The Ramsey Show - App - The Difference Between HSAs and FSAs (Hour 3)

Episode Date: November 16, 2018

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🎵 Live from the headquarters of Ramsey Solutions, 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. You jump in, we'll talk about your life and your money. It's a free call at 888-825-5225. That's 888-825-5225. Starting off this hour is going to be Sean in Colorado Springs. Hey, Sean, welcome to the Dave Ramsey Show. Thank you for taking my call.

Sure, what's up? So I have a quick question and then I'll take it off the air, because I'm actually at work, and I know you want to quiet in the background. What is the difference in your take on HSAs and flexible savings accounts? Okay. Well, they are completely different things. The health savings account can only be used for medical, and you save money in that pre-tax, and you can use it anytime in the future.

A flexible savings account has to be used in that year, and flexible savings accounts can be used to cover medical deductibles. They can be used for eyeglasses and dental. They can be used to cover medical deductibles. They can be used for eyeglasses and dental. They can be used to pay daycare. They can be used for whatever your company HR team has put together that allows the FSA to be used for. But whatever you put into the FSA, like let's say you put money in there for daycare, it has to be spent on daycare in that calendar year or you lose the money. So you never overfund an FSA. You always slightly underfunded.

And so you put money in there. The HSA can just keep building and building and building and building, but can only be used for medical. Both are pre-tax. Both can come out of your check if you want them to. And so what I recommend the FSA for are very, very predictable things that you know you're going to buy. Okay, we've got a kid that has braces. We're going to pay for the braces through the FSA, and it's going to be this much this calendar year, period.

We're going to pay for daycare through the FSA. The beauty of it is every $1,000 that you run through the flexible savings accounts saves you $300, $400 in taxes. And so it's as if instead of you paying your daycare $1,000, you're paying them $700 and the government's paying them $300. It's about the way that works out. So the FSAs are great to do pre-tax spending on things that are predictable and that you know you're going to do. The HSA is obviously attached to your health insurance plan

and covers a large deductible lower premium health insurance plan, but again, only can be used for medical and can build up. So I would use them both if you have the money available in your budget because they're for two different things. I would not use the FSA to cover medical deductible unless you had a chronic illness and you knew you were going to break the deductible every year. Or you had a predictable thing this calendar year and you were going to break through the deductible. You could run that through an FSA.

But I wouldn't use it to cover medical deductibles in a normal flow of life. Vince is with us in Phoenix. Hi, Vince. Welcome to the Dave Ramsey Show. How are you doing, Dave? First-time caller, long-time listener. Well, thank you, sir. How can we help?

I'm in so much. I'm in a depot, and I've been trying to get myself out of it. Okay. I've got three loans, basically vehicle loans. Stupidity is what got me there. And then I'm trying to

basically trying to get myself out of debt. I went to trying to I got a 2016 Chevy Chevrolet. Took it down to a car dealership. They gave me a price. Not much what I was asking

for, but, you know, tried to do it that way. So I went to a bank to see if I can get a difference in the loan to get it paid off to make payments to the bank instead. But the banks won't touch me because of my credit.

Yeah, bad credit. I'm basically just trying to get out of debt. I'm basically trying to get rid of the brand-new truck. All right, let's stop a second. So the car, the Chevy Silverado, let's start with that one. What is it worth? Okay. They got it priced at $24,000.

The dealer? The dealer. Okay, that's not what it's worth. That's wholesale then. Yeah, that's what they offered me. So you need to look up on Kelley Blue Book what the car is worth because you probably need to sell it instead of selling it to a dealer. I'm going to guess and

say it's worth 27 or 28 if the dealer offered you 24 because they're buying it at wholesale to resell it to make a profit there's nothing evil about that but they're buying the car cheap it's what they do so uh what do you owe on the silverado 32 okay So let's pretend you could sell it for $27,000 and it's worth $32,000. Then you'd need $5,000 and we've already figured out you can't borrow that because your credit's bad. What do you make a year? I make between $50,000 and $60,000 a year. Okay. All right.

And you're single? No. Does she work outside the home? That's my other problem. I'm trying to help pay her debts, too. Are you married? Yes. Okay.

So they're your debts. All right. And so how much does she make? She makes probably about $32,000, $33,000 a year. Okay. All right, and so how much does she make? She makes probably about $32,000, $33,000 a year. Okay, all right. So we've got a $90,000 household income that you need to save up $5,000 in order to get the Silverado sold. Now, the next car, what is it? It's a 2018 Chevy Trax.

Okay, and what do you owe on it? $32,000. Okay, and what do you owe on it? 32. Okay, and what is it worth? I didn't even look it up, but I tried to refinance it. They told me it was about $9,000 over whatever they were asking for. Okay, that's loan value. Again, that's not what it's worth. And so the same situation there.

It sounds like that's going to be worth probably in the $25,000 or $24,000 range. When you look it up on Kelley Blue Book, you need to go to kbb.com and look these up on private sale. What's the next vehicle? It's a Harley Davidson. Okay, and what do you owe on it? $8,000. Okay, and what is it worth? $6,700. $, and what is it worth? $6,700.

Who said? I took it to one of the... The Harley-Davidson. One of the right now places. Well, right now owns Harley-Davidson now. Yeah, okay. But bottom line is, again, you're trying to sell these cars at wholesale. So that car, that Harley's probably, if you were to put it in the newspaper or put it on Craigslist,

it's probably worth about what you owe on it. Yeah, probably. So let's look that up and figure out what it's worth and get it sold. And then let's figure out which of the other two cars we're going to sell first when we save up $5,000. And you need to get yourself on a tight budget. Beans and rice, rice and beans. You need to start selling everything in sight that you can get your hands on and clear yourself out of these cars.

You are freaking car poor. This is a ridiculous situation with cars. And you've got to get shed of all three of these vehicles. I agree with you, your conclusion on that. But it's probably going to take you a year. 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 a struggle 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 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. Jake is with us in Maryland. Hey, Jake, welcome to the Dave Ramsey Show. Hey, how are you? Better than I deserve. What's up in your world? Not a whole lot. Quick question for you.

My wife and I are in baby step two, and we have recently put our house on the market. It went on the market less from a week ago today. We owe almost exactly $100,000 on it, and it's for sale for $157,900. So when all is said and done, we're hoping to walk away with about $45,000. My question is, should we use that money to pay off debt, or should we use that money to turn into the next house we're going to be buying? Why are you selling your house? We need a bigger house.

Okay. Why don't you wait to sell your house until you get out of debt? Yeah. Okay. Good point. How much debt do you have, not counting the house? $28,000. And what's your household income?

$82,000. Okay. Yeah, I mean, I sympathize with you needing a bigger house and wanting to move to a bigger house, but I think we probably clear the debt before you do that. That way you don't have this conflict. Because right now, you know, I would tell you to use the money to clear the debt, which means you're not going to have the money to buy another house. Sure.

So you end up renting and i'd rather sit there i'd rather sit there uncomfortable small for a year and get out of debt and then sell it and move up at that point and then take the cash instead of yeah pouring it into debt port into another house exactly exactly yeah, I think you're, you know, I get that you're wanting to move and probably not going to make your wife or your real estate agent happy that I'm taking it off the market, but that's what I would do. I would take this year and get everything cleaned up and then, you know, maybe this time next year put the house on the market

or however long it takes you to get the $28,000 cleaned up and make an $80,000. But if you lean into it really hard, you ought to be able to do that in about a year. So good question. Thanks for joining us. Andy is with us in Chicago. Hi, Andy. How are you? Hey, Dave.

Me and my wife are new listeners as of July, and we are currently on Baby Step 2, and I just have a quick question. We are just down to our car loans and both of them are leases um one lease is up in february and we already have the money saved up to purchase the vehicle outright cash that my wife wants and then my lease is up in two years um but my company offers me a uh truck, which is $600 a month, plus they pay for all my fuel. Or I can take a company vehicle, and then I don't have to pay anything or would not get a truck allowance. Which do you think I should do at that point?

At the two-year point? Yes, at the two-year point. Okay. Or sooner if you just sold the car you got. Because you've got a truck allowance now against that lease now, right? Yes, it takes care of the lease completely now. Yeah, okay. I mean, you can run the numbers out, and you'd have to do some detailed calculations,

and I have probably, I don't know, 50 or 100 times over 30 years I've looked at it. Almost every time I look at it, it is a lot cheaper for you. You come out ahead if they furnish you the vehicle. Because by the time you figure repairs and loss in value into the equation, which is real, I mean, if you buy a $20,000 truck, it goes down in value because you're apparently on the road a lot, aren't you? Correct. Yeah, and so you destroy a vehicle's value by the miles you put on it,

by being a road warrior. And so, I mean, if you buy a $20,000, $30,000 truck and you run the wheels off of it and they give you $600 a month and they give you fuel, that doesn't cover all the repairs and the loss in value and the insurance cost. So, translation, you come out better if they just give you the keys to their truck. Correct. So I can use the vehicle as if it's my own personal vehicle also.

Okay. Well, that's nice. I mean, it doesn't sound like, unless you're driving a very inexpensive vehicle, that $600 a month is going to cover it. Because you think about it, a $30,000 truck or a $20,000 truck, either one, they're going to lose more. I mean, you're only getting $7,000 a year. Correct. Correct. And they're going to run the wheels off the thing.

You're going to lose more value than that. Not to mention you've got all the repairs, tires, oil changes, all that stuff, right? So, yeah, a company car is going to come out better for you. And I would get there sooner rather than later. I mean, I'd look at that car lease and see if you can't get out of it by selling it. And that's an option also because since we've listened to you in July, we've been able to take care of $120,000 in debt. Good for you.

Yeah, so add up. I mean, find out what the early buyout is on the car versus what you can sell it for and see how far in the hole you are. And if it's not too shocking, I mean, if you can write a check for $4,000 or $5,000 or $3,000 or $4,000, you're going to come out ahead by just going ahead and flipping that thing now and taking that company truck. Yeah, you're absolutely right. I didn't think of it that way. Sooner rather than later. But if it's going to cost you $10,000 to get out of it, you may want to ride it out to the end.

You know, you just look at it and figure it out but you can crunch some numbers on it they're all the numbers are right there in front of you just don't leave stuff out and that's what people do in these scenarios so you're wise to think it through this way well done andy well done you're killing it man proud of you open phones this hour at triple eight eight two five five two two five now andy did not ask this question but some of you open phones this hour at 888-825-5225 now andy did not ask this question but some of you have in the past so i'll go ahead and address it because it's part of that same subject just because your company gives you a 600 a month car allowance does not mean you can take out a 600 car payment and people do it all the time because when they fire you from the company or the company goes broke or they change their policy and no longer want to give you a 600 car payment or 600 car

allowance you still got the car payment because they didn't borrow the money you did and you're the one losing your butt when it goes down in value and you're the one that's got all this other stuff on you now again that wasn't and's question, but somehow people have in their head, oh, by the way, you're a road warrior. They give you $600 a month, whether or not you have a car payment. So buy something that you pay cash for, and if you're running the wheels off of something,

don't destroy a valuable vehicle. Destroy a less valuable vehicle. If a $10,000 truck will get the job done, I'd rather lose the money on the $10,000 truck than I would the $30,000 truck. Because you're turning, you know, when you start putting 40, 50,000 miles a year on a car, you are disintegrating its value. And I know the trucks, I know you're taking care of it. I know all that, but I'm talking about what you can sell it for, the actual value of your asset is going down so rapidly. And so you drive the least vehicle when you're a road warrior that you're having to pay for

it, you drive the least vehicle that gets the job done, because that way you lose the least money as it goes rapidly down in value due to the miles you're putting on it. Now, what is the least vehicle that'll get the job done? Well, you're in it all the time. It needs to be reasonably comfortable. So I'm not putting you out there in a freaking smart car. You'd be at the chiropractor every week because you live in this vehicle. So it needs to be a comfortable, good road car. And the second thing is it's got to be reliable because you're running the wheels off of it. And you don't want to be stuck out in the middle of Egypt somewhere with no dad gum. I mean, with the thing breaking down on you all the time.

But short of that, we're not trying to impress anybody with the sex appeal of your road car. You're running the wheels off of it. So get something that is reliable and comfortable and as cheap as you can possibly get that does those two things. Reliable and comfortable. Generally, that's probably going to put you in a $10,000 to $15,000 car range. You start spending more than that on a road car, you're just destroying too much in value. You don't take a nice $30,000 BMW and destroy its value by running it down the road like that. Don't do that.

That's just financial suicide. If you want to have a car that's not your road car, that's a third car. I'm okay with that. But whatever you're running down the road, destroy a cheaper car. And don't take out a car payment just because you've got a car allowance. They're not tied to each other. You get the money anyway. There's nothing smart about smartphones if your wireless plan is blowing your budget each month. Pure Talk USA offers smarter wireless with unlimited plans starting as low as $20 per month.

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Talk USA that we invite you to try our service risk-free. Just visit puretalkusa.com, enter promo code SAVEDAVE, no spaces, and receive 50% off your first month. That's puretalkusa.com, promo code SAVEDAVE. In the lobby of Ramsey Solutions, John is with us. Hey, John, how are you? Hey, Dave, I'm great. Thanks for having me here today. Absolutely. Where do you live, sir?

Indianapolis, Indiana. Cool. Welcome to Nashville. And all the way here to do a debt-free screen. Yes, sir. Very cool. And how much have you paid off? I paid off $46,000.

Good. And how long? 31 months. Good for you. And your range of income during that time? It was about $48,000 to $53,000. Cool. What do you do for a living?

I do insurance claims. Good for you. What kind of debt was the 46? Most of it was student loans. There was about eight left on a used car out of that 46. How old are you? 27. 27.

Okay. So you've been out of school like five years. Yep. But two and a half years ago, something happened. Yes, sir. What happened? So I was sitting there, and I had taken the class, and I had the head knowledge, but I didn't. You mean financial peace?

That's correct. Okay. I had read the books, but I didn't change any of my behavior, which, spoiler, doesn't work that way. I'm sitting there, and I'm making a budget that's really just keeping track of my dumb decisions.

I find out I've got about $40,000 left, just about, and it's almost going to tick over into $30,000. It's a big moment for me. I realize, I find out that I have more more debt that i i didn't realize we got another student loan out there it's it's it was more than i had paid off in the previous year so that was a kick to the teeth and i felt like i had just lost a year of progress and i'm sitting there and i'm i'm looking more like arthur than ben and uh and so I pouted for a little bit. But I had to look at myself and say, you know, this is my mess.

This is my debt. Nobody else is going to do it. I have to clean it up. I've got to take charge of this and change my life because I'm not doing it right now, and I don't want to live like this. I don't want to live like so many Americans are today, and I think I've got a better shot than that. Amen.

So you just had a come-to-Jesus moment with yourself, huh? Pretty much. It was just grabbing hold of my own behavior and my own decisions, really. Very cool. So what do you tell people the key to getting out of debt is? You did this in 31 months once you got serious. That's good. Yeah, yeah. The key is you have to believe it um you know it's the destination it's not a unicorn

um like my brother he saw what i was doing and he graduated college debt free i've got a friend chris who graduated he was debt free now i've got travis he's on his way there's tons of people and that's really truly been i'm excited for myself but seeing all the people around me really get it and really see it and and turn you know their their ship and and really move in a new path is so incredible like that's amazing to see and and there's people in the lobby here today who are so nice and and they're all either paid off their debt or or they're on their way to it so this is something that is achievable. And if you're listening today, you can do it.

Yeah. Amen. Very cool. Very cool. So really just believing is a big start. So once you started believing tactically, what things did you do to get out of that? The things that people need to do. Definitely.

The budget is the crux of it. The budget is your roadmap to the destination. If you're trying to go someplace you've never been before and you don't have a map, you're probably not going to get there. You shouldn't be surprised when you don't end up where you think you want to go. Follow that very religiously. It's just every day. Pushing in that direction every day with every cell in my body. There was decisions that I made.

Like I had the driver's side of my car duct taped up for about two years because I wanted to be debt-free more than I wanted a working car window. It helps stay out of drive-throughru food, too, so that helped as well. I moved to a cheaper apartment twice. The second one, we got out, and my dad was kind of like, are you sure about this one? I was like, absolutely. Those decisions that you just make every day.

There was one month where we did a super frugal May is what we called. And I just wanted to see how deeply I could cut down on this budget, like how much was fluff. And I didn't go anywhere. I didn't do anything. Read books. Turns out the library is free. Went on walks.

I ate rice and beans literally for about 10 days. And Dave, rice and beans isn't good on the first day. It was not good on the 10th day. And so I got to the end of that month and I was still alive. I realized I can do this. There's a lot of fluff here and it's not what's important. Very, very cool. So what was the last debt you paid? Yeah, the last debt was student loans. And when you push the button and it was gone and you were done, how'd it feel? It was incredible. I went home. I knew when I was going to be able to pay it off. I went home. I think it was Memorial Day weekend. I did it and I was so excited. We celebrated that weekend. It just felt like a thousand pounds had been lifted off my shoulders. You know, I had at that point,

when I first started, it wasn't a whole lot. It was like an extra hundred, an extra 200, maybe per month. At the end of the month, at the end of my debt-free journey, I was putting like 50 or 60% of my monthly income towards the debt. So when you have no debt and I have 50, 60% of my income per month back, you can do some really incredible things with that much extra direction money. One of the things I did, my baby step 3B essentially was proposing to my girlfriend. So I got a fiance here, and I flew down. Her family was in Florida at the time, and I surprised her by flying down on like one Friday and proposed to her in the middle of Florida.

And that's the stuff you can accomplish when you're debt-free, when you have the ability to do these things. Cool. So when are you getting married? September 2019. All right. September 7th. We're saving up for the wedding it's

gonna be in cash you bet my bet very cool very cool well done so how much confidence how much more confident do you personal confidence do you have now than you did uh it's night and day i mean i is you uh, she was always sort of nervous that, that I was going to be on this death march essentially for the rest of our lives. And I kept saying, no, like there's an end goal. Like this is temporary pain. And you know, you're thinking about, well, what am I spending? Where's it going? Uh, now it's, I've got an emergency fund and everything's going to be okay. I had, I had a lot of car repairs that happened during this process and I always had the emergency fund there to turn it from a disaster to a minor inconvenience. And now when you've got the fully funded emergency fund, you've got no debt,

it's, I can do whatever I want. Yeah. Who was your biggest cheerleader? Probably my friends. My friends were really good. They thought it was really weird at first because like I said, I was kind of a hypocrite. I was doing it really poorly before this period. So I shut up about it and I just did it for about six months. And then after that, they were kind of, you know, they started to get on and they were really excited about it. My family was always there for me. It was really good. I didn't really have a lot of detractors. The only thing that got close to like a detractor was there was a lot of people who were, who would say, you know, well, that's going to be fun, like for a little bit, like until

you have to go back into debt or like, you know, it'll be nice to be out of debt for a while. And they just really didn't understand that this isn't a temporary thing. This is a permanent lifestyle. This is a change in your legacy. It's incredible. Great. Very cool.

Proud of you, brother. Well done. Got a copy of Chris Hogan's book for you, Retire Inspired, number one best-selling book. Thank you. And that is the next chapter. We're going to close the debt chapter and open up the wealth chapter.

You'll be a millionaire before you know it. And I will be one of our everyday millionaires. And, of course, outrageously generous as you go along. And congratulations on the engagement. Thank you. Very well done. John from Indianapolis, $46,000 paid off in 31 months, making $48,000 to $53,000. Beans and rice, baby.

Count it down. Let's hear a debt-free scream. Three, two, one. I'm debt-free! Yeah! Yeah! Boom! I love it!

Well done. That's how you do it. Hey, you want to slip into a young lady's living room and talk to her dad about his blessing for you to marry her? You want to be that guy when you do that. This is the Dave Ramsey Show. Our scripture of the day, Romans 12.2. Do not conform to the pattern of this world, but be transformed by the renewing of your mind. Then you will be able to test and approve what God's will is, his good, pleasing, and perfect will.

Peyton Manning says, It's not wanting to win that makes you a winner. It's refusing to fail. Ooh, very good. Our question of the day comes from blinds.com. They have a 100% satisfaction guarantee that means even if you screw up, as the customer, if you mismeasure or you pick the wrong color, they'll still remake your window blinds for free.

That's a pretty good guarantee. It's a great company. Site-wide savings are happening right now. Take an additional 5% off if you use the magic word ramsey blinds.com slash ramsey tiffany's in california with our question she says i'm looking to start my own business but i want to make sure i still invest in retirement in my research i came across the roth solo 401k option can you tell me the pros and cons of this option sure sure it is exactly it's designed for exactly where you are and you can go that route i mean it's it's basically a roth ira for a self-employed person and um the other thing you can look at is the simple ira which is a 401k for

small businesses as well and once you get a little bit bigger and you've actually got a few employees and so forth, it's a very inexpensive way to kick off a 401k. But the Solo 401k is for the solopreneur, meaning the entrepreneur that has one person, and that's what it's set up for. And certainly the SmartVestor Pros can sit down with you in your area and explain to you every little detail and show you what the ins and outs are and help you get it lined up. Well, we're about halfway through the month. Thanksgiving is next week. Christmas will be here in about an eye blink.

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or sign up for a free account at everydollar.com. Every dollar. Now, you can get on there and you can go ahead and get the rest of the year planned, which is going to be over in just 20 seconds. It's time for you to take control of this subject. Money's either going to tell you what to do or you're going to tell it what to do. There is no middle ground. Joe is in San Antonio.

Hey, Joe, welcome to the Dave Ramsey Show. Hi, sir. How are you? Better than I deserve. What's up? Well, I had a bit of an odd question for you. First, I want to say thank you for everything that you've created because your products have done a lot to help my family. Cool. I'm honored. How can I help today?

Well, I have my GI Bill to use towards whatever I want in terms of school, and I just wanted a bit of advice. What do you think is a good program to go for, a good degree program, I guess, to go for? I would never pick a degree based on only what it pays because you'll be a miserable person doing something that pays well if it's not something that you have some passion about what do you want to do with your life what do you want to be doing

what do you see yourself doing 20 years from now uh to be honest with you i think uh i want to be an entrepreneur okay all right i really just i've wanted to work for myself for about five years now. Okay. So you got that bug. And then the next question starts to be doing what? But you can ask that question later. The easy answer is to get a degree in business, if that's the case, right? Yes. Get a good marketing degree or a finance degree or something like that. And that will put a lot of really good tools in your belt.

You know, I've got an undergraduate degree in business, in finance, specialization in real estate, many, many, many, many moons ago from the University of Tennessee. But I still use some of the things I learned in that degree track, you know, in that learning track. They're actual tools in my belt. I still use them every day. Accounting, understanding the basics, understanding of accounting and finance and statistical analysis when we're looking at a project and so forth. And so, you know, I think a business degree, if you're going to go into business, obviously, is unbelievably valuable because there's academic things that add to to your vision uh that

you don't have if you don't get that and so uh it's kind of a no-brainer the good news too is is if you decided later you wanted to do something else that you know a a good marketing degree or whatever something along those lines is uh it's very usable across a wide spectrum of things. And so it's a good general field of study, in other words. But my son-in-law has a degree in entrepreneurship. And the school he went to allowed him to get that. It's the same school, as a matter of fact, University of Tennessee, allowed him to get a degree with that.

So you can actually study entrepreneurship but again you're going to get the basics of business in that track i hope you know accounting statistics marketing business law you know a lot of those things that you're going to intersect with if you're running a business and starting a business so very cool thank you for serving the country, sir. We appreciate you. Dana is in Tucson. Hi, Dana. How are you?

Dave Ramsey. Hey, what's up? You're amazing. I just want to say thank you for this opportunity because I love how you handle money, how your brain works, and how you advise. Well, thank you. It's a privilege to be able to talk to you. So I'm 56. I sold my house

in Hawaii about a year ago, and I'm just sitting on the money. It's about $420, and I don't really know. I don't owe anything, and I'm not sure what I should be doing with the money right now. Okay. Are you single? I am single. Okay. What do you do for a living? Well, I had a business. I opened it up when I was 20, and then I branched out for a second business in Hawaii, which I closed, both of them. The last one I closed in 2015. So I'm just sort of semi-retired, not working right now.

Okay. Well, you've got a lot of earning potential at only 56 years old. The things you could do would be a lot of, you could have a lot of fun and make a lot of money in the next 15 years pretty easy. And, you know, you're an energetic person and you've run businesses before. So I'm going to be tempted to look at that idea again and say, goodness, what could I do and make some good money? The lessons you've learned, the bumps on your head that you got, scars that you got along the way, those are valuable. That experience teaches you some things not to do, and you know a lot of things to do already.

And so I want to see you plug into some kind of an earning process. I can't see you 56 years old just sitting on your butt for the rest of your life. You've got to do something, you know. And so, yeah, I'm going to head that direction, and then that's going to tell me what to do with the $420,000. Do I need some of it for an emergency fund? Yes. Do I need some of it to start my next venture?

Yes. Do I need some of it to buy my next venture? Yes. Do I need some of it to buy my next house? Probably the rest of it, right? And then we'll work on getting that house paid off, and let's try to build some serious nest egg for retirement purposes beyond this $420,000 in these coming 15 years, and, of course, getting a house paid off in the process as well. So, yeah, good stuff.

You're in a good place. You've got a lot of options because you've done a lot of things smart to this point. And then the trick is, what are we going to do now that you're there? The truth is this, folks, if you're in your 50s, between 50 and 60 years old, for most people, that is their highest income earning decade. Now, not everybody, but sometimes it's a second career, too. It's an encore career, we call it. But it's something about all the life comes together, and you know yourself by then, and boom, it takes off.

That puts this hour of the Dave Ramsey Show on the books. We'll be back with you before you know it. In the meantime, remember, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus. Hey, guys, this is James Childs, producer of The Dave Ramsey Show. I'm excited to announce that we're now carrying on 600 radio stations across the country. To find one near you, head to DaveRamney.com slash show.