The Ramsey Show - App - What Are Savings Goals AFTER Retirement? (Hour 1)

Episode Date: October 21, 2020

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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 done, cash is king. The paid off home mortgage has taken the place of the BMW as the status symbol of choice. Ken Coleman, Ramsey personality, host of the Ken Coleman Show, is my co-host today here on the air. We're taking your questions about your life, money, and your careers. Your questions about your job. Maybe you need one in the middle of a pandemic, the end of a pandemic, whatever we are. The one thing I am sure of, Ken, the phone number, by the way, 888-825-5225 i did notice that it's almost november 1st which

means we're the dumpster fire is about to go out yeah called 2020 that's right the year of the dumpster fire could not get here any quicker and so i figure i'm having this unbelievable outlandish new year's eve party yeah i'm in to say, everything bad stays back there in 2020. We're moving forward. Yeah. Does that mean we're going to burn a lot of things as a symbolic gesture? Yes. I want to burn some stuff.

Yes, all little boys are pyros. We have to burn stuff. Well, it's a cleansing process, you know, when it's there and then it's just ashes and then we can move on to 2021. Yeah. I hope that happens. It's going to happen. All right. I'll guarantee you I'm going to be burning some stuff.

Oh, I know that. I just hope we can all move on to 2021. Well, we all aren't going to do anything, but you and me already moved on. Three people have, yes. Yes, seven of us. Hey, good things are happening, though. You know, we're seeing job numbers unemployment numbers are now dropping we're in the seven percent who would have even seven percent

unemployment yeah we're in the low seven down from 40 yeah unbelievable so you know dave you know what i was telling did you hear that reported on the nightly news no you don't and that was i was about to say this the war i don't know if it's just me and Stacy. We were talking about this the other night. The world that I hear and read and see from the media is very different than the world here. That I live in. In our zip code. No, that I live in, yeah. I don't see what I hear. No, I've been in other cities.

I've been in other cities. And it's, you know, they're not burning from riots. And they're not, there's people out walking around. Yeah. Doing business. Yeah. Shaking hands. Yeah.

Hugging necks. We were with hundreds of leaders. They were not trapped in their basements hiding. No. We had a bunch of people at Entree Master Series last week. And they're from all around the country. They're winning. Yeah.

They're winning. Well, and they're, like, their interactions are fairly normal, unlike a wussified presidential debate, right? Oh. My God. I mean, can you put any more glass? Could you put up more plexiglass, please? Yes. Trying to support the entire plexiglass industry.

For those watching on YouTube right now, look at this. There's no plexiglass between me and Dave. There's no plexiglass. We're okay. Yeah, but you almost touched me you need to be careful with that key word is almost i do know my boundaries i know where not to file a complaint on you oh wait a minute i'm the complaint department yeah you're the ceo that would go right to you no i i think that what's exciting davis i think we're beginning to see

um there is a there is a fatigue it's not good that man should be alone. No. But you know there's fear fatigue. I think the boy that cried wolf. You're tired of the fear porn. People stopped listening to the boy that cried wolf at a certain point. And I think it's time for good men and women to go, you know what? There's no reason for you to be scared.

It's time to get back to life. It's time to get back to solving problems for people. It's time to get back to doing what we were created to do. And we're just going to roll with the punches. It's time to get back to doing what we were created to do, and we're just going to roll with the punches. That's life. Life is uncertain, and we can't walk around being scared about what boogeyman is going to jump out from behind the corner all the time. Well, there's always risk.

I was talking to one of our leaders at lunch. I was sitting down in the cafe area with our team and just plopped down at a table, and he said, my 16-year-old just got his pilot's license. Oh, how fun. So he's a lot more safe there than he is driving up the interstate to get to the airport. That's correct. Because no one in a cockpit ever eats a Big Mac, puts on makeup, and texts while they're driving. It's true.

This is a very good point. You're dangerous on the interstate. You are safe when you're in an airplane, comparatively speaking. And yet we do get into an aluminum tube and fly through the air at rapid miles per hour. Yeah. And call that good. Yeah. Yeah.

It's going to be nice to fly places again, too. This is exciting. My wife said I miss cruises. I don't. No. That's a sensitive topic for you. Well, sensitive topic for a lot of reasons, but I don't just generally, and just as a Dave statement, I don't miss cruises.

But, yeah, the Ramsey cruise being canceled is still an issue. All right. Open phones at 888-825-5225. Ken Coleman is my co-host today. Rick is in York, Pennsylvania. Hi, Rick. How are you? Hi, Dave. How are you? Great. How can we help? I have a question. I am 66. My wife is about to turn 67. We're both retiring at the end of the year. And I don't know how to focus my savings now that I have reached retirement. I was wondering if you could give me some guidance.

I'm sorry. Focus on what? What do you mean? I've been saving 15% for retirement. Now I'm there. What do I do now? Oh, okay. How much do you have saved? How much is your nest egg? We're sitting at about a million and a half way to go man good for you everyday millionaire did you inherit this or did you save it all uh it was all working we didn't inherit anything okay so that whole mythology thing of everybody inherits what their wealth is a bunch of crap we knew that by the way but anyway

uh all right so you work for it you're 66 you got a million and a half so obviously you're going to use it to live off of correct yes sir and so some of the investment returns uh are to live off of you don't necessarily have to grow it anymore if you want to you can i mean you very likely will live another 20 or 25 years statistically i'm hoping well the average you know well i like it here there you go and so far it's worked out for you you're a millionaire so you know good for you so i mean i guess you set your mutual funds up and your investments up to where you draw enough off of them to live and have the good life and be outrageously generous and you have kids yes sir i got four okay and so at some point you're managing at some point you're managing

the investment to leave it to them to change your family tree right yes sir and so i'm going to pour into that legacy meaning i'm going to have discussions with them on what it looks like when they get this money so they don't screw it up after you spent your whole life building it and so we've had a lot of those ramsey discussions and um otherwise i mean if you're stupid or you're misbehaving you're out of the will because i can't leave god's money to you for you to manage because you're a bad manager and so these are the discussions we have around our house you know so you're doing cocaine we can't really leave you a bunch of money. You'll kill yourself with cocaine. It's just dumb. So, you know, misbehavior doesn't get funded at inheritance. But, yeah, so you're saving money to enjoy, to be generous, and to change your family tree.

Agreed? Yes, sir. And you just manage the portfolio to do that, and you can continue to grow it. You know, I'm just right behind you. I'm 60, and I'm saving and investing regularly. I act like I'm 30. I just keep going. It's all about legacy at this stage, Ken.

It is in contribution. Just because you're retiring doesn't mean you stop contributing. Maybe that's a part-time thing. Maybe that's a charity effort. Maybe that's a new business. What do you want to do? To assume that you're not going to make any more money the rest of your life is, I think, short-sighted. He didn't say that.

We didn't get into that. But what's your contribution? Anybody that's listening right now, in your 60s and you're retired, just because you're retired doesn't mean that you're no longer a citizen. What's your legacy? That's it. What do you want to pour into it? Yeah.

Yeah. A lot of people do some very cool stuff with a couple million dollars when they hit retirement. Yeah. Some cool stuff you can do with that much money. This is the Dave Ramsey Show. Families all over the country are discovering a faith-based and budget-friendly way of meeting health care costs, whether they're anticipated or completely unexpected. For example, take the Olcheski family from LaGrange, Texas.

Jeff and Carice had just celebrated the birth of a new baby boy. Shortly after, they had another expensive medical issue come up. They could have faced a huge financial setback. But thanks to Christian Health Care Ministries, the Olcheskis were spared from a ton of medical bills. As members of CHM, they're part of a group of believers who financially and spiritually support each other. CHM is the longest serving health cost sharing ministry and is a Better Business Bureau accredited charity.

It's Christians helping other Christians, and it shared nearly $97,000 to help the Olcheskis. To be a part of Christian Healthcare Ministries, visit chministries.org. That's chministries.org. CHM is a proud sponsor of Dave Ramsey Personality, host of The Ken Coleman Show, where he talks to folks every day about their careers, their jobs, their dreams, living their passions. Open phones here as we talk to you about your life, your money, and your careers. Phone number 888-825-5225. Teresa is with us. Teresa's in Tampa, Florida. Hi, Teresa. How are you? Hi, Dave. My kids are going to be super excited. They've been listening to you since they were

babies. Wow. Cool. How can we help today? Okay. So we bought our home that we currently live in four years ago with a VA loan. It is a 30-year mortgage, but our home prior to this, we had paid off early. So we had a large down payment to put on it. We're looking to refinance. And my question is, because a VA loan in Earl is at the streamlined version of the refinance, you have to lower your monthly payment by a certain amount in order to qualify. That's just kind of part of the rules. If we went into a 15-year, we wouldn't qualify. So we could only refinance. You have too much house? Well, the house is, they said that it wouldn't lower our monthly payment enough. No, no, no, no, no. I'm sorry. You don't understand. You could do a 15-year

conventional. Do you not qualify for that well i haven't looked into it honestly okay um because the vh the vh streamline may not be a good deal anyway okay and it does have it does have the regulations or the rules on it that you're talking about where the payment actually has to go down and uh see what streamline is is there's no closing costs and no um no out of pocket at all but the interest rate is higher than closing costs though the closing costs were going to be about seven thousand dollars on the va and yes really okay well you definitely want to go conventional then okay well i haven't looked into that my question was going to be, we're planning on

paying off this mortgage early anyway. We paid off our last mortgage after 12 years of living in the house and we only found Dave Ramsey maybe halfway into that. So we really buckled down. And my husband did just get an increase. He's getting a new job this year, which would be about 20,000 more a year than we were making. So our plan is to pay it off early. I didn't know if it would make sense to even refinance if we're going to be paying it down early anyway. How early? So our house is about $311,000 left. And I think we could probably throw an extra thirty thousand dollars at that i'd like to put his entire increase plus a little bit more extra in addition to our monthly payments so you can pay off 10 years

well 30 000 in addition to what i know to our normal monthly payment yeah i mean yeah i mean here's the thing here's the calculation for you go to churchill mortgage and find out the interest rate on the new loan what is the interest rate on your va loan currently we're 3.25 and we've been getting about a 2.25 is what they're offering us okay so you can probably get a 2.25 or less on a conventional okay it's usually conventional you can't get as low of an interest rate, though. Is that correct? No, it's not correct. Okay.

VA is usually slightly higher. Okay. And so if you check with Churchill and you find you can get a two and a quarter versus the three and a quarter, that's a 1% drop. That's $3,000 a year saved in interest on a $300,000 loan. Agreed? Yes. You divide that $3,000 into your closing costs.

Let's pretend your closing costs were $7,000 for the conventional. And so how long does it take to break even with a $3,000 savings on a $7,000 cost? A little over two years. A little over two years. It's about two years, yeah. Yeah, so if you're going to pay it off later. That's kind of what we were figuring. Yeah, if you're going to pay it off later than two years, then you go ahead and you do the refinance.

Yep, it's absolutely worth it. It's a no-brainer. Yeah, I mean, but if you're going to pay it off in three years, I wouldn't screw with it. It's not worth it. I mean, you're going to save $3,000 on $300,000 and do a bunch of work for that, and it isn't going to be worth it. But if it's going to take you eight or nine years, you're going to save $3,000 for past your closing costs for five years. That starts to be some money then, and a little bit. It's not a ton of money either way.

But, yeah, get with Churchill and get a quote on a conventional. VA is the most expensive of the loans among FHA, VA, and conventional. The most expensive of them. Open phones at 888-825-5225. Ken Coleman, my co-host today. Quick on that break-even, Matthew, where are there, Ken? Yes. Well, you looked at me and I was like, Dave, you've got this one, but I'll throw a little something in there.

Because you know how strong I am on the money questions. Rick is in Fort Lauderdale. Hey, Rick, what's up? Not much. I'm doing great. It's great talking to you guys. I'm 62 years old. I'm back to duty military, and I'm retiring in two years.

And the retirement classes that I've gone to are pushing the survivor benefit plan, and I really don't think that I should participate in it. I just want to know your take on that. Well, thank you for your service. Okay, so the survivor benefit plan works like this, as you know. You take less per month, and then your wife gets it for her life. Right. Okay.

If you took the difference per month, you took the full benefit with no survivor, and took that extra amount that you're getting above what you would have been getting had you done the survivor and invest that, it won't be long before that investment is big enough to pay that difference. Right. In the interim, if you want to cover the difference, you could buy a term life insurance policy to make sure your wife has a survivor benefit from that, since you're not buying one by taking less money from the military. So how healthy are the two of you?

We're both the same age, 62, fairly healthy. Both of our families live in their 90s. And I think my net worth, negate even thinking about it. So what's your net worth? About 1.8. Okay. So if you die, she's okay. That's what I'm thinking.

So you take the big check. Right. You know, and she's okay if you die prematurely because she doesn't not get to eat because you didn't do the survivor benefit. Easily, she's okay with 1.8. You don't have to take out a term policy to cover the difference. Right. But the calculation works like this. Have you run the calculation both ways, what it's going to be?

Yes, sir. What's the difference between the two? Oh, gosh. It's quite substantial. Yeah. What's the difference between the two? Oh, gosh. It's quite substantial. Yeah. What's the difference? I mean, per month. Right now, based on what my retirement pay would be, it would be like $587 a month.

Difference. Yes. Yeah, okay. So if you run $600 a month into an investment, how long before you have enough to cover the whole stinking thing? Not long, really. That's $7,200 a year that's substantial right right and so you know that that's you're doing this correctly and uh but what what the people in the retirement class are the people they're speaking to most of them are broke and you you're not broke and so if you're broke and uninsurable you've got to do the survivor,

even though it's not as good a deal because mama's got to have somebody to eat with when you die. But mama, in your case, is in great shape because you have done a phenomenal job. That's two millionaires we've talked to. Yeah, she's going to be able to buy many pairs of shoes. You did that calculation quickly, did you? Again, I'm very sharp today. I'm at the top of my game, I think. So, but I mean, it's interesting that we're getting all these millionaire calls.

It is. Everyday millionaires. Chris Hogan's a happy man. Well, they're everywhere. They are. And I don't know, there's a thing in the air right now that says that you can't win in America. And you and I have seen for too many years that that is just not the case. This is a gentleman who served our country.

And as we saw with the Everyday Millionaire book in the study, teachers, everyday millionaires. So this idea that you can't win and you can't save money and you can't be a millionaire if you don't have this big glitzy glamorous job well it's just completely a myth or the only way you have wealth is to inherit it that's exactly right see if you can establish that lie in america the only way you have wealth is to inherit it you didn't earn it then that makes it easier to say take the money away from them but if you establish the truth that everybody earned their wealth, and by and large we're seeing 93% of the millionaires earn their wealth, then it makes the argument to take it away from them violent really quickly.

Yes. Because you're now stealing my stuff that I earned at the point of a gun from a government. Now your wealth redistribution crap melts down into violence pretty quick. Yeah. Because I'm violent about my stuff. As am I, especially when you earn it. This is the Dave Ramsey Solutions on the debt-free stage,

Phil and Olivia are with us. Hey, guys, how are you? What's up, Dave? Good, how are you? Welcome, welcome. Where do you guys live? San Diego, California. And all the way to Nashville to do a debt-free scream. Feel weird being here, a little different?

Yes. It's a wee bit different, yeah. Well, we're glad you're with us. How much have you paid off? We paid off $76,800. All right. How long did this take you? 18 months.

Way to go. And your range of income during that time? We started at 96 and we went all the way up to 160. Whoa. What do you all do for a living and how did that happen? I own my own pet care business. So I do dog walking, dog training, pet care. And it went bananas during COVID, huh?

Yep. Wow. I'm a little bit surprised people didn't take care of their own dogs because they were home anyway. Nope. Nope. They wanted you to do it. Yeah. Good.

Good for you. Very cool. So the pet business is booming in San Diego. What kind of debt was the $77,000? We were normal. We had four credit cards, two cars, and $41,000 in student loans. Wow. So what got you guys started on this 18 months ago? How'd you find us? Well, it's kind of a longer story than that, but my mom, Carol, she actually gave me her book when I was in my early 20s.

And I looked at it, and then it sat on the shelf. Pretty much a coaster on the coffee table. If it was even that. It was mostly in the bookshelf way far away. It was tucked way back in there. Yes. Don't want to look at it. I was getting my haircut from a friend, and she had mentioned that she had just gone through FPU with her husband.

And she kind of inspired me to get the book back out. And so I did, I read it and then I got really excited, you know, and then came to my wife and said, Hey, let's do FPU. So then, uh, we took the class. He convinced me to take the class. How did he, how did he talk you into doing that? No, he was like, we need to combine our incomes. You know, we're getting married and, um, you know, we'd need to get on the same page about money. And I knew I need, I'm on the spender. So I knew that I needed help in that area. So I agreed reluctantly, went to the class, stomping my feet, dragging your toes, completed the class. And I still wasn't really on board. And then, um, while we were at work, cause we both listened to podcasts while we're working, he sent me one of your podcasts. And I listened to my first debt-free scream and

almost cried and then realized that, wow, anybody could do this. So after that, I was on board. And then during this journey, I'm going to try not to cry, we both became sober. And once we became sober, it really got our debt snowball going. Wow. Good for you guys. Pretty amazing. So how long have you been sober? Two years.

Wow. Good for you. That's really, really incredible. Great job. That's more important than other stuff. Well done. Dave, I want to ask real quick, what do you all believe, looking back on the journey, what was the connection between getting out of debt and deciding to get clean?

Well, we realized that so much, or we were kind of like our, at the time, our budgets weren't together. So we were kind of lying to one another about what we were spending money on. And, you know, kind of like drinking and kind of going out and all that stuff kind of led to like making bad decisions. So especially, you know, eating out and everything else, like not talking about things with each other. And we just didn't communicate very well. And, like, really when we became sober, the communication thing was really the thing that worked and, like, combining our incomes and all that stuff

and, like, doing everything together. That was really the thing that kind of set it off for us. Wow. Yeah. A lot of mental health going on here. Oh, yeah. Between the two things working together. We see that a lot.

Discipline begets discipline. Yes. Self-control begets self-control. And so it's not unusual for us to have somebody that does a debt-free scheme that's also lost 30 pounds or whatever, you know. But you guys engaged in some really, really tough personal work during this time. But it sets your whole life free then yeah when you can when you can get control of these areas yes that you're just you were just out of control before which most people are by the way kind of normal yeah really really so

what do you tell people the key to getting out of debt is now that you did it um i would say i'm the spender so i would say saying no a lot and being okay with saying no um and definitely did you ever get used to it well now i'm so used to it that i don't know how to spend oh you went the other way you went the other direction okay all right um but um definitely intentionality um and just paying attention, working together. I know we had some budget fights here and there, but they made us stronger for sure. So I would say intentionality. So what was the biggest budget fight about? I don't know.

The worst one. What was that? I think it was mostly just, I think it was like. Probably self-care. Like I always wanted to be like, can I go get a facial? He's like, no, we're getting out of debt. No, it's just like, I mean, I think it was nothing really major. We never, like, fought over anything huge.

Like, but there was just times where it's just tension, you know. Like, I think I'm always really goal-oriented, and I want to get things done as fast as possible. And, like, I'm pushing her, you know, to go faster. I want to get a facial is different than self-care i mean you tell your wife you can't have self-care what kind of man does that but i want to have a facial no we're on a budget it's like that's when you put it under the self care that's a great phrase you can put a lot of crap under that exactly yeah she does it seems like a it seems like a more worthy next time i'm buying a gun i'm gonna tell sharon that's self

care it's a great point self-care how you's a great point. It's self-care. That's how you relieve tension. That's right. It's good for my soul. It's awesome. I love it. So, cool. So what advice do you have to couples who are struggling with that tension in the air over the budget?

How do you get through that? Because what you've been through is tough. Yeah. I think, honestly, like communicating with each other was huge. And then you really do have to give each other a lot of grace, first of all, and then give up a lot of what you want for the other person. And I think that was huge. But the thing is that makes it better is that it's difficult. But what makes it better is that you start to communicate with each other. And I think that's the thing, like, you know, through sobriety, you learn to have, you know, a lot of you have to look inside of yourself and see a lot of things that are wrong and try to change them.

Really, both those things working together have led to way better communication in our marriage. I think that's the thing that makes us happy. We can talk about anything and it's fine. There's nothing that's taboo anymore. I think that's the thing that helps us make it. That's very, very cool. How long have you all been married? Three and a half years now.

All right. I waited for him, babe. Did you notice. All right. I waited for him, Dave. Did you notice? Do what? She waited for me to say, yeah. Yeah. You got to get to a point where you know that. And he pulled it off.

There was a little bit of a question in the way he said it. I got three and a half years. Yeah, okay. But he got close enough that he gets points. Yeah, right? That's good. Very good. Well done.

Very well done, y'all. I'm very proud of you. So did you 12-step or what'd you do? Yes. Yeah, okay. Good. I thought I heard the language. Good. Very good. Well done. Very well done, y'all. Very proud of you. So did you 12-step or what'd you do? Yes. Yeah, okay. Good. I thought I heard the language. Good.

Very good. That's a successful program. Two successful programs you plugged into. It's all about steps, Dave. Baby steps and 12-steps. It's all about stepping going on here. Just check my steps for the day. Yeah, well done, y'all.

Very well done. And you brought your daughter with you? Yep. Lily's right here. And how old is she? She's going to be 10 on Saturday. All right well done, y'all. Very well done. And you brought your daughter with you? Yep. And how old is she? She's going to be 10 on Saturday. All right. Way to go, Lily. Well, welcome to Nashville. Has she been practicing a bit? Oh, yeah. You're her idol.

For sure. Oh, my gosh. Well, we need to work on that. All right. Phil and Olivia, Lily from San Diego. $77,000 paid off in 18 months, making $96,000 to $160,000, and sobriety during that time. I'm so proud of y'all.

Thank you. Count it down. Let's hear a great debt-free scream. Ready? Three, two, one. We're debt-free! Yeah! Way to go, Lilly.

You got it. Very, very good stuff. Oh, man. You know, we see that overlap into the marriages. We see the overlap in, you know, sobriety and weight loss and careers. That when they get, when folks get intentional about controlling one area of their lives and grabbing the variables, they change careers. That's right.

A number of times. I mean, look at what their income did. Oh, a huge jump. When you change the way you think, what you have seen, folks, in this story is they changed the way they thought about finances. They thought it was possible. I love that she said she listened to a podcast. She heard a debt-free scream, and she said anybody can do this.

That's a change in mindset. When we change what we think, we change what we act. You cannot change the way you act until you change the way you think. When you can see this baby step leads to this baby step, and I can do this, and you begin to experience the momentum and that debt snowball, then it changes your perspective on everything. You can get sober. You can get a better job. It really is beautiful to see. Yeah, they're a great looking couple. And way to go, Lily. You're a great debt-free screamer.

Good stuff. Those people are heroes right there, man. They just changed their whole lives. That's so impressive. Incredible, and the impact they're going to have. Unbelievable. This is the Dave Ramsey Show. So the debt-free screams on YouTube were the thing that turned the young lady around, Olivia, just a minute ago. But going through Financial Peace University laid the foundation for them to be able to do the work. Ramsey Plus is one membership for a year. You can do a free trial on it. You get Financial Peace University, the class that teaches you how to handle money the right way, not only getting out of debt and out of budget, but building wealth, being outrageously generous, learning how to live like no one else so later you can live and give like no one else.

You get the premium version of every dollar. You get the Baby Steps Tracker app, and you don't have to figure out your money problems alone. You're plugged into communities. You've got access to financial coaches. We are going to be all up in your business. We're going to be walking with you, holding your hand, kicking your butt, whatever it takes to get you to move along.

Go to DaveRamsey.com slash RamseyPlus for the free trial. DaveRamsey.com slash RamseyPlus. Joel is with us in Massachusetts. Hey, Joel, how are you? Good afternoon, Dave. How are you? Good afternoon, Dave. How are you? Better than I deserve. What's up?

Thanks for taking my call. So my wife and I, we just accepted an offer on investment property that we have. And after taxes and commission and everything, we're going to take home $130,000. Cool. Yeah, so my question is, what do I do with that? And the situation is that we have no debt besides our primary residence mortgage, which is $270,000 in a 30-year conventional, and another investment property, which is $150,000 in a 30-year conventional. So I just obviously want to completely get out of debt and pay those off as fast as possible, and I'm not sure the best way to go about that.

So what's your household income? Annually, about $190,000 between the two of us, but it's gross, but it fluctuates. Got any money that's not in retirement other than the emergency fund? Yes, about $60,000 in a total stock market index fund. I think you're going to pay off your personal residence with that and your proceeds. So that would leave, so we owe $ so we owe 270 on the personal residence oh it doesn't quite get it okay yeah not quite yep yeah but you make 200 a year so you're done in two more years though yeah i'm throwing the total i'm throwing the stock fund and the proceeds at my

personal residence and i'm gonna get my house paid off in 18 24 months and then i'm gonna reach over and pay off the uh the uh other one you can go the other way the way i'm analyzing this and you can decide how you want to do it then joel is i'm looking at it from a risk management perspective meaning if the if the world went crazy oh wait it just did yeah and i ended up losing something one of these two properties because i couldn't pay the bill on one of them but i could on the other one or i had one of them paid for and one wasn't so i ended up losing it which one would i want to lose will my you know obviously i'd like to have my home protected from weird world circumstances and then i'd go over and i'd pay

off the other so i the only reason i'm diving on the ball for your home is i'd like to get it paid off from a risk management perspective but if you go the other way um you know it's not the end of the world okay that makes the other thing about going the other way is it would free that the property is rented and makes money so it would free up or provide another approximately twelve thousand dollars in cash flow per year right yeah and that's going to help on the other but you're still you still got a lot of money to go so you know if i cash out uh the the index fund completely and some i'd have some to throw at your residence and pay off the rental you can go that route the only reason i would go the other way if they were closer or i

could get your house completely paid off it'd be a slam dunk for me to move on your house first just because something happens inside of you when your home doesn't have a payment. We don't perceive that we're, it's like having a low-grade backache. You don't even think about it anymore. You're just used to a mortgage, and when you get rid of it, you realize you were carrying around this low-grade backache. It's like you have this 30-pound bum dumbbell in your pocket. No question. I understood what you said. So with his other scenario, if he pays off the rental and he gets the extra $12,000 a year, it's throwing off in profit and he's debt-free on that. If something were to happen, does he still have that same backup plan, assuming he could live in the rental for a while? Yeah, you can move to the rental.

Yeah, so it still gives him that. That's less than ideal if you had the pandemic gone sideways here or whatever, that kind of stuff so and you know it's interesting that i used to you know have people go well i mean yeah but these worst case scenarios don't happen and now that i got 2020 in my back pocket i can just pull that out and use it whenever i want right it's so true don't tell me about worst case scenarios never happened you couldn't even spell pandemic 12 months ago oh boy isn't that the truth and all of a sudden now you got this thing so i mean it truly is i was doing a talk for the entree leaders the other day that were in town for that event and uh you're small business guys i told them look when you're

out of that and i read the three little pigs to them and i'm like when you're out of that and you have your emergency fund and the big bad wolf when you're out of debt and you have your emergency fund and the big bad wolf comes, you're the third pig. And I think I'm going to do T-shirts, be the third pig. I like that. Because we all know what the third pig was. He's the one in what kind of house? It was a stone.

It was a brick house. A brick house. And he huffed and he puffed, and pandemic couldn't get in, right? And 2008 couldn't get in, and 9-11 couldn't get in right and 2008 couldn't get in and 9-11 couldn't get in and whatever other scenario where the world is a falling a freaking apart in your life or culturally they can't get in be the third pick and that's all i'm doing here with this guy is the same exact thing having your home paid for you're the third pick is you know when when crap comes up yep one less thing to worry about what forrest gump said you know up, one less thing to worry about. What Forrest Gump said, you know, that's one less thing to worry about.

It's true. And so, you know, when all this stuff hit, the stress that was on me had nothing to do with Sharon and I being okay. It was all on just protecting the team here and making sure this place stayed open because the families here depend on us to eat. That was the stress that we had. But it wasn't like, oh, we're going to lose our home. Oh, we're not going to have food. Oh, we're not going to have food. Oh, we're not going to have whatever. We have whatever we want still.

Anytime we wanted it, as long as you could find some way to get it in the middle of a pandemic shutdown. And that's the key word, shutdown. Folks, I don't care where you're at on this whole thing. But what we can all agree on is that we didn't know what was really happening. No official really did. Even the health officials and the scientists we didn't know what was really happening. No official really did. Even the health officials and the scientists really didn't know what was going on. Oh, that's proven. And what we saw is that government has the power to artificially shut down an economy instantly.

Instantly. It was almost like hitting a red button and the roller coaster stopped in the middle of the tracks. And we have to be really wary of that in the future because this was an artificial shutdown not just in the united states we're talking about all around the globe and you're seeing governments in europe now go to a second shutdown and and so we have to understand that what dave's saying here you can't control what a governor or a mayor or a president depending on the laws of a nation or a health department official yeah you can't control that and they can artificially take your

ability away to earn and so if you're cash for if you're debt free and you're cash uh rich and ready to go and you can uh you can pivot with whatever pandemic is coming your way that's the place to be and if this is not the wake-up call i don't know what's going to wake up some people but this is why we have to be wary of of government and artificial shutdowns because you can't control what they do well it's you know you have to do the hard work it's harder work to build the brick house than it was the straw house or the wood house of sticks. They went up quicker. They were cheaper.

They were easier. But there's no shortcut to any place that's worth going. And you've got to do the hard work. And when you do the hard work in your life and you're financially sober and you're sober and you've got a career track that's working, you've got the skills that are marketable, you just give yourself options when times are good and you give yourself options when times are bad this is the only set of principles in money or life that work in both types yeah that's true the borrowing good debt only works in good times. There is no good debt in bad times. You know, when the tide goes out, Warren Buffett said, you can tell it was skinny dipping.

Your principles are revealed to be lacking. And that's what they, you know, stupid is unveiled. And you can see it real clearly. And it's causing a bunch of stress and a bunch of pain. Never again, people. Never again. Be the third pig. This is The Dave Ramsey Show.

This is James Childs, producer of The Dave Ramsey Show. Once again, you made The Dave Ramsey Show one of the top four most popular podcasts last year. To get your daily dose of motivation and inspiration from the Ramsey Network, subscribe or follow today wherever you listen to podcasts.