The Ramsey Show - App - There's No Winning Without Paying a Price (Hour 2)

Episode Date: November 29, 2019

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Live from the headquarters of Ramsey Solutions, broadcasting from the Dollar Car Rental Studios, it's the Dave Ramsey Show, where debt is dumb, cash is king, and the paid-off home mortgage has taken the place of the BMW as the status symbol of choice. I'm Dave Ramsey, your host. 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.

Chris is with us in Wichita, Kansas, starting off this hour. Hi, Chris. How are you? Hi, Dave. Thanks for taking my call. Sure. How can I help? My question is, in saving for a comfortable retirement, do you have a certain formula you should use as to how much you can withdraw out of your retirement savings as a percentage-wise to never run out of money? And, you know, what is your formula for setting up a comfortable retirement. Well, you need to be able to live on less than 8% of your nest egg if your nest egg is making 12.

Okay? Now, I don't know what your nest egg will be invested in or what you're doing. Mine is invested in real estate and in good growth stock mutual funds. So the vast majority of my net worth makes me in excess of 12% a year. So in my case, I'm making 12% a year. Now, probably more like 14. Basically, everything's invested in 10 different mutual funds. And I had heard the formula was 3.5%.

You could withdraw 3.5%. Here's the thing, okay? If you're making 12 and you pull off 8, you left 4 in there, didn't you? Right. Okay? You're never going to touch the nest egg in that case on average. Some years you might dip into it. You might have a negative year.

Other years you might have a negative year other years you might have a positive year but on average over 20 years if you make 12 and pull off eight your nest egg is not only not going to get destroyed it's going to grow by four percent a year agreed yep that sounds good if that's true now i mean what you've got to do is manage it hands-on and watch what you're doing so that you don't consistently withdraw more than it is growing as long as you't consistently withdraw more than it is growing as long as you don't withdraw more than it is growing but the three and a half percent is completely bogus unless you're so stupid that you've got your money invested in uh you know two percent cds or something which would be ridiculous right okay right but as long as you're making more than

you're taking out, you're okay. And the formula I came up with is very primitive. There's no rocket science to this, really. Because inflation has run for the last 75 years about 4.2% average. And so if I let my money grow by 4% a year, I get a cost of living raise every year. And so that's where I say, whatever it's making, I pull off four less than that. Okay. And it'll always grow at a rate of inflation, because if your nest egg is 4% bigger next year, it'll produce 4% more money, correct?

Okay. And so you're staying with inflation, and that's the whole idea. And you can play with that. I mean, you can run that more conservative. You can run it more aggressive. You can do whatever. The truth is, it depends on the size of your nest egg as to how vital this becomes. If the size of your nest egg is $500,000, you've got to be very careful.

If the size of your nest egg is $15 million, you've got a lot of wiggle room in this. Oh, sure. Yeah. So it just depends on where you land in that, too. But if you're trying to retire on $500,000 and that $40,000 a year is 8%, you've got to manage that puppy down to the nub. You've got to watch what you're doing exactly there. The big thing is don't pull off more than it's growing,

whatever you've got it invested in. And I like to pull off 4% less than it's growing. And that keeps me breaking even with inflation. If you pulled off 5% less or 8% less, I don't care. Live on 4%. You can live on 3.5% if you want to, if it's making 12%. But the thing's going to continue to grow pretty aggressively. And again, you might not need all of that.

So you might just let it ride. Like, I don't need mine. I'm working now. So my net worth is continuing to grow by the entire amount because I'm not touching it. I'm earning an income still. I'm not living off the investments. So they're all just snowballing in the right direction. So there's so much to where youing in the right direction so that that

you know that this there's so much to where you are in particular as to how that works but the big deal is don't pull off build a nest egg big enough that you that you can live off of what it earns plus or minus four percent you know that's the thing all right jeanette is with us in st petersburg florida hi Jeanette, how are you? I'm good, and you? Better than I deserve. What's up? I have a question.

I have alimony that is ending in two more years, at the end of 2021, I believe. And I have been actually using my alimony to pay my expenses. So I needed advice on that. I don't owe anything on charge cards anymore. Good. It's all off. So how much, what's your income, not counting alimony? My income as a public school teacher is $42,000. Okay.

Can you not live on that? On $42,000, I bought a house. I have a mortgage, of course, and I have a rented car. I'm sorry, not a rented car, a leased car. And I don't want to be upside down, so I am concerned about what to do. Okay. So when I asked you the question about whether you could live on $42,000, what you answered me with was all your debts.

And so it sounds like you need to clean up your debt, right? Yes, yes. How old are you? I'm 53. Perfect. 53. Okay. And how much do you, what's this car worth? The car is worth $25,000, and I owe $26,000. You need to sell this car.

Well, it's a lease. I don't care. You need to sell the car. Okay. Okay. You have a car you can't afford. You can't afford to drive a $25,000 car when you make $42,000 a year. The math on that doesn't work.

It doesn't pass the fourth grade math smell test. All right. So it's in the insane column. You've got to get a car that's $5,000 or $6,000 or $7,000, and you pay cash for it when you make $42,000 a year. And that's, you know, until you get your income up, you can't afford to drive a car that's that expensive, even if it was paid for. And how much is your house payment?

$1,100 and change. And what's your take-home pay from teaching? $1,800 every two weeks. Okay, so $3,600. So one-third of your take-home pay is your house payment. That's a little rich. It's not enough to force you to sell it, Okay, so $3,600. So one-third of your take-home pay is your house payment. That's a little rich. It's not enough to force you to sell it, but it's enough to say I need to do some things to get my income up other than alimony.

You've been riding this alimony as a crutch, and you looked up and saw it's going to end, and it scared you, and it's going to scare you straight, which is good. So you chop up the credit cards. Let's get the car sold. Let's get out of debt. Because if you don't have any payments but a house payment, you can make it on your teacher's salary, and you can prosper on your teacher's salary, and you can work towards getting your income up.

Hold on, I'm going to send you a copy of the book, The Total Money Makeover. You desperately need to read every page of that and do exactly what it says. This is the Dave Ramsey Show. No matter what time of year it is, focusing on your family's financial plan is always a smart move. I get questions all the time about where to start and what to do first. One of the most crucial and affordable first steps to take is to protect your family and get term life insurance. I know it's not glamorous, but all the other steps mean a lot less if something happens to you and your family has no financial protection. Getting term life insurance needs to be a top priority. I recommend 10 to 12 times your income and lock in rates for 15 to 20 years.

This gives you plenty of time to get out of debt and build wealth, and I've been recommending Zander Insurance for over 20 years. They understand and live this strategy, and they will take the time to help you find the most affordable term life rates. Go to Zander.com or call 800-356-4282. It's not that expensive, it's not complicated, and you need to do it right now. That's 800-356-4282. Thank you for joining us, America. We're glad you are here.

Open phones at 888-825-5225. Bill's in Richmond, Virginia. Hi, Bill. How are you? Richmond, Virginia. Hi, Bill. How are you? Hi, Dave. Hey, what's up? My wife and I, we're in baby step number two. Okay.

We owe $97,000 on a line of credit. Mm-hmm. And we've just had one of those hiccups in life where my car is now in need of a transmission. Mm-hmm. It's a 10-year-old carold car is probably worth $2,000. It's going to cost more to put a transmission in than it's worth. So right now, my question is, I've looked at other cars.

I saw one that I liked last night. It's about $5,500. Agreed on a price. Should I borrow all my line of credit to get that car because I'm going to need to go back and forth to work? Yeah. That's my question for you. So you have $1,000 saved?

Yes. And what's your household income? Anywhere from about $165,000 to $190,000. Oh, wow. Great income. Okay. And you have two cars or one? Two cars.

Mm-hmm. Okay. Well, this one's now got a transmission problem. Right, right. I got that. Okay. But your wife has a car, right? Yes.

Okay. And does she work outside the home? Yes. Okay. And, I mean, here's the thing. Certainly, the world is not going to come to an end and stop spinning on its axis if you go borrow five grand and make $165,000 on your way out of debt, right? But there's something that happens in the psychology and the emotions of what we're trying to do that's that that that's

kind of falling off the wagon and so i if i'm in your shoes i'm gonna force some unbelievable discomfort for a very short period of time to make the point to myself that I'm done with that. And so it's what Sharon and I have done many, many times in our lives. In other words, what we said is we don't borrow money. Now, how do we solve this problem? You see what I'm saying? And if you draw that line in the sand and you chisel that in stone, then how do we solve this problem? Well, you make really, really good money.

And so you could have, if you stop everything, you could have $2,000, $3,000 next month, right? Yes. And, yeah, so I mean, so I don't know, you pair up in one car for a month, you rent a car from, you know, from dollar for a month. I don't know. Which would be, I don't know, 300 bucks or something, right? You got that. But if you just said, I don't have the option of borrowing money because I don't borrow money, then how would I solve this problem? How would I skin this cat, right?

And that's what's been so freeing to Sharon and I for so many years because we've run into stuff like you're running into over the years. There's a lot of stuff we wanted to do and couldn't do right then or it was really uncomfortable or whatever, especially in the early days of doing this stuff, which is what you're in. So you can certainly do whatever you want to do. I'm going to advise you to take some kind of an uncomfortable, inconvenient methodology that caught because I don't see anything convenient or comfortable that's going to allow you to

have a car tomorrow. And so, you know, the two things that come to mind is a pair up in one car or rent a car for a month or if you gotta you know is your your grandmother got a car that's sitting in her driveway 90 of the time you borrow it for uh for three weeks i mean with the kind of money you guys make in one or two checks you could have three or four thousand dollars if you stop everything so stop your your debt snowball, stop everything, and we're going to go solve this emergency problem we've got. Oh, by the way, your car sells without a transmission in it for $500 or $600.

You're going to get some kind of money out of it salvaged, and that goes in the territory. It's certainly an emergency. You can use the $1,000 that's laying there. And then we start again, and, you know step one's a thousand dollars saved and then we start back on the debt snowball that's what i gotta advise you to do because something's gonna happen inside of your all's relationship inside of your behavior and because you said we don't do this anymore and that's what i'm going to advise you to do.

And that's my reasoning. Because, folks, everybody out there listening, here's the thing. We solve so many of our problems that we have with debt that it just becomes normal. And everybody's in debt. Consequently, everybody's broke. So we somehow have to, there has to be something that snaps down inside of you. Now, Sharon and I didn't have a choice. We went broke.

You guys listening, you got a choice. I mean, Bill's got a choice. He can go either way. And nobody's going to call you stupid or crazy or whatever. But, you know, you could go either way. You can go get the $5,500 and then just turn around and pay it right back off. You'll be okay to do that. It's not the end of the world.

But there's something to be, there's something that you acquire in your character, that you acquire in your spirit when you say, I don't do that anymore. I don't do that anymore. And there's not a circumstance under which I do it. And we figure it out. And, you know, that's what you're facing. And I've had lots of stuff I didn't do over the last 30 years since I quit borrowing money because I didn't have the money.

Lots of stuff. There's always something. Hey, that's my opinion. So it's just fun to think about because it's a spiritual philosophical discussion more really than it's a math discussion for you, Bill. Good call, man. And I appreciate your spirit on this. Mary is with us. Mary's in Dayton, Ohio. Hi, Mary. How are you? Hi, I'm good. How are you? Better than I deserve. What's up? You talked to a woman about

you asked her if you would take out a mortgage to invest in the market, and that got me thinking, and I kind of have the same situation. I'm wondering if I should pay off my mortgage and take it out of my brokerage account, but that would only leave me $56,000 left in the brokerage account. And how much money do you have other than your brokerage account, but that would only leave me $56,000 left in the brokerage account. And how much money do you have other than your brokerage account? I have two annuities and Social Security that I'm living off of. And how much is in the two annuities? The Transamerica is $142,000 and Prudential is $94,000.

And the brokerage account has, well, yes, $136,000 and Prudential is $94,000 and the brokerage account has $136,000. I lost like $20,000 due to the market. So that's why I'm getting scared. How old are you? 63. And you're completely retired? Yes. Well, I've never worked. I live life totally opposite from what you teach so now it's like i'm trying to get it together and uh i hope i'm not too old no you're not too old we can always learn something can't we so i mean that's how i got

this money okay this is is my husband's. He passed away from leukemia, so the annuities are his 401K and his pension and his Social Security, the widow's benefit. So the Social Security and the money coming from the annuities, can you live on that? I'm squeaking by. If you didn't have a house payment, you could live on it easier, right? Oh, easy. Yeah.

That's, yeah. I'd pay off your house today. Even though it only leaves me with $56,000? No, it leaves you with $300,000, counting all the annuities. Oh. You know? You're not broke. You're not broke. I see what youuities. Oh. You know? You're not broke. You're not broke.

I see what you're saying. Okay. Yeah, and just this one brokerage account is down lower, but so what? And that brokerage account sounds like it's invested pretty aggressively, which you may want to sit down with someone and understand a little bit better what you're invested in there. I don't know that you ought to be playing single stocks. I know you shouldn't in your situation,

and it sounds like that's what they're doing with this. So you may want to sit down with one of our SmartVestor pros and just talk about investing that money a little more conservatively than the way it is now. I don't know how it's invested, but you just have to look at it and learn and think about that. But I'd pay off your house today, and then make sure you're on a budget, kiddo,

and that you're living on the money that you've got coming in. But without a house payment, I think that budget will start to work again. But you can't be spending more than you make. You're not in Congress, so you've got to behave. This is The Dave Ramsey Show. Thank you. We'll be right back. In the lobby of Ramsey Solutions, Colby and Lindsey are with us. Hey, guys, how are you? Hey, Dave. Good, how are you?

Welcome, welcome. Where do you guys live? We live in Sherman, Texas. Sherman, Texas. Well, welcome to Nashville. And all the way here to do your debt-free scream. Yes, sir. Well, congratulations. How much have you guys paid off?

We paid off $77,000 in 34 months. All right. Good for you. And what kind of range of income were you doing at that time? We were about $65,000 and then we're coming up on $100 on 100 at the end of this year. Good for you. What do you guys do for a living? I'm a firefighter paramedic in Plano, Texas.

Fun. And I'm currently a stay-at-home wife. Love it. Good for you. Fun stuff. What kind of debt was the $77,000? It was a little bit of everything. We got really lucky.

We didn't have any credit card debt. It was student loans, both of our cars, quite a bit of medical bills on my part. But we were able to knock that out. And as well as the $77,000, we cash flowed $13,000 for our wedding during that time. Oh, got married in the middle of that. We did. There wasn't an option to stop paying off debt while we saved up for the wedding. We didn't even have any discussion. It was, we're going to keep paying off debt while we saved up for the wedding. It was, we didn't even have any discussion. It was, we're going to keep paying on debt. We're going to save it for the wedding.

And then when we were done, we got to hit it real hard and pay the rest off. Love it. So how long have you been married? Two and a half years. All right. So of the almost three years, two and a half of it. So you started six months before the wedding. Yes.

Boom, get married and game on. Yeah. Well, when he proposed, it was, hey, we need to do this. Let's take FPU. Yeah. Let's get married. Let's take FPU. You're a real romantic, dude.

Yeah, I know. I actually said that when I was still on my knee. I was like, hey, by the way. Here's a copy of FPU. You're going to get out of debt. Yeah. Oh, my gosh. So who had the most debt, you or her?

Probably me. Yeah. With student loans. With the car and student loans yeah okay i had some but it was paid off before um before we even met actually so so colby what got you so fired up about this that it's part of your whole story now um my my parents did fpu uh when i was uh maybe a freshman in high school in middle school oh Oh, you're a financial peace baby. I am. So I saw a little bit of that growing up. And I don't like paying a whole bunch of my income towards interest,

going to nothing. Oh, you're just naturally tight. Yeah, a little bit. Yes, 100% yes. I love it. Good for you. That was big. And during our whole relationship, I just noticed we handled money differently.

And so knowing that money fights and problems is the number one cause of divorce, I was like, that's something that we can take care of. And that's something that we should start from the beginning. So you went through the Financial Peace University class? Yeah. That was our premarital. Pre-marriage counseling. Yes, sir. Good for you. Good for you. So now that you've Financial Peace University class? Yeah, that was our premarital. That was pre-marriage counseling, wasn't it? Yes, sir.

Good for you. Good for you. So now that you've done it, you're debt-free. It was one of the first things you did in your marriage. Yes. Pay off $77,000 worth of debt.

That's so impressive. Thank you. So proud of y'all. Well done. Now that you've done it, tell people what the key to getting out of debt is. I would say not giving up.

I'm 26 and he's 28, and so for the past couple years, paying off debt was more, a lot of people our age think it's just this trudge of we can't ever see our friends and we have to give up literally everything. And in some aspects, that's true. You have to sacrifice. But if you want a good reward in the end, then of course you're going to have to sacrifice. There's no winning without paying a price. So we knew that going in. It was difficult, especially since he's a social butterfly and I'm not, um, his friends would text

him asking to go out for a party or a birthday party or this or that. And we had to say no a lot. Um, so that was, that was a really good eye opener that, you know, it's a short term, we can do this 34 months. We did it. Um, and now, I i mean we just got back a month ago from mexico we spent a week there boom paid for it no problem it was our first vacation yeah look at you we got to do really fun stuff and we're not even 30 so it's it's don't give up and i know it's hard especially when you're young and you want to do all fun stuff that all your friends are doing um but you had a you had a greater purpose i mean it's live like one else, so later you can live and give like no one else. That puts you in a position to do that.

For the nerds out there, I was, like you said, I'm naturally tight budgeted. If it were up to me, we wouldn't have bought anything that wasn't a necessity during that whole time. And if I were to do that, she would hate the plan and wouldn't want to do it, and we wouldn't be where we are now. Give and take. I would say, okay, yeah, we need socks. He's not joking. We need socks.

We would put more money in certain categories because she said, hey, we need this stuff. And by me doing that and agreeing with it, it allowed her to enjoy this plan. Well, what's interesting is as a brand-new married couple, I mean, you've now combined your value systems. Yes.

Instead of having two separate lives, which a lot of people do most of their lives. Right. Instead, now you are what the preacher says, and now you are one. Right. Right? Yeah. Because you work through the give and take, and now you've got, okay, Right? Yeah. And because you work through the give and take. And now you got, okay, I get that. I get that.

And there's this respect for each other's position, but also we both respect the goal. Yes. And we went for the goal. Yes. Learning communication was huge, too. Yeah. Because, I mean, of course, everybody has their little nitpicky fights in marriage. What was your biggest budget fight during the 34 months? Oh. What was your biggest budget fight during the 34 months? I wouldn't say it was a fight, but a big disagreement or something that took a while.

When we had paid off almost everything, we had her car left. Yeah. And I had a nice F-150 truck. It was my first love. I had that a month before we met. But I was looking at, you know, cars that she could drive if we were to sell hers, because we were upside down. And I had a brand new car as well.

Yeah. And so looking at that, I was, I was asking her to sell it. She's like, no, I'm not, I don't want to sell that car.

That's, you know, we get in a worse car and car repairs and all this other stuff will happen. And I thought, well, how can I ask her to sell this car that she loves? I'm driving an F-150 that I love. I was like, okay.

I sold that and I bought a 2000 Ranger. I actually named it Ramsey. The no-loan Ranger. the no loan ranger yeah so um we got that and um then she was like okay if you're gonna do that i'll sell mine and so we oh we we bought two cars uh with with that sale my truck and then we're able that's when your friends thought you'd lost your mind yeah yes because he he had this really awesome truck and came in with this, something that looked like my grandpa would be driving. And so it was really hard because I thought my thinking, I think a lot of people too going through the plan, is you have a really nice car. Why would you sell it?

You can keep it. You can put miles on it. You can, you know, it's good value. It'll hold its value. It'll resell good, all that stuff. But that's not what it's about. I bought a 2013 Nissan that had 50,000 but that's not what it's about um i bought a 2013 nissan that had 50 000 miles on it and it's amazing and now you guys make a hundred thousand dollars a year

you're at home and you get you don't have any payments you can save up and buy whatever you want to drive right yeah that's right so right now we um a big reason of why we wanted to do all of this was obviously for stronger marriage him being being in the fire service is already a big stinker, if you will, in marriage and all of that that could go wrong. So we wanted to make sure that that was strong and stable. But also just to do my, I have four siblings. So with my family, it was, you know, my parents worked really hard, but sometimes, you know, they could have made more that kind of thing so for us it was not not having to worry about that at all yeah um one less thing to worry about right and also saving up so we a lot of people talk about

saving or waiting until they're done with all the steps to um to have a kid if they don't have any yet and some people would do when they're going through it's you know up to you that's between you and god um but for us with what we have experienced and with family members and friends we wanted to make sure we were in a good position for when we did decide to have a kid um that it wasn't oh crap we have to start saving now it was just pure joy of getting save and we actually are 15 weeks pregnant now so yeah awesome so we as soon as we were done um paying off the debt we wanted to go ahead and get into this next part of our lives so wow the big announcement look at you that's so great i'm so proud for y'all she can stay at home and we won't have to worry about how much it costs. Count it down. Let's hear your

debt-free scream. Ready? Yeah. Three, two, one. We're debt-free! Woo! Yeah, baby! That's how it's done

right there. I love it, you guys. I love it, I love it, I love it. This is the Dave Ramsey show Jacqueline is with us in Idaho Falls, Idaho. Hi, Jacqueline. Welcome to the Dave Ramsey Show. Hi, Dave. How are you doing? Better than I deserve. What's up?

So I have three kids, seven, five, and one. And as the holidays approach, they tend to get money from family members. You need to speak directly into your phone. We're having trouble hearing you. Okay. Is this better? Yes, ma're having trouble hearing you. Okay. Is this better? Yes, ma'am. Thank you. Okay. Perfect.

I have three kids, five, seven, and one. And they get gifts from family members. And I just feel like I'm losing so many opportunities because I don't know how to teach them about how to use that money properly. I just kind of hand it to them, and then they waste it. And then I realize that, you know, that was a good opportunity that I just kind of hand it to them and then they waste it. And then I realized that, you know, that was, that was a good opportunity that I just blew. So where do I even start with that age? Well, there's three things, really four things you want to teach kids about money. Obviously gifts narrows it down to three, but the first thing we want to teach kids about money is that money comes from work. And so they do they do chores they get paid they don't do

chores they don't get paid our kids were on commission they weren't on allowance now that doesn't apply to your question but that's thing one then once they get money and we'll apply that to your question there's three things you do with money you can give it you can save it and you can spend it now at our house we did not require our children give money away that was given to them for Christmas or for a birthday. And we did not require that they save all of it or something like that. But the truth is that a three-year-old and a one-year-old have absolutely no cognitive ability to grasp what's going on anyway. And so you just make the decision what i did there was if they needed a toy or something then we didn't have the money i would have bought them a toy out of that money but otherwise i just put it in their

savings account i just dump it in there because someday they're going to want a car and i'm going to start their little car fund with some of their christmas money because they don't need anything else you know uh but but if you want to get them something out of that, that's fine, and spend it on them, that's fine. Now, the 7-year-old, you can start to help them make some decisions and say, Honey, some of this money you need to save from your gift, and some of this money you need to buy yourself something with. And then you get the opportunity when they're buying something at 7 years old, even 5 years old sometimes, on up to 25.

You get the opportunity to teach them how to buy things properly. You know, buy things of quality that are going to last. Buy things, you know, on sale. You know, save up and have enough money to buy a good one instead of a cheap one that's going to break. And, you know, and you just talk through, you know, the value of a dollar, so to speak, and help them learn how to do wise purchases. And it's, you know, so you create a few teachable moments. It's not quite as powerful when it's a gift but if they feel like emotionally that they worked to get the money oh now that money being given being saved or being spent wisely that

really reaches down into their little hearts and you know and touches them and changes them so we have a a box of teaching aids called Financial Peace Junior. And it's got the three envelopes in it, a give envelope, a save envelope, and a spend envelope. It's got a chore board for the refrigerator. That's a little dry erase board. That's your commission worksheet, right? If you do your chores, you get paid commission. And I'm going to give you one of those for Christmas, okay? Thank you so much. Now, get that out and look at it and enjoy it and use that to teach the kids. And it further goes into what I'm talking about here as well. So, hey, thanks for the call.

Michael is in Odessa, Texas. Hey, Michael, how are you? I'm doing good, sir. How are you? Better than I deserve. What's up? I was just calling to ask you what you thought about investing money through your personal bank, like whoever your personal bank is.

I bank with Chase. I just wanted to know what you thought about that or if there was any other ways that you could suggest that I invest probably about $100 to $400 a month in, in the long run to, you know, make more money for itself. Yeah, absolutely. Well, you would open a good Roth IRA and some growth stock mutual funds that are going to grow over time. And I would never do my investing through a bank, ever. I wouldn't get my muffler fixed at the transmission store either.

Okay, gotcha. It's kind of the same thing. So what I would tell you to do instead is just click on SmartVestor at DaveRamsey.com. I'm not in the investment business, so I can't help you. But I have 2,000 brokers around America that our team has vetted and has combed through to get ones that have the heart of a teacher that will sit down with you, and all they do is investing help. They don't try to sell you a credit card or make you a car loan.

All they do is investing help, and that's the problem with using somebody like Chase. I would never have a brokerage with using somebody like chase i would never use a broker have a brokerage account through somebody like chase ever and so just sit down with someone that is their whole business is brokerage and is helping people do investing and if you click on smart investor you put your info in it'll drop down a list of the smart investor pros they're in the middle of odessa area and you can pick which one you want and so on. Sit down with them, and they'll have the heart of a teacher,

and you'll understand and learn and go through the whole thing, and that's what you're supposed to do. Chris is with us in Houston, Texas. Hey, Chris, how are you? Good, Dave. Thanks for taking my life on that call. Sure. So I guess we're in a new situation here.

We're in our late 40s. We have no mortgage, no car payment, no debt. Wow. We have our rainy day fund funded. Way to go. We also have, thank you. Well, I'll have to admit that it wasn't all done through us. It came through Chapter 13 at one point,

and then I really, here just recently, we lost my wife's father, and he gifted us an inheritance. And so, you know, we have no retirement to speak of, and we have two kids, and we don't really have anything put aside for their college. And the inheritance is around $250,000, $270,000, and we just really want to respect the gift and be responsible. We just don't know where to start, what to do with it. I know we need to be a little aggressive, but, you know, we don't want to lose it either.

No, I don't think you need to be aggressive. I think you need to be conservative. I invest in good growth stock mutual funds inside my retirement accounts for long-term wealth building. I spread it across four types of mutual funds, growth, growth and income, aggressive growth and international. That's what I would suggest you do. I would certainly use some of this uh and put

as much of it into roth iras and so forth as you can do and um and i'd open a couple of 529s for the kids with the same exact mix and uh you know you can dump ten thousand dollars this year ten thousand dollars next year into a 529 in most states that's how it's set up and maybe even more and how old are your kids my daughter is 17 she may or may not choose the college route my son is 13 he most likely will okay well the i mean i guess there's no way to know that yeah if she's 17 there's not a point in putting it at 529 because if she's going to go it's going to be in a year or so and it doesn't serve any purpose to put it in there because the only thing about the 529 is the growth from now on is tax-free. So she's not going to have much growth before she goes to school, if she goes to school.

So, you know, but sit down with a smart vest or pro, like I was just telling the last young man. And here's the thing. Go slow. Take your time. You and your wife do not put money in anything you don't understand. Don't put money in something because I said do it. Don't put money in something

because a brokerage advisor said do it. An investment advisor said do it. Do it because you understand it. Now you don't have to get a master's degree in finance. The good news is this stuff's not that complicated. And you can learn it. But take your time and have a sense of peace about who you're working with

and about what you're doing. Do not put money in something just because you trusted your guy. Put money in it because you understood it. Now, what I would do with it is I would invest it in mutual funds. It's in your case. And I would earmark some of it for the kids and some of it for retirement and some of it just for wealth. And a SmartVestor Pro can help you do that.

Click SmartVestor at DaveRamsey.com. Again, it'll drop down a list, and you pick which one you want to sit down and talk to, or you can talk to all of them and interview them. If you get a bad feeling, leave. Don't put money with people when you get a bad feeling. Take your time and understand it. It's your job to manage this money.

This is the Dave Ramsey Show. Hey, it's Kelly, associate producer and phone screener for the Dave Ramsey Show. If you would like to do your debt-free screen 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.