby step four is 15 into retirement sometimes people put off baby step four and save for their down payment. We always call that Baby Step 3B after you've got your emergency fund in place and you're debt-free. The rent-to-own thing is probably not going to work out for you. Okay.

Because you're probably not going to end up owning it. Gotcha. And you want to get in something where you do own it as soon as possible. So if you tap the brakes for two years on retirement savings in order to build up a good, solid, fat, juicy down payment, that would be cool. What do you make of your household income? I make $61,000, and I'm married. My wife stays at home with our three kids. Okay. All right.

So how much can you save in two years for a down payment if you quit retirement temporarily? Well, I'm a teacher, so my retirement is kind of weird in Arkansas. It's mandatory. Yeah, it's basically mandatory. Yeah, okay. So you can't get out of that. You don't have a choice. Okay.

Well, I mean, how much can you save in a couple years? Well, that's my B part of the question is I've had a side hustle of mowing yards and my wife's leveling the question is I've had a side hustle of mowing yards, and my wife's love language is quality time. So I'm trying to figure out where do I keep the side hustle going as much as I can, and when do I slow down on that? Yeah. Well, I think the only way I would keep the side hustle is if it was for a short period of time to buy a house.

Okay. Which she probably would go along with that if she knew there was an end to it. Gotcha. And say, okay, for two years we're going to bust it and get a down payment for a house. Is that okay? And she's like, okay, let's do that. And so it's like she's sacrificing too, in other words, while you're working your butt off. She's sacrificing the quality of time in order to do that.

But it's up to you, you know, what you all want to do and how you want to play this through. But that's a good way to look at that at that so hey good question ma'am thank you for joining us open phones at 888-825-5225 david is in the ramsey baby steps community i am in baby step two working my debt snowball, do loans against my 401k count in my debt snowball? Yes. However, you cannot pay extra monthly on a 401k loan. You can only pay the set amount that is agreed to or pay it off. And so when you get ready to pay off the 401k loan, when you get down to it in your debt snowball, what you'll have to do is just build up that amount in savings and then pay it off in one fell swoop and then go back to a normal debt snowball on the other debts that you've got to do, continuing to work down the list smallest to largest in that point. So that's how you do it.

Hey, thanks for being a part of the Ramsey Baby Steps community. If you didn't know, that is the largest Ramsey Facebook group out there. It is a private Facebook group, but we will certainly let you in as long as you burn nice to people in there and so forth. We don't allow trolling in there and that kind of stuff. But jump in there. The Ramsey Baby Steps community, the official Ramsey community run by Ramsey people. But it's not. I mean, there's thousands of people in there interacting, and it's a lot of great threads, a lot of great information, a lot of great community supporting each other as we're working through this whole thing together to get out of debt so that we can build wealth,

so that we can retire with dignity, leave a quality inheritance, and be outrageously generous, living like no one else, so that later we can live and give like no one else. This is The Dave Ramsey Show. Thank you. 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 in Steamboat Springs. Hey Barbara, welcome to the from Steamboat Springs. Hi, 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. Yeah. to live in better than you like that condo to live in 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're going to turn around and 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, $35,000 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? about a little over a thousand yeah yeah so i'm talking about triple payments not double right that gets you out in about five give or take maybe 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 considering things. 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, 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 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 in June. And I just want to know 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 continue to work maybe full-time when she's in college. Okay. I would graduate from college debt-free before I worried about retirement savings. 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 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 ramsley 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 annuityuity 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 i'm probably gonna 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 smartvestor at DaveRamsey.com.

It'll drop down 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 uh which is really crummy in today's world so you got it you 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. 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. Hey, it's Kelly, associate producer and phone screener for The Dave Ramsey Show. If you would like to do your debt-free scream live on the show, make sure you visit DaveRamsey.com slash show and register. We would love for you to come to Nashville and tell Dave your story.