The Ramsey Show - App - True Recovery Is About More Than Just Sobriety (Hour 2)

Episode Date: November 21, 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. Happy Thanksgiving Eve to you here on the Dave Ramsey Show. We have a Thanksgiving Eve tradition here, and that is your ticket to get on the show today is not only get past Laura, who's screening calls today, but also you've got to tell us what you're thankful for. I know you might think that's a little cheesy. I don't really care.

You should be grateful. You should be grateful. You should be thankful. And we're going to help you with that. So, yeah, what are you thankful for? Everybody's got something. Everybody's got something. If it doesn't take long to stop and go, wow, I'm grateful for that. Becca is with us in Fort Wayne, Indiana, to start off this hour hi becca welcome to the dave ramsey

show hi dave thank you so much sure what are you thankful for i it sounds cheesy but i am so grateful for god's faithfulness and that what we can't handle he totally can i don't think that's cheesy at all that's awesome very. So how can I help today? Well, in a nutshell, my 18-year-old brother is living with my husband and I, and he is a recovering drug addict, and he's doing really great, but we're trying to help him figure out how to manage money if he's starting to get a job but not give him, you know, we don't want him to relapse and get in control of that money, and he's never had a good money example. So just how to help him.

We're giving FPU for Christmas, but other than that, you know, it's a little different with addicts, as I've heard you talk about. Okay. Well, that's excellent, excellent advice and excellent thing for him to do. You know, recovery always involves multiple parts of your life. It involves not only just staying sober, the sobriety part of it, but real sobriety involves relationships and career choices and money choices and taking care of your physical body. And, you know, what it amounts to is you just start taking care of life and you've completely ignored it before because you were because of the addiction and so um it's it's part

of his thing to learn to handle money now um and it's not like that's going to cause a relapse it's quite the opposite uh the the more he takes control um of these different areas of his life, the more his sobriety is going to be strengthened. Does that make sense? Absolutely. So, yeah, I think it's wonderful he's getting a job. And then what I would do is just be all up in his business. You have a right to.

You're furnishing him a place to live. You're participating and cheering him on in his in his sobriety and um so i'm holding him accountable on any area of his life if i'm you that needs to help him move forward you know i mean he needs to get the job he needs to show up and work hard at the job he needs to smile and be grateful for the job that's the career side of the equation the money side of the equation is we're going to go over your budget with you kiddo and uh And we're going to love you. We don't need any of your money. And we're not trying to be control freaks, but we are going to look at it with you. And part of you getting free rent here is you winning. And winning involves you touching that area of your life. And we want

to hold you accountable to that. And anyone needs accountability. An 18-year-old especially needs accountability. An 18-year-old in recovery really needs accountability, right? And so that's not controlling. It's not micromanaging. It's just loving him well to be kindly, gently, but very firmly in these different areas of his life. So, you know, if I'm in your shoes, him living there is going to have some for free, which is what I would suggest. But the way he pays rent is he's going to allow us to walk with him

and cheer him on and hold him accountable in these different parts of his life that he's now got to put back together. So, yeah, that's great. And then just work, you know, whatever he's got to do. I'm sure he's got some debt probably to clean up from this time. And you work through that. So, hey, thanks for the call. We appreciate you joining us.

Open phones at 888-825-5225. No, I am not an addiction expert, and no, I don't hold myself out as an addiction expert. But let me tell you what, I've been working with people with money issues for 30 years. That's longer than a lot of you have been alive. And let me tell you, 100% of addicts eventually have money problems. You cannot make enough money. It's physically impossible, logistically impossible, to make enough money to not have money problems as an addict. Sometimes it takes a while.

It might take a decade. But eventually, you either deal with the addiction or you're going to have serious money problems. Consequently, we have worked with a lot of addicts over the years. And consequently, we've learned the language and learned to work with the addiction counselor and understand what's going on in the recovery process. And so we've become a little bit knowledgeable about that around here.

And it wasn't that we've had formal academic training or something like that, but it's just got to do with experience of working with folks loving them and trying to help them win and overcome and i gotta tell you some of the biggest heroes i know are people that have overcome stuff like that i just admire people that fight their way through that and get that get to sobriety and stay there it's just just such a tough thing. But when they do it, they become impressive people usually, the ones that fight their way through it and stay there. They have the ability to do a lot of stuff. It's pretty cool, pretty cool people. And, you know, the other ones we run into a lot, just to continue on this vein, you know folks that struggle with depression particularly bipolar um because when you when you're manic people spin like like they're in

congress when they're manic man they go bananas and then then they're depressed because they're all in debt yeah and so you know it's we don't treat manic depressive bipolar disorder here we don't know. We're not qualified to treat it. But we do see all the financial problems that result from it. And we have seen a lot of people over the years. I've seen a bunch get proper counseling and, in some cases, proper pharmacology to get that balanced out and uh live a life and move past their bipolar and and really become again very impressive people that fight their way through that stuff and uh none of these things are chronic none of these things are are without hope uh and so i think

it's just wonderful what she's doing for her brother there. That's very, very cool stuff. You can win against these things that people face. And if you're scared and you feel like there's no hope, I'm here to tell you, I've worked with a lot of people just like you, and I've seen them win. Yeah, they've got to make some tough choices, and they get tough people in their corner that tell them the truth and love them well and love them firmly, and real love.

I'm not talking about something that's enabling or toxic weirdness. But I've seen people just like you, whoever you are, turn it around. What are you thankful for on this Thanksgiving Eve? That's one of the things I'm thankful for. Those heroes I was just talking about are special folks. And I've had the pleasure of knowing several of them. This is the Dave Ramsey Show. One question I get asked all the time is, do I need life insurance?

Listen, the whole point of life insurance is to replace your income for someone who counts on you. So if you have a spouse or you have kids, yes, you need term life insurance. It's the only way to protect them until you're out of debt and have built up your wealth. You're only digging a deeper hole if you waste money on cash value plans since it robs you of the ability to make real progress. And that's why I send you to Zander Insurance, and I have for 20 years. That's where I get all my insurance, and they only offer the plans I recommend. It is not expensive. It's not complicated, and Zander will be there as your guide every step of the way.

Visit Zander.com or call 800-356-4282. You need to get this taken care of. I can give you the advice, and I can tell you where to go, but it's really up to you to take that important step to get your family protected. That's Zander.com or 800-825-5225. Richard's in Kansas City. Hey, Richard, what are you thankful for? I'm thankful that the universe always provides.

Some days I may be the giver, but other days I'm the receiver. I hear you. How can I help today? Well, me and my wife are just starting Baby Step One. In the past, we've tried working the Dave Ramsey solution, but through my own pigheadedness, I wanted to modify it. So this time we have decided that we're going to do it faithfully the way you instruct. So my question is about my first emergency fund. I'm also a sole proprietor, so we're building our first $1,000, but should I also have an emergency fund for my business?

Yes. Your business is a separate issue. You should have a separate checking account and a separate set of books away from your personal for your business. I assume you do? Yes, I do. Okay. Do you have any debt that is associated with the business?

Other than the vehicle, no. Okay. All right, good. And so what we tell folks to do is to run your monthly profit and loss statement at the end of the month and say, what was my profit for the month? And after you take out a living wage for yourself, a basic wage, then I would, before I brought any more home, I would save a percentage of my net profits every month.

So what kind of income is your business producing? Oh, my bring home is about $1,400 a week. Okay, All right. I can only work on a week-by-week basis because I deal with other professions, and there's about between four and six weeks a year that I don't get to work. Okay. I'm a livery driver. Gotcha.

So I deal specifically with business customers. Gotcha. Gotcha. So I deal specifically with business customers. Gotcha. Okay. All right. Well, what you can do is just say, I'm going to save a percentage of whatever I make in a week, profit. Mm-hmm. And let that be your retained earnings or your business emergency fund.

And if it gets too big, if it gets to be too big an amount sitting in there then just stop it doesn't have to be a lot um i mean you could save 10 of your of your net profits per month and leave that in the business as a uh it's still going to be taxed at the year end but leave it there as retained earnings and that will allow you to take your taxes. I mean, to build your business retained earnings, your business emergency fund. But that's a separate issue from your personal stuff. And then work the baby steps, as you said, exactly as prescribed on the personal side. Tina is with us in Philadelphia.

Hi, Tina. Welcome to the Dave Ramsey Show. Hi, Mr. Ramsey. I'm so excited to speak with you, and I am thankful for God's continued grace and mercy on my life. Good for you. That's good. How can I help?

So, I have an extra home that I have from my old home. I just got married about a year ago, and my husband and I bought a house this year. The question I have for you is, I'm selling the house in the spring. It will take care of baby step two and three. Good. So I'm wondering if it's a good idea for me to start baby step four now? No. We'll continue to, no, okay. Start it when you get to baby step four. Okay. You have to finish two and three before you do that. The spring is going to be here in 20 minutes.

It's not that big a deal. But just throw money at the debt right now. If you've got some extra money today that you would have put on this baby step four discussion you're having with me, just put that on the debts. And then when the house sells, you can use it to fund a Roth IRA or accelerate some Baby Step 4 stuff if you want to because you would have less debt from the next three months or whatever having paid on the debt.

So I don't think it's going to make a world of difference, but it's a very good idea to just say, we're going to stay right with these baby steps in order. They're very specific, and they're time-honored, and there's huge millions and millions and millions of people that have done it in that order. So unless there's just some kind of really, really crazy thing, I don't change them around. And so I would just stick straight to that. Brittany's in Los Angeles. Hi, Brittany. Welcome to the Dave Ramsey Show. What are you thankful for? I am thankful for my church family, for

their support and prayers. Good. How can I help today? Today, my question is, I'm trying to get my husband on board with us getting out of debt we took your financial peace class about four or five years ago and um we just recently moved so now our rent is cheaper and we're trying to save more money and every time we do a budget um we're okay at the beginning of the month and then as the month goes on it like the budget goes out the window so for five years that's what's what happened no um the last five years we we did not take your advice we just kept we went through the program

and now we just kept doing what we were doing okay why but i don't know um and then recently we we've had a baby so now i'm trying to really push it uh you know this is why we need to get out of debt for our daughter. Sounds to me like you flunked the class. It's a hard class to flunk because there's not even a grade. So I guess you've got to go back through, don't you? Yeah. Yeah, I think both of you are going to. I've been listening.

So can you get new father? Is new father going to be a grown-up now that he's got a kid? Or are you guys going to grow up now and actually, you know, adults devise a plan and follow it. Children do what feels good. Now you've got a baby. Maybe it's time to grow up, right? Yes. Yeah.

Can you get him to go to the class? You think you guys are going will actually do it this time? Yeah. I don't think you can blame him much for not being motivated. You've been sitting on your hands for five years, too. Yes, I know. And you suddenly come home with a baby and have a new idea. Yeah, and I'm not shocked he's not involved.

But, I mean, he's like, who are you and what have you done with my wife? She was okay before she had this baby. But I think I'm kidding around with you, but not much. I think the two of you, this is a signal in your life that both of you need to start getting really serious because you can wander around Los Angeles and be bankrupt, right? Yes. Yeah. And so I'll pay for the class if the for a one-year membership if you guys

will promise me that both of you will go and this time you freaking do the stuff okay oh yes because you know if both of you you know if both of you do what i teach it'll work right yes i know i've listened to a lot of calls. He knows, too. He knows it'll work. You just didn't do it. Is that right? Yes, that's correct. Okay. All right.

You can do it. I know you can do it. It's just a decision. You just got to decide. We're doing this. You got to get sick and tired of being sick and tired. People don't change their lives because Dave Ramsey told them to. People change their lives when they say, I've had it.

I'm not living like this anymore. I have a new baby, and I'm scared to death, and you, my husband, are going to class, and you, my husband, and I are going to do this stuff. And, you know, the worm has turned. Something's changing here, baby. You know, and that's what's going on. When you all get like that in your house, Brittany, things will change. But if you just kind of go to, I mean, you can go to class and look at the stuff and not do it,

and it's of zero value. It's like joining a gym and not attending. You know, you're not going to get in shape sitting at home thinking, oh, I have a gym membership. It probably doesn't work, you know. You've got to do it. And so you hold on. I'll have Laura pick up, and I'll give that to you as our Christmas present.

The new baby gets a present. I'll give the baby up, and I'll give that to you as our Christmas present. The new baby gets a present. I'll give the baby a present. Mommy and Daddy get to grow up. So you hold on. We'll put you in the class. And you know what to do. You know what to do. I believe in you.

I think you can do it. And if you two have any questions as you're doing this stuff, you've got to go to the freaking class if I give it to you free. But if you get questions, you call me and I'll help you. This is the Dave Ramsey Show. Why in the world would you trust some random guy in a cube when getting your mortgage? Do you really think he cares about your long-term money goals? Well, he doesn't. Those companies care about getting you into whatever home loan program they're pushing that week.

When it comes to ordering a cheeseburger, the meal deal works fine. But let's get real, people. We're talking about the largest investment you'll probably ever make, so don't be naive and trust an order taker who pressures you into a prepackaged loan. My friends at Churchill Mortgage have been helping my listeners for over 25 years. Call Churchill Mortgage and get custom solutions from an expert within 10 minutes. It's simple. They'll shoot straight with you and quickly show you the real way to save money.

Call 888-LOAN-200. That's 888-LOAN-200 or visit churchillmortgage.com. This is a paid advertisement. NMLS ID 1591. NMLS ConsumerAccess.org. Equal housing lender. 761 Old Hickory Boulevard, Redwood, Tennessee 37027. Thanks for joining us, America.

In the lobby of Ramsey Solutions, James and Marina are with us. Hey, guys, how are you? Hey, excited to be here. How are you? Welcome, welcome. Where do you all live? We live in the St. Petersburg, Florida area. Awesome.

Welcome to Nashville. Happy Thanksgiving Eve. What are you thankful for? I'm thankful for my family. Amen. Same, family and for our health. Good, very good. All right, and all the way from Florida to do a debt-free scream.

Yes. And how much have you paid off? We paid off $25,020.13. Perfect. How long did this take? That took 13 months. Very good. I love it.

And your range of income during that time? We started at approximately $40,000 and ended around $65,000. Very good. I love it. And your range of income during that time? We started at approximately $40,000 and ended around $65,000. Very cool. Good for you. Very well done. I love it. And so what kind of debt was the $25,000? Well, it's kind of opposite for us, I guess. Our smallest was a student loan, and then we had credit cards, and then our largest was a car loan. Student loan, credit cards, and a car loan. You guys were normal. Yeah.

How long have you all been married? Six and a half months. Six and a half months. Or six and a half years. Oh, well, that's better. Okay. All right. But something happened 13 months ago that caused this all to go into gear.

What happened? Yeah. So about 13 months ago, I was reading a book called Because We Love Our Marriage and Because We're Having a Rocky Point in Our Marriage. And in that book, it mentioned the debt snowball and how financial expert Dave Ramsey says that this is a good way to get out of debt. So that was probably the second time I've heard of you. And shortly after, I was at a bookstore at the mall, 321 Books, and I saw your book just sitting there,

and I felt compelled to pick it up and get it and read it, and I had a hard time putting it down. Wow. And it made me feel like the impossible, what I felt was impossible, was now possible. Okay. Paying off debt and becoming successful with money. Okay.

And I can attest to that. I've known him for more than half of my life, and I've never seen him read a book and not put it down. It was that 321 book in Tyrone Mall in St. Petersburg, Florida. And he came up to me and told me he wanted to work on our finances. And at that point in our marriage, we were working on how to communicate better. And so I figured, what's the worst that can happen? He's trying to help make our family better, help us to get out of debt. And I said, what the heck?

But I probably did it kicking and screaming the entire time. Okay. That's fun. So then you got started 13 months ago. Were you both on board by then? By the time you actually did the first budget? Marina, were you there or were you just still kicking and screaming? Kicking and screaming.

Okay. All right. Did you all the way through the 13 months? Yes. Oh, you really? All the way up until now? Okay. All right.

So you never really believed in any of this at any point? I saw the end results, but I'm more of an instant gratification person. He can see the bigger picture, whereas I can see what's in front of me so uh working on this um not really together but working on this tolerating the process did that help some of the marriage communication stuff yes it did um we're better communicators and we talk about our finances and not just about our finances everything in our marriage communication is key yeah it is my wife sharon says that every day yes she's right very good well done you two we're proud of you so what's the key to getting out of debt for me i felt like it's not for everyone but for me it's

finding your village because you have to surround yourself with people that support what you're doing otherwise this is going to take twice as long i felt like we had a great support system It's finding your village because you have to surround yourself with people that support what you're doing. Otherwise, this is going to take twice as long. I felt like we had a great support system. And throughout our journey, we even had my husband would ride his bike to work 20 miles each way, I think. Wow. Well, 20 miles total, 10 miles each way. But he's a high school teacher, so he just had to wake up extra early so he can ride his bike because we sold our second car because we didn't feel like it was a need for us at the time.

And we had a close family friend who purchased us a Dave car. Wow. That's what we called it. How fun. It was so touching, and it did what it needed to do, get us from point A to point B. Right. Yes. Very cool.

And just the love we had doing this where we didn't feel judged. And sometimes we got weird looks like, why do you want to do that? Or why couldn't I go out and get my hair done? But it was fun. And I'm glad that we had the support system that we did. Will you go back in debt? No. No, never.

I'd say that the secret is believing that you can do it because I think our brain wants to be right more than it wants to be happy. So if you believe you can't get out of debt, if you believe you won't be successful with money, your brain is going to find reasons for that to be true. That's an interesting statement. I like that. Your brain wants to be right more than it wants to be happy.

That's just devastating statement. I like that. Your brain wants to be right more than it wants to be happy. That's just devastatingly true. Wow. So as I was reading your book, then it gave me the belief that I needed and then everything else. Usually your brain tries to look for ways to be right, but you gave us the plan and all we had to do was follow it. Yes. It reminds me of what you said, how he kept pushing for me to use the envelope system. And for the longest time, I wouldn't. And then they did a finance group at church, and they were pushing for that envelope system.

And I finally sucked it up, and I said, okay. And then I had my kid's nana. She actually made me what I call a day wallet. So it's color-coded for me. And each color represents one of our cash budget items. And it's worked wonders for us. Very cool. Good for you guys.

So it sounds like you had a good group around you. And you've made some serious progress not only in the money part, but in the marriage part in the last year and a half. Yep. Way to go. How does it feel now that you're debt-free? It feels awesome. It feels amazing.

Was it worth it? Absolutely. Yes. Wouldn't go in debt again to do it, but it was definitely worth it. Good, good. Well, we've got a copy of Chris Hogan's book for you, Retire Inspired. I want that to be the next chapter in your story to be millionaires now and outrageously generous as you go along.

So you can do it. I'm proud of you. Well done. Thank you. All right. James and Marina from St. Petersburg, Florida, paid off $25,000 in debt. And the kiddos are with us. Give me the names and ages of the kiddos.

Eden is five. Levi is three. Eli is one and a half. All right. Count it down. Eli is one and a half. All right. Count it down. Let's hear a debt-free scream. Three, two, one.

We're debt-free! Love it! Love it, love it, love it! Well done. Man, oh man, oh man. Fabulous. Excellent job. Open phones this hour as we talk about your life and your money. It's a free call at 888-825-5225.

Do you picture yourself when you hear the word millionaire? When I said to them they're going to be a millionaire, that's the next chapter. Do you believe that? What he said, I think, does your brain, your brain wants to be right more than it wants to be happy. You know, most millionaires come from beginnings just like you. Our good friend and retirement expert, Ramsey personality, Chris Hogan, has a book coming out where he studied a ton of these guys. It's called The Everyday Millionaires. You need to preorder it.

It's at DaveRamsey.com. Most of the millionaires that we talked to in doing this research had a professional with them. They had someone who helped them with their investing and to continue to invest, to help pick out their 401k options or pick out the mutual funds for their kid's college or pick out the mutual funds for their Roth IRAs or whatever it is. And so you don't DIY your investments any more than you work on your own car these days.

I mean, it's crazy. There's very few things I DIY, especially in difficult, complicated things. Even if I know a lot about them, I get some help. And that's where you click SmartVestor at DaveRamsey.com. Put in your information. It will drop down a list of the SmartVestor pros in your area that we endorsed. And they'll get with you.

You can sit down with one. You pick the one you want. And they'll walk you through the process. It's one of the keys to being a millionaire. This is the Dave Ramsey Show. We are glad you are here. It's Thanksgiving Eve. What are you thankful for?

Angie is in San Diego. Hi, Angie. What are you thankful for? Hi, Dave. I'm thankful for my husband. He has sacrificed so much that I can stay at home with our son and raise him, especially because he had some complications at birth, and now he's doing great. Great.

How can I help today? Yeah. So my question is given that my husband has been so supportive. He supported me to be able to go to school full-time for nursing and get my degree. Good. He is, I'm wondering what your advice would be for him to quit his job, we can move back home, which would be in Texas, where we have a support network, and I could go to school and support our family. I'm sorry, I could go to work and support our family while he goes to law school.

Okay. And how are you going to pay for law school? Well, thankfully, he's a veteran, so we have two and a half years left of the GI bill, and so they would pay for all of it. Amazing. Okay. And so you're going to be a nurse, and your guys are going to pay the rent and the light bill and the food bill with that, and take care of the baby, and he's going to law school. What's wrong with this plan?

There's nothing wrong with this plan. Well, he has a decent job with a decent salary, and I just hate to see him walk away from a job and go into an unemployment status, a student status. I don't. He's not walking away to go be a deadbeat. He's walking away to go be a lawyer. He's got huge career aspirations. Absolutely.

This guy's smart and ambitious. He's not walking away from something. He's walking towards something. Okay. Do it. Great. And even in our financial situation, you would say it would still be smart to, even if we had to wait a few months before I got a job, or should we wait to move until I have something lined up? You're a nurse. You can get a job in 20 minutes.

What city in Texas? Dallas. Oh, you can get a nurse. If you can't fly to Dallas and spend three days there and come home with a job, something's wrong. So when are you moving? Great. Thank you. So we're looking at moving just to get through the holidays, maybe January, February. Has he already been accepted to law school?

No, not yet. So that's the other thing. He hasn't even taken his LSAT yet. So we've been trying to get him transitioned from his company to another location in Dallas but so far all the doors keep closing. Well why can you not take the LSAT in San Diego? Oh he can it's just San Diego is a very expensive market and I just feel like we're we're living paycheck to paycheck, but we're debt-free, and we're only living paycheck to paycheck because I couldn't work at the time because my son was sick.

But now he's doing great, so I can go back to work. But if you move to Dallas, and he doesn't work and you do work, and he hadn't even taken the LSAT, and it takes him two years to get into law school, that doesn't make sense. Absolutely. I agree. So, yeah, both of you need to be working until he gets accepted to law school that doesn't make sense absolutely i don't want to say i mean so yeah both of you need to be working until he gets accepted to law school okay and then yeah and

you can do it and you can do that in san diego or you can do that in dallas i don't care what's he make now he's making about 75 000 doing this market he um he's a defense contractor so i don't quite know what he does but it's specific to oceanographic and technology and what we you know they don't really have that in dallas so so how would he what would he do if you went to dallas that's a great question and that's something that we've been i mean he doesn't have to make 75 but if he can land something making 50 because it might take a year to get through the LSAT and get accepted to law school. It probably will.

Absolutely. And so I don't want him having nothing to do for that entire year. But the concept of once he is in law school, the military paying for it, and you working to cover household expenses while he becomes a lawyer is brilliant. And I definitely would. That's where you want to end up. But it may be three steps to get there.

You may be both working in San Diego until he lands something in Dallas. And I think you can land something in Dallas as a nurse very, very quickly. I really, really do. There's almost always a shortage of nurses uh in most markets and so it's just like one of the best career fields in terms of landing something quickly and easily um to make some money so yeah that's what i would do but i think you got to have this kind of you got to have these first three dominoes lined up, and they're not lined up yet. But once you get them lined up, then push the dominoes.

So, good question. Thank you for joining us. Open phones at 888-825-5225. Leslie is with us in Kansas City. Hi, Leslie. How are you? I'm great, Dave. How are you?

Better than I deserve. What's up? Well, so first I'm grateful for you because a year ago I bought Financial Peace University. My husband and I went through it, and we have just become very intentional this year. Great. So I want to thank you for that. So my question is I would like to understand stock market volatility in retirement a little better because we've been watching the stock market go up and down this

year. And we take your advice, nobody gets hurt until they hop off the roller coaster. So we're just staying on and saying we. But when someone's in retirement and that is happening, how do you handle that? Because if there are no eggs coming out of the geese that year, do you have to kill a goose? Or how do people plan for that in retirement? Well, let's just use a short-term example, but apply it across 20 years in retirement, okay? But let's say in 2017, the stock market, the S&P 500, went up 19.7%. Okay? Okay.

Up. This year, as of today, we're at about a break-even. Really hasn't lost any, hasn't made any. Okay? I don't know what we'll be at by calendar year-end, but usually we'll see a push in December. So it'll probably make something, but it's not going to make 19%. So let's say we get to the year end of 2018, and the stock market makes 4% this year.

Last year it made 19%, okay? And you are set up to pull off 8%, okay? I'm just making up a number. Then that's the eggs. You're pulling out 8% of eggs. But last year, you know, that would have left you 11 in there. 19 minus 11, right? Right.

Okay, this year, you're going to pull off out of 4, but you're going to pull out 8. You're going to pull out an extra 4. So you're taking a little chunk out of the goose. But the goose was 11% bigger last year after you drew off. So on average, across those two years, you're still ahead. Does that make sense? Yes. Even though one year, even though one year.

Some amount in cash. Yeah. So you just set a percentage of your nest egg that you want to live on, and it should be below average stock market returns if you're invested in good mutual funds. And I assume you are, because that's why you're asking this question. Yes. So what is the size of your nest egg? So right now we're not close to retirement.

I'm 46, my husband is 44 okay so this is theoretical all right so how much is in your nest egg now uh we've got about 600 right now okay well let's pretend that you are a couple years along and you've got a million and a half okay okay ten percent's 150000 a year, right? Right. And what's your household income right now? About $200,000. Okay. All right.

And so, you know, you can probably make it pretty good on 8% of a million and a half, give or take. And as long as your returns are averaging more than 8%, I like to say 8% plus 4 for inflation, so 12%, or if you use 6%, I don't care, but whatever number you want to use that you're going to live off of, it has to be less than average stock market returns, and then some years you might cut into it, other years you might replenish. Some years you might cut into it, other years you might replenish. Some years you might cut into it, other years you might replenish. But if it averages 12 and you're pulling off 6, on average, you're going to grow over a period of 5 or 10, 20 years. It's going to grow. If you're only

pulling off half of what the returns are. But in a given year or a given month, you might be cutting in to some of the other year's excess returns. And that's how your law of averages works out. Hey guys, this is James Childs, producer of The Dave Ramsey Show. I'm excited to announce that we're now carried on 600 radio stations across the country. To find one near you, head to DaveRamsey.com slash show.