The Ramsey Show - App - The History of the Debt-Free Scream (Hour 2)

Episode Date: October 30, 2019

Chris Hogan, Debt, Budgeting, Retirement, Savings Tools to get you started:  Debt Calculator: http://bit.ly/2QIoSPV Insurance Coverage Checkup: http://bit.ly/2BrqEuo Complete Guide to Budgeting: http://bit.ly/2QEyonc Interview Guide: http://bit.ly/2BuGnZE Check out other podcasts in the Ramsey Network: http://bit.ly/2JgzaQR     

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. Thanks for joining us. Open phones at 888-825-5225. That's 888-825-5225. That's 888-825-5225. Rachel is with us in Washington. Hi, Rachel.

Welcome to the Dave Ramsey Show. Hi, Dave. Pleasure to speak with you. You too. What's up? I really want to know what to do with my student loans. This is kind of my aha moment. I was comparing two bills, and the bill numbers are going up,

and I've been paying on them for what seems like forever. I am in the income-based plan and on the federal student loan forgiveness plan, which I'm not counting on. But I'm wondering if I should refinance them and be paying in the full amount on them now. While it's in my debt snowball. It's kind of the top one on my list, right? Or should I just keep them in the income-based plan, pay that minimum balance,

and then just keep it there while I'm on the debt snowball or refinance it when it gets to the debt snowball? You said the top of the debt snowball. You mean it's the largest debt or your smallest debt? Correct, the largest. Okay. And so how much other debt do you have? How much debt do you have total, not counting your house? Not counting my house.

I have about 1,800 on one credit card, 3,800 on another, 10,000 on a line of credit. I have a $17,000 car payment and about $30,000 in student loans. And what is your income? I make about $60,000 a year, and I'm a single mom. Okay. Pretty expensive car. Yeah.

First car payment. Okay. And you're just starting this whole thing? Yeah. I just started the budget app every dollar about in August. Good for you. How old are you? 31.

Good for you. Okay. Good. Good. Well, I'm proud of you. Good start. All right. Well, the income-based is always going to go backwards, almost always, depending on

your income. But usually, it creates a payment that does not even cover the interest. And so the extra interest is added to the balance. Okay? So the income-based does not ever get you out of debt unless you have a very high income, which you wouldn't be on income-based usually then. And as you know, you've already discovered in the short time listening to us that we're discovering the student loan forgiveness program is a fraud.

Yes. 30,000 people have applied for it. Ninety-three have gotten it. Yeah, in like three and a half years out of ten. Yeah, and so it's a pretty bad plan so anyway the um we've got to have another way to get rid of this debt now so we're going to work the debt snowball clear off all these other debts when you don't have any payments but the student loan then you're going to be able to attack the student loan with a vengeance and you'll clear it up in

less than two years at that point so you probably have about a three-year plan. Yeah, I had about five. No, you're going to work extra and you're going to sell some stuff. You may need to sell this car and get down into about a $5,000 car and that'll help you get rid of a big, hairy payment, number one. How much is your payment on that car um it's about 305 yeah that's a lot but i have it on a seven year seven year long yeah well you're not anymore because you're paying it off in three or you're going to get rid of it

i because what i'm looking at here is basically i've got about sixty thousand dollars worth of debt making sixty thousand so if we do 20 a year if we do 20 a year for three years that puts you out of debt that's what i'm looking at if you can't do that and you're you can't get you can't see your way of doing that in the budget then you do need to get rid of the car but i think that's probably pretty doable somewhere in there you're probably working some extra jobs or some overtime you're probably selling some other stuff you're definitely not seeing the inside of a restaurant unless you're working there and you're definitely not going on vacation you have a freaking mess you're cleaning up here and it's scary yeah i got rid of the vacation account good good it's scary looking at all this and And if you don't, so here's the thing. It doesn't matter what payment plan you're on with your student loan

if it's going to be gone in three years anyway. Okay. So, I mean, you could continue to pay the income base until you get to it on the debt snowball and then tear into it, right, when you're there because that's going to be your only debt left at that point. You're going to go bananas on that thing and just knock it out. And so, you know, how you pay your debt snowball or how you pay your student loan

or whether you pay your student loan doesn't really matter if you're on a three-year plan to get rid of it because you're going to be done with it that quickly anyway. And that's where you need to be. So we've got to get you tied into that. Let me do this. Let's put you into Financial Peace University, the nine-week class, and then Financial Peace, the one-year membership, which will give you the upgrade for your every dollar to every dollar plus, and it connects to your bank.

And you can go to the nine-week class, and you can get in the online communities that are really supportive, and you can watch the stuff we do streaming. There's all kinds of stuff in this membership. It is a very, very valuable thing, and I'm going to give it to you for free. I want to help you get turned around on this, kiddo. You can do this. Sarah is with us in New York. Hi, Sarah.

Welcome to the Dave Ramsey Show. Hi, Dave. How are you? Ramsey Show. Hi, Dave. How are you? Better than I deserve. What's up? Awesome. So my husband and I are debt-free, and we are in Baby Step 3B, and I was wondering how much money

is acceptable for us to spend on our vacation. It's up to you. You can decide. Okay. It's a pretty simple equation and the reason for your call is is the equation strains you and the equation is the more i spend on vacation the less i put in my house down payment fund yes and i feel guilty well that's a that's a positive adult kind of a thing not not a negative shame, but just this idea that, you know, how much, you know, you obviously want to go on some kind of a vacation.

So what's your household income? Our household income is $120,000. How much is in your house down payment fund so far? We just reached $30,000. Good for you. Well done. Thank you so uh what's your goal um our goal is to buy a 250 000 house and have somewhere between 15 to 15 percent to 20 percent down so so you want like 50 grand like Yes. And you have 30. Okay. Yes.

And what are you talking about spending on the vacation? So we had budgeted $4,000 to come to South Carolina for FPU Live, which is so exciting. So we budgeted $4,000 for that. That's including like restaurants for a week. So you're going to enjoy Charleston while while you're there yes very cool yeah yeah i would i would i would regardless of financial peace live i would do a four thousand dollar vacation in this scenario it's not throwing off your goal that much i would not do a fourteen14,000 vacation in that scenario. The ratios are what I'm looking at. Your income, the amount you have saved, and your goal. $4,000 doesn't throw you off your goal. $14,000

would. And that's where I'm getting my answer. So I think you do the vacation. I would entrust this great vacation to you, by the way. This is the Dave Ramsey Show. Folks, let's cut through the bull. Interest rates are exceptionally low, so you're missing out if you have not called Churchill Mortgage to see if you can save money on your home loan. Lots of other companies are out there claiming great deals, but don't get lured by slick advertisements. No-cost refinance offers do not mean they're free. Churchill Mortgage has a no-bull refinance. This means there are no hidden fees. They will shoot straight with you.

Yes, Churchill can offer loans with no closing costs, different down payment options, or, of course, a traditional refinance. The key difference is you can trust my friends at Churchill to let you know what you're getting up front so you can make the smartest choice and save the most money. Go to churchillmortgage.com. Do it today while rates are low. This is a paid advertisement. NMLS ID 1591. NMLS ConsumerAccess.org. Equal housing lender. 761 Old Hickory Boulevard, Brentwood, Tennessee 37027. Justin and Anna Paulina are with us from San Antonio, Texas.

I see on my screen you guys are debt-free. Congratulations. Yes, sir, we are. Thank you. Way to go. How much have you paid off? In the last 12 months, we've paid off $37,000. Very good.

And your range of income during that time? We've been making, total us together, $90,000. Very good. What do you guys do for a living? We work at a children's home it's arms of hope both of you yes sir very good if you're on campus so that's what really helped us is because we live here on campus and we don't pay rent so very nice so 90 000 plus free housing yes sir sweet and what kind of debt was the $37,000? It was my student loans.

I got my master's, so the total for my student loans. Okay. So how long have you guys been married? We've been married four and a half years. Yeah, a little over four and a half years. So what happened 12 months ago that set you on fire? Well, we got these incredible jobs, and we knew that it was a very unique situation. And so we said we didn't want to be in debt for the rest of our lives. And at some point, we got introduced to Financial Peace here through our work, actually.

They offered it, and we were just on board we didn't want to be paying student loans for the next 25 years so we said we're going to live off of one income and just put everything into as much as possible into student loans and we're just had a goal in mind and it happened what one year later you're done yes way to go congratulations i love it how's it feel to be free it feels good and what i said sometimes i think oh man we spent all that money and put it to the government but now we're getting to do the same thing and put it into savings and so it's pretty uh pretty cool that now that money's staying with us instead of just going somewhere else yeah now that you got control of it and you're not working for someone else you

didn't have another sally may living in your uh in your house there on campus yeah and we're expecting a baby in the next couple weeks so our first baby actually due on monday due dates on monday whoa look at you that's fun well congratulations you guys life is good i'm proud of you guys who were your biggest cheerleaders uh jesus um but definitely here at work our our cFO and just the team here really cheered us on, and even providing the program was super helpful for us. Yeah, employers providing that financial piece or providing smart dollar for their teams, it's spreading like wildfire. Lots and lots of them are doing the whole financial wellness movement is really starting to explode. We've been working on it for about a decade, but we're really seeing a lot of companies doing this now.

That's a wonderful thing they did with that, to offer that to you guys. You're seeing the fruit of it, Dave. Yeah, you guys are it. That's amazing. Well, congratulations. What do you tell people the key to getting out of debt is? The key, I guess, discipline. You have to want it. You have to want to be free of it.

Yeah. So you have to want it. Be disciplined and be willing to sacrifice nights out, going out to dinner and buying new furniture and just spending things, spending on things. Just be disciplined and have a goal in sight. Yeah. Well, a lot of your friends are doing those things, but they still got their student loan debt around their neck. Yeah. Yeah, they do.

See, after college, we had traveled some and worked part-time, and we're six months in Latin America, and so we didn't really have any means to pay the debt. And so once we accrued the means to pay it we just boom just went for it just like that was a big blessing very well done guys excellent job we got a copy of chris hogan's book we're going to send you everyday millionaires that is the next chapter in your story don't quit stay on task watch what you're doing and you'll be there before you know it very very proud of you you're making 90 and you'll be there before you know it. Very, very proud of you. You're making 90. And first babies on the way.

Life is good. Congratulations. Justin and Annapolina in San Antonio, Texas. $37,000 paid off in 12 months, making $90,000. Count it down. Let's hear a debt-free scream. We're debt-free scream we're dead thank you thank you we're proud of you well done you guys very very well done

so somewhere around 15 or 20 years ago a lady lady called in from Grand Rapids, and I picked up the phone, and I couldn't get in a word edgewise. She just machine-gunned me verbally. She's like, I did it, I did it, I did it, I paid off all the debt, I did it, I paid off all the debt. That guy was having a garage sale, and I sold a guy the bushes out in front of my house. I did it. I'm debt-free, I'm debt-free, I'm debt-free. And she hung up.

I'm like, what just happened? And we started people saying, that's the best call you've ever had. I'm like, I didn't say anything. Well, because it wasn't about me, obviously. It was about you celebrating a victory after unbelievable sacrifice to cause that victory to occur. You need a place to yell. You need a place to yell you need a place to dance you need a place to smile a moment in time where you stop and go i did this and so people started calling in after

she did that and said hey i want to do that i want to do my debt-free scream and i'm like i don't even know what a debt-free scream is but i think we just invented it but all it is is the end of a strenuous journey the celebration the war is over and there's victory and so we have a victory parade a ticker tape parade well it's there's always a victory dance at the end of any strenuous thing, and that's what this is. This is a milestone marker. It's the time that you say, I did it, because you have overcome the odds. You are no longer normal. You are no longer average.

You are no longer typical. And not only is this just a feeling you had inside but you have proven it with your actions justin and anna paulina got out of debt in 12 months they could have taken their new job with their new income and said oh we're just gonna be consumers instead they said we want our lives back. We want to straighten up this thing. We want to clean this up. They're heroes.

They're particularly heroes to that little baby that's going to come next week. And so we want the hero to have a chance to be honored. When you do this stuff and you win, you're a hero. When you save money and you invest and you get out of debt and I run into you or Chris Hogan runs into you and you say, hey, I'm an EDM. I'm an everyday millionaire. We're going to celebrate with you. We're going to high-five your success. We don't shame people for success around here. We don't think success is a bad thing. We think victory is an excellent thing.

We think people who decide to be victors instead of victims are heroes. And we give you a place to celebrate that. We give you a place to have that milestone and celebrate with 17 million people listening in we want to sell this is the ultimate freaking high five right here that's what it is when you score a touchdown you don't stand and look and wander off with your head hung down you do do the touchdown dance, baby. You scored. When you win the Super Bowl, you are excited. When you win the World Series, the Stanley Cup, you are excited because you have battled and against all odds have won.

And so we celebrate. And those of us that are your fans, we celebrate with you. And around here, we are fans of our fans. We're fans of you. We are fans of people like that young couple right there. I think they're stellar. I think they're studly. I think they're victors.

And I'm so proud that I live in a country where that generation is going to come up and be ruling things in a few years. People like them, they've earned the right. This is the Dave Ramsey Show. Business leaders, if you're not using LinkedIn Jobs, you are missing out. Our Ramsey Solutions Company page on LinkedIn has over 100,000 followers. That's over 100,000 potential like-minded people our team communicates our current openings to. We also post on LinkedIn Jobs because we know the right person will have an impact on our company for years to come and LinkedIn Jobs matches the right person with the right job. It's no wonder a hire is made every eight seconds on LinkedIn and over 600 million members visit LinkedIn to make connections, learn and grow

as professionals and discover new job opportunities. In fact, LinkedIn members add 15 new skills to their profiles and apply to 35 job posts every two seconds. Get started today with LinkedIn jobs and get $50 off your first job post. Visit linkedin.com slash Ramsey. Terms and conditions apply. number one best-selling author of the book everyday millionaires and the book retire inspired chris hogan ramsey personality joins me this half hour to answer your questions just returning from new york city having done a couple of shows up there you've been busy i have been busy dave but we've been helping a lot of people telling them how they can take control of their money yeah it's possible so you uh you

were on with maria yep did uh fox business with maria uh i did a serious xm with karen hunter i was on a couple of times with neil cavuto and did yahoo finance well yeah so a lot of hits about seven in all productive week very productive day or two yes it was very much so and now you're doing the ramsay show which is the culmination which i'm back in the financial mecca right here studio a right where it happens right studio a all right christian's in tennessee hey christ, welcome to the Dave Ramsey Show. Your question for Chris Hogan and me. Hey, Dave, Chris, how are you? Great, man.

How can we help? Okay. Well, I am 23 years old. I make $45,000 a year, excluding any bonuses. Bonuses vary. And my company does not have a retirement fund. So I'm looking at doing my own retirement. I'm wanting to invest.

A couple weeks ago, financial advisor, they were not a smart investor pro. Why would you do that? I told them what I wanted. I told them what I wanted, and they wouldn't give it to me. Okay. What did you tell them you wanted? I have now. Say what?

What did you tell them you wanted? From listening to all your rants, I told them I wanted to invest in good growth stock mutual fund, 25% across the four that you wanted, that you advised. And, you know, I'm 23. I think I have a long time to do so. And I think that would be one of the best investment decisions for my retirement, maybe. But maybe you would say otherwise. No, I'm pretty predictable.

That's what I've been saying for 30 years. So why would they not sell you mutual funds? When I told them what I wanted to be in, they basically laid down a folder and said, well, this is what we'll set you up in, and it was not a 25% in each across the growth, aggressive growth, growth in income and such. They had a different plan, and they wouldn't do what I liked. I actually set up an appointment with a smart investor pro

who I'm actually supposed to meet with this afternoon. So it was a great day for me to get through. Christian's going to be rich, Hogan. Christian, I am proud of you. Because, see, the bottom line is somebody got confused. They were confused about whose money this was. You had a plan, you've got dreams, and you had somebody that flat out told you no. That's like going through a drive-thru to get some food and they tell you you can't have that. So what do you do?

You move on, my friend. I'm proud of you. And you sit down with somebody and you walk through your dreams and get someone aligned with you. Dave, that's why we talk about the SmartVestor Pros. They would never do that. Well, that's why we talk about the smart investor pros they would never do that well that's why we talk about having the heart of a teacher because christian obviously at 23 young years has already figured out that way to go christian i'm proud of you too man you've already figured out that you're in charge of your life not some other goob and uh when you put your life in the hands of some goob that's when you don't have a life and so so, man, you just killed it, man. You slayed that. That was a manly decision, a grown-up adulting decision.

Well done. It really is. Christian, tell me this. At 23 years old, where did you learn about money? I mean, I've turned into Dave Ramsey a little bit. I mean, I just have a lot of self-drive. You know, I don't want to get stuck in a rut i want to i want to be able to provide and possibly retire early and enjoy life yeah so you're out of debt right um i have a small debt um that is reduced down to about 12 grand that

will be paid off um it it was an investment on a boat that is actually used as a source of income i know a lot of people oh boat boat boat oh no oh no it's actually going to be used as a source of income that will probably be paid up probably be paid off in a couple lump sums that will come within the next two three months months. Okay, so you're out of debt. You build your emergency fund. Then you're at baby step four, and you start putting 15% of $45,000, which is basically going to be a fully funded Roth at about $6,000, give or take. Your fully funded Roth will get you pretty close to where you need to be

and sit down with your SmartVestor Pro and pick out four mutual funds, one growth, one growth in income, one aggressive growth, and one international. You understand it. You do it because you understand it, and it's what you want to do. The smart investor pro should have the heart of a teacher, not the heart of an arrogant boss, and would show, you know, you're going to do it my way or you're not going to get to do it, and then you're going to be just fine, man.

Hey, the thing there is not what he's doing it's that he understood who's in charge that changes everything it really does dave and at 23 for him to have that kind of wherewithal that's a big deal hey hold on christian we're gonna give you a copy of hogan's book everyday millionaires because i think i'm talking to one all right william is with us in colorado hey william what's up hey guys it's uh definitely an honor to speak with both of you um i have a i pretty well been on the dave ramsey plan since i started making my 40 years old um parents kind of turned me on to it as little twins back in my early 20s and I'm sitting in a spot where I've got a net worth of about two million and I recently just sold an investment property to pay off my primary mortgage kind of did that out of order but I want to have about

$335,000 in cash and I my heart wants to go buy a condo up here in colorado in the mountains to just use and enjoy but i'm trying to understand if that's going to penalize me long term it's a question it's a small it's a small percentage of your net worth and you're paying cash for it okay can you afford hey listen you have two million dollars can you afford a 350 thousand dollar toy that's exactly what it is that's exactly what it is it's useless i mean it'll go up in value but we're not going to justify it on that we're going to buy it because you can and because you've worked your butt off to be here you've lived like no one else and later you live like no one else you know why i drive the cars i drive because

i want to drive them not because i care what you think that's fair i drove like no one else now i drive by god drive like no one else you know well and that's kind of the i've had lots of conversations with people i try to counsel on their ways about deferred gratification and i think this might be a good example of that so it is you're there because of it and it's a small percentage now if you told me you're going to buy a million-dollar toy out of two million, now your ratios are starting to get off, right? Right. I mean, my primary house is $430,000, which for Colorado actually isn't that bad. No. And it's actually, I mean, that's what I have in it. It's below market.

It's worth probably about $620,000. Yeah, William, here's the thing, my friend. You have earned the right to be able to go do this, and I want you to go do it and not have guilt, okay? You might have friends and other people that try to chime in with an opinion. It's not about them, right? They didn't do the work. They don't have a $2

million net worth like you do. Go get your condo and enjoy it, my friend, right? Take friends there. Yeah, have couples that go to your church that maybe can't afford a vacation let them go stay there for free use this thing for good yeah you have that right yeah you've you've you've earned the right and it's a small percentage of your world and so i mean that's the thing it's a ratio issue you're always looking at and when you're dealing with wealth the only way you can

keep your perspective is keep your ratios going, is to look at ratios. Because some of the stuff you're able to do if you have $200 million is weird. It's just weird because not many people have $200 million. Right, right. And so it's like, should you do that? It's like, I don't know. And the only way to look at it is look at it through the lens of ratios and go, what's 1% of my net worth? See, when I've heard you do that, and it was years ago, it put it in perspective for people.

You give yourself permission to enjoy. To a degree. Yes. To a reasonable degree. Right. And you're not being consumption-oriented. No. He's probably giving a lot more than he's spending on himself.

Yeah. Most of these $2 million millionaire, everyday millionaires do. Chris Hogan joins me this half hour answering your questions. He is author of the number one bestselling book, Everyday Millionaires, How Ordinary People Built Extraordinary Wealth and How You Can Too. This is the Dave Ramsey Show. number one best-selling author ramsey personality chris hogan joins me this half hour answering your questions he will be the primary leader teacher i will be the secondary i'll do a couple of lessons uh next week for a sold out entree leadership Series. About 650 people coming in for the week on that.

Completely sold out. Thank you, America. I'll be doing a one-day event following that on family business. Looking forward to teaching some new stuff there. That's going to be fun. The Smart Conference is coming up on November the 16th, just about a week later, in Sacramento. There's about 900 and some change tickets left to that. That's going to be about 10,000 folks.

And it's going to be our largest smart conference ever with Hogan and me and Ken Coleman and, of course, Dr. Meg Meeker, Anthony O'Neill, Dr. Les Parrott. We're talking about marriage. We're talking about money. We're talking about millionaires. We're talking about teenagers. John O'Leary will tell you one of the most inspiring stories you've ever heard. George Camel

of the Borrowed Future podcast fame will be our emcee. He didn't used to be a famous emcee. No, he's famous now. He's a really big deal. Don't believe me, just ask him. I'm really looking forward.

Patsy Claremont doing her talk on fear is lights out. It's going to be a great day. It really is. Listen, if you're out there and you've not attended one of our events lately, you need to come check it out. The Smart Conference is an amazing day. Jam-packed with all types of information going from retirement talking about marriage talking about goal setting it's a phenomenal day people ask me all the time well hogan what age range is this event listen from 17 to 106 you can learn something to come

out and have a blast and oftentimes dave we get families there in mass yeah if you're 107 though yeah you might want to stay home. No, you can come. Come on. You come on out, too. The next week, we will be in Charleston, South Carolina, to finish out this season. Chris and I will be doing Financial Peace Live in Charleston at Seacoast Church there. It is going to be streamed, and so you can watch it from wherever you are. If you want to come down and make a vacation time out of the wonderful city of Charleston, you can do that.

There's about 100 tickets left is all. It's almost gone. That one's going to be gone in a day or two here. You're not going to be able to make it. The Live Like No One Else cruise, of course, is sold out. Entree Leadership Master Series is sold out. Lots of other stuff. But that's Hogan.

We're going to be working a bunch together soon. I've got to get a life vest big enough for me for this cruise. Is that a special order? It's going to have to be. It needs to be double-walled. Double-walled? I need it. Because you're worried about sinking.

I need to stay afloat. I also love how you just browsed past this family business thing you're going to be doing on Friday, which is amazing. What are you covering at this? We're going to be – we've been doing research on family business for about 10 years, and this is the first time we've really done a day-long event teaching what we've learned and what we've learned actually applying this stuff here inside the business with our family in this business. And we've studied families that have done it well, and there's lots of families that haven't done it well. And there's some common – as there is with everything, there's some common mistakes.

And we did finally discover the basic principles of, you know, here's the five things you need to do in the three different stages of business that you need to do them. And we're going to walk you through those things. And first time I've taught the material all the way through. So it's kind of been collecting in my brain and accumulating with our content team and our research team. And so we've been combing through it for about six months getting ready for this. It's fun to build out all new curriculum. Oh, it's going to be exciting.

So again, if you're out there and you've not plugged in with us, go to DaveRamsey.com. You can learn about the money events. You can learn about all the different things, the leadership stuff at EntreeLeadership.com. It's a wealth of tools. Go check it out. Shannon is with us in Kansas. Hey, Shannon, your question for Chris Hogan and me. Yes, I was recently sued for about $300,000.

I do have a traditional IRA, and I was just wondering if it would be smart to cash that in and pay off the lawsuit and then start rebuilding it. It is my only debt. So you were not only sued, you lost. Well, we split it half. You settled it. He sued me for a lot more. You settled it. Yeah, we settled.

So you have a current debt to this person of 300 grand? Yes. Woo! Ouch! Okay. How much is in your IRA? About 750. Okay.

And you're how old? Almost 50. Okay. So this is going to cost you 10% old? Almost 50. Okay. So this is going to cost you 10% plus your tax rate. What's your household income? Well, we're in real estate, so it varies. I know, but what is your taxable income in the coming year approximately? About $250,000.

Okay. So you're in a 40 tax bracket so 38 so you're gonna lose that plus 10 you're gonna lose 48 of this money that you pull out to the government before you get the money so you're gonna clean the whole 750 out to pay the 300 almost. Okay, so not a smart move. Not if you've got any place else you can get it. What else do you have? Well, we are debt-free.

I'm not taking out a loan to pay this off. I agree with that. Do you own a rental property that's paid for um 51 of them 51 of them okay uh let's sell uh let's sell enough of one of those or a couple of those and pay it with that it's going to cost you a whole lot less okay i brought i'm with you i like real estate too uh but that you don't have you're not going to get hit in the jaw for 40 when you cash out a rental property or two to pay this deal off okay how fresh is the settlement um it has to be paid by september of next year okay all right that's perfect to build put a piece of property or two on the market get it sold right correct out of the 51 there's a couple of them you don't like that much anyway um about three that'll add up to mysteriously 300 grand

exactly yeah i would do that because your worst case is you have low capital gains on one or two of those based on your adjusted basis you know how to do that formula and you know it's all gonna it's still gonna be a bazillion dollars less than 48 percent which is what you're facing the other way yeah that's that's rough ouch you know it is and one of the things you could see her trying to process but as you laid that out and helped her to understand you're going to surrender 48 of it and so that math becomes easy now uh and yeah like you said dave you list those properties those three uh get this thing paid out of your life and then guess what you're a real estate agent you'll have a cap on your income so you get out there you're making 200 get it back up to 300 000 a year and buy your

properties back with cash yeah yeah well she's probably got a bunch of them yes yes i'm guessing so yeah 300 000 sounds really bad to hear 51 properties and 750 000 in the 401k so i think it can probably limp through this but still bad yes no no day you write that check is a good day but uh ouch tom is next tom's in wisconsin your question for chris and i tom yes thank you good afternoon thank you for taking my call sure what's up i just have a quick question here um i'm looking to retire from teaching in the next two years. The absolute only debt I have is $100,000 on my home. It's $4.125. Okay.

Payment's only $511 a month. Do I, if I'm going to teach two more years, do I invest in a Roth? How do I make my money work for me in the next two and a half years? Okay, Tom, what's your net worth right now, my friend? Net worth. As far as what I have, I've been doing doing the steps i have seven in the bank right now thousands just sitting there okay um making really no interest right i'm wondering how much do you have in your 403b um i i'm under the wisconsin retirement system okay so i don't have and then

i have a tsa with about eighteen1,800 in it. Okay. So I have no other debt, no college debt, no credit card debt, no home debt. I mean, no, no toys debt or anything like that. Well, I love the idea of you getting serious, Tom, and attacking that house and getting it out of your life. I want you to take a lot of things into retirement with you, but debt isn't one of them. So let's buckle down, delete that mortgage and move forward and chase down your dreams. Good plan. Yes. Chris Hogan, thank you for hanging out. Thank you for having me, Dave. Check out his number one bestselling book, Everyday Millionaires, and you can be one. James Childs is our producer, and Madison

is our associate producer and phone screener. I'm Dave Ramsey, your host, and we Dave your story.