The Ramsey Show - App - What Do I Do With $158,000 of Gifted Stocks? (Hour 3)

Episode Date: October 28, 2019

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Music Music 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. Thank you for joining us. Open phones at 888-825-5225. That's 888-825-5225. Emily is starting off this hour in Texas. Hi, Emily. How are you?

I'm good. Thank you. Thanks for taking my call. Sure. I had a question about my husband and I just finished paying off his school loans this month. Great. And then what we have left is $50,000 in my law school loans. We are about to have our second child. Congratulations. Thank you. Thank you. He's about to come into about $8,000 from working

from a second side job, which happens to be the amount with a high deductible health plan. My question is, should we use that $8,000 to pay outright for our hospital and OB costs or should we put that $8,000 to my student loan that is compounding interest every day?

And then turn around and finance your OB costs? So our hospital has a, like with our first son, I did monthly payments to the hospital. There were zero interest. I was just on a payment plan with the hospital. Yeah, here's what I would do. I would call them up and ask them what the discount is for paying ahead. Okay. And take the discount and go ahead and pay it.

Okay. They'll give you a discount. Okay. And it'll be more than the interest on your student loans, by the way. All right. Hey, congratulations. Thank you. We're working.

It's awesome stuff. You're doing a great job. Open phones at 888-825-5225. You jump in, we'll talk about your life and your money. Well, we're coming to Sacramento to do one of our smart conferences, our first time to do a smart conference there in Northern California area, and really looking forward to it. If you don't know what a smart conference is, it is an all-day-long event. And if you come and you stay there the whole day and you write down the notes and stuff, when you leave, you'll be smart.

That's why we call it the smart conference. Seriously, we talk about every area of your life. Dr. Les Parrott, some of the top minds and writers and thought leaders in the world in these spaces are on that stage all day long. Marriage with Dr. Les Parrott. Parenting with Dr. Meg Meeker, wrote Strong Fathers, Strong Daughters. These are two of my favorite people on the planet. I just love them. And some marriage and parenting.

Chris Hogan, of course, will be there, and you know what he'll be talking about? Millionaires. And Ken Coleman will be there, and you know what he'll be talking about? Yeah, we're talking about your career and how important it is to do that well. So careers, millionaires, parenting, money, marriage. Anthony O'Neill will be there, and you know what he'll be talking about? Teenagers, because he talks to teenagers all the time and how you can talk to your teenagers john o'leary will be their leadership expert if you've never heard john's story oh my goodness

world class and one of my favorite speakers on the planet is patsy claremont she'll be there and she's going to be talking about fear and And yeah, a lot of people, well, everyone, everyone, all of us struggle at some point, at some level with fear. It's a real deal. And I'll close out the day, and we're going to have a blast. It's going to be an incredible day. You would pay this ticket price to hear any one of these people, $59. I mean, come on, $59.

That's just a deal. So the only problem is it's almost sold out. There's just a few seats left. A little over 1,000 seats left in this entire arena. And so if you want a seat, I suggest you get in there very, very, very quickly and get your tickets at DaveRamsey.com or call the Ramsey concierge team at 888-22-PIECE, 888-227-3223. Brian's with us in Tennessee.

Hey, Brian, how are you? I'm doing well, sir, and yourself? Better than I deserve. What's up? Well, some background. I am seven years post-bankruptcy because it turns out I could not pay my bills and my parents' bills at the same time. Not on the salary I was making at that time. Why were you paying your parents' bills?

Because Dad lost over $500,000 in the crash of 2008 when it was stripped out of his retirement fund. So why were you paying your parents' bills? I would very much like them to have a roof over their head but it bankrupted you yes it did okay yes it did all right now uh i i guilted myself into it by telling myself i know there's going to come a time where i would give everything i have see them one more more time. And I didn't want to have to remember not helping them when I could, even if it cost. But I'm in a better place now. I have more than doubled my salary.

I have $40,000 in my retirement fund that I am working on slowly. I have $30,000 in my checking account. My house value, I bought at 130 and is now, I'm being offered 230 for it. Now, I have two roommates. They pay most of my current mortgage. However, this is a starter house and I crammed into a 10 by 10 and they have offered to move out. So what I am doing is I am selling my house, entering a contract to buy a new house using the proceeds as the down payment. 20% down payment of the house is going to be about $54,000, $60,000 after a closing cost and everything is added into it. So I'll be walking away after this current mortgage is paid off,

probably about an additional $24,000 to $25,000 that I was going to put into my bank account. I have no other outstanding debts. My car is paid off, no credit card bill, nothing. It's literally just the mortgage at this point in time and all the money i send north to uh keep a roof over my parents head so they're still not supporting themselves they can't why dad is 74 and is currently dying of cancer he has uh it's being treated they don't know how long he'll hold on. But he's been trying to get a job for the past 10 years. Even Walmart turned him down because nobody wanted to hire him as a 74-year-old.

He's got a closed traumatic brain injury from his service in the military. He has Social Security, but that's it. Your mom? Housemaker. Okay. And she has a side hustle where she makes quilts to help with. So they have a Social Security income of how much? I want to say perhaps $2,500 to $3,000.

How much are you choosing to supplement this? Well, over the past, since my bankruptcy, over the past 10 years, I've given them $65,000. I'm sorry, but if I were in your situation, I would put mom and dad on a budget, and it would be pretty close to $2,500 a month. And so you can do whatever you want to do. Obviously, you're going to do whatever you're going to do. But there doesn't sound like there's an end to this except their death because they're not ever choosing to be sustainable and put themselves in a sustainable situation.

And they've never said the word no folks let's cut through the bull interest rates are exceptionally low so you're missing out if you have not called churchill mortgage to see if you can save money on your home loan. Lots of other companies are out there claiming great deals, but don't get lured by slick advertisements. No-cost refinance offers do not mean they're free. Churchill Mortgage has a no-bull refinance. This means there are no hidden fees. They will shoot straight with you. Yes, Churchill can offer loans with no closing costs, different down payment options, or, of course, a traditional refinance. The key difference is you can trust my friends at Churchill to let you know what you're getting up front so you can make the smartest choice and save the most money. Go to ChurchillMortgage.com. Do it today while rates are low.

This is a paid advertisement. NMLS ID 1591. NMLSconsumeraccess.org. Equal housing lender. 761 Old Hickory Boulevard, Brentwood, Tennessee 37027. Nadia is with us in Florida. Hi, Nadia. How are you? Hi, Dave.

How are you? Better than I deserve. What's up? I'm great. So basically my question is, my husband and I, we bank with USAA. And of course, living in Miami, we don't have a brick and mortar store we can walk into to pull out cash in order to do a cash envelope system. I was wondering if you had any advice on how to withdraw large amounts of money at a time without having to go to ATM with a $500 limit,

and typically you have to call your bank and ask them to raise it. Do you think I should just switch to a local credit union, or have you ever run across how people deal with USA Bank? I probably would just open another account. You don't have to switch your entire banking operation. I'd just open another account at a local credit union and transfer some money over there every so often. And then you can run over there and do your cash withdrawals.

Just have a checking account. Most credit unions have free checking. And so, I mean, you can just pop a web transfer. It's not hard at all with your web, using the Internet, obviously, and so, I mean, you can just pop a web transfer. It's not hard at all with your web, using the Internet, obviously, to transfer the money from one account to another, even within the credit union system, and then turn it into cash. I don't know.

I assume there's not a way to get through the $500 limit on an ATM, but I don't know. I've never bothered to try. And so, because I've always had a click and mortar situation or a brick and mortar situation with a bank, so I honestly don't know what the limitations are on that. So that would be the only way I know how to solve it off the top of my head. Lane is with us in Kansas. Hi, Lane.

Welcome to the Dave Ramsey Show. Oh, Dave, thank you for making my day. This is great. Well, I'm honored to talk to you. How can I help? I am a 66-year-old widow. I've been a widow for eight years. And I am getting ready to sell my house that I have lived in for 30 years.

I always thought that capital gains was $500,000, and I just realized that it's $250,000 for a single person. And I am going to end up making quite a lot of money on my house. I am wondering, do I rent or do I buy next? What would you recommend your mother should do next? Well, it would be more like my sister. I'm 59, so okay. Think of me as the mother, though, because I'm the mother that needs help. My husband is a CPA, and these decisions were easy to make when I had him helping me out,

but this is not so easy by myself. So what is your basis? What did you pay for the property? Paid about $300 for it, put in around $100, and it should sell about $850. Okay. All right. And so you'd have a $400,000 gain, $250,000 of which is excluded, and then you'd be at $150,000 at 15%.

So it's going to cost you about $20,000 in taxes is all. I don't want to pay the government anything. I don't have to pay the government anything. I don't have to pay them. I don't either, but I don't know of any other options other than just keeping this property. And it's not much of a rental property. It's too expensive. No, so didn't it used to be that if you reinvested in more real estate, you didn't have to pay the taxes? Right. That's called a 1031 tax deferred exchange and

that's from one rental property to another not from a personal residence to a rental that's not a tax okay you're not you've not been renting out your home now you could hypothetically move out of your house rent it for two years and then do that i wouldn't go through all that and let somebody possibly tear up my house for $20,000. Right. Okay. So I'm probably just going to pay the tax and let it go. What are you going to buy? What price range are you buying at?

I haven't decided any of that. I was really thinking I just wanted to rent or condo. The house that I'm taking care of is rather cumbersome for me to take care of. And I'm ready to downsize and I'm ready to be done with the yard and I'm ready to be done with a lot of the things that I've been taking care of by myself. So I don't know. The only thing I have done is I have interviewed realtors and I found an ELP that I really like. But besides that, I have not made any steps forward. I'm hoping to sell a house in the spring, and I don't know what I'm doing.

That's perfect. It sounds to me like you do know what you're doing. You've got it really dialed in. You've thought this through with a lot of wisdom. So what would you recommend? Would you recommend buying something or renting? I would buy something. And what price range would you recommend? Would you recommend buying something or renting? I would buy something. And what price range would you buy in?

Have you looked at condos that would fill your need that are what you want? No. Okay. I have not. Well, is this property paid for? Yes. Okay. Has been for years.

Okay. Well, I would just find a condo and pay cash for it that's less than what you've sold. Okay. And, you know, and just enjoy it. Okay. And the reason is that at 68, there's a high likelihood you're going to live 20, 25 years more. And letting rent go up every year on you for 20, 25 years does not sound like a good plan to me. It destabilizes your life.

And I like the stability of the paid-for house sitting under you giving you peace. The paid-for condo sitting under you giving you peace. So am I too young to move into a senior facility that's your decision you sound to me like you are but it's up to you well i've got i've got friends that are younger than i've got friends that are younger than you that moved in just because they love the idea of the way the community worked and they didn't see it as like an old folks home or something they saw it as a place to get a whole bunch of buddies around them and they didn't see it as like an old folks home or something they saw it as a place to get a whole bunch of buddies around them and they play golf and they play bridge and they do all that and they have a blast i've got friends that have done that um i mean it's it's not quite as it's a

lot more some of the communities are a lot more active than others depending on how they're structured and so forth so that's what i'd look for i don't think you need to be uh sitting on the back portion of rock or knitting i think you're still going pretty hard i think i am too and when i think about i would like to be a place that has a social life because right now i that that doesn't happen a whole lot because i'm in a big house by myself well look at look at it be the only ones i would do would be a community a that has the social and the active. The population is active in there, and it would be a traditional ownership model. I don't think you need to buy into something where you're giving up tons of equity and they take care of you and you don't need to do all that stuff

unless you're just really super concerned about it. But I would just – a nice condo in a community that is focusing on active seniors sure that could be really fun for you okay because it's going to be a little hard moving out of there you've been there 30 years i know it's a long time and to move out by myself to sell a house by myself and everything. This is major. I realize it is. I think you're very wise. I find it very overwhelming and scary. Yeah, but you're gathering information,

and the more information you have gathered, the less scary it is, isn't it? Yes. Yeah, and you're very wise to do that. You're doing this at a slow, steady pace. You're not impulsing and dramatic, and I'm going to sell it Friday. You're not doing that. You're walking into this steadily, dramatic, and I'm going to sell it Friday. You're not doing that. You're walking into this steadily, and you're thinking it through,

and you're looking at the emotions of this is where we lived all those years when we were married. This is where we did all this. And any time you're in a place 30 years, it's pretty deep roots. But that doesn't mean you have to live there forever. It is just a house at the end of the day. And I think you're very wise. Everything you've told me sounds very very smart and just take your time and steadily work through uh gathering up all

the options getting very comfortable with all the processes and dealing with the emotions that are have to be there in this situation hey thanks for the call it's a joy to talk to you. Open phones at 888-825-5225. You jump in, we'll talk about your life and your money. This is The Dave Ramsey Show. Business leaders, if you're not using LinkedIn Jobs, you are missing out. Our Ramsey Solutions Company page on LinkedIn has over 100,000 followers. That's over 100,000 potential like-minded people our team communicates our current openings to we also post on linkedin jobs because we know the right person will have an impact on our company for years to come and linkedin jobs matches the right person with the right job it's no wonder a hire is made every

eight seconds on linkedin and over 600 million members visit LinkedIn to make connections, learn and grow as professionals, and discover new job opportunities. In fact, LinkedIn members add 15 new skills to their profiles and apply to 35 job posts every two seconds. Get started today with LinkedIn Jobs and get $50 off your first job post. Visit LinkedIn.com slash Ramsey. Terms and conditions apply. Nicole is with us in Washington. Hi, Nicole.

Welcome to the Dave Ramsey Show. Hi, Dave. Thanks for taking my call. Sure. What's up? Hi. So my parents have decided to be extremely generous and have gifted me $158,000 in stocks. Wow. They're a mixture. Yeah,000 in stocks. Wow. Their mixture.

Yeah, I know. Very nice. So I want to do the right thing with it. It's about half Microsoft, half Contra Fund, I think is the name of them. And I'm wondering what to do with the money. I have no debt. I have a pretty good salary. I fund my 401k and my Roth. And then I have some additional mutual funds as well.

I'm thinking about buying a house. However, I know that you teach to have a 15-year fixed-rate mortgage and put 20% down. However, that would be more than a quarter of my take-home pay for my mortgage payment. So would you suggest putting more than 20% down and using that gifted stock money or maybe some of my other mutual fund money in order to have a larger down payment to get down the monthly mortgage payment? It sounds like you have no use for this money. I would use it all on the house. Okay.

Okay. And then let's get about the business of paying off the house as your last step. You're out of debt. You have an emergency fund. You're funding retirement. And let's get the house paid off. Okay. Sounds good to me.

Now, let's stop a second. Your parents have gotten legal advice and tax advice on this? Yeah, they have. They talked to their financial person. They talked to my financial person. They're doing a unified estate tax credit, right? I don't know the answer to that. Unified estate tax credit, I'm not sure.

It's the only way they can transfer $150,000 to you without paying taxes, a big but gift tax on it. Okay. They would have to pay a gift tax? If they don't use what I just said, they will pay a huge gift tax on this. Okay. I think they've avoided that because we did go around and make sure that we were doing this the most economical way. And then when you sell this stuff, you will pay capital gains tax on anything over their basis,

meaning what they paid for this $158,000, not what it's worth, but what they paid for it, is their basis. The difference in that and $158,000 is taxable to you when you sell it. Okay. Do you know what the tax rate is on that? 15%. Okay. So I just need to make sure to put aside that amount. Yeah.

Do you know what the basis is in these funds? I don't. I have the documents at home. Okay. Okay. Yeah. And so let's just pretend it was. It's had it for 25 years or so. Yeah.

So if it was $58,000 and the gain is $100,000. Mm-hmm. And the gain would be taxable at 15%. It costs you $15,000 as an example. Okay. Okay. Got it. You can see your tax professional, your financial professional,

to help you make sure you get that all right. But net of taxes, I would throw it all at this house, and then I'd get the house paid off as fast as I can. What is your income? $92,500. That's before tax. How old are you? 32.

Well done. You are killing it. Thank you. And they obviously have killed it. I was raised right. Yeah, what a great legacy. My dad reminds me of you. Yeah. Well, I'm honored.

That's very cool because obviously he's done a great job raising you, number one, and number two, done a great job with the money. So it's a compliment to be set up if I'm anything like him. That's awesome. Open phones at 888-825-5225. And up next is going to be Darrell in Texas. Hey, Darrell, welcome to the Dave Ramsey Show. How you doing? How you doing there, Big Dave? Better than I deserve, sir. How are you?

Good to talk to you. About six months ago, we were bringing in the money. My wife was paying out all the money, and we didn't know where anything was going. And I got tired of her telling me, Dave Ramsey, Dave Ramsey. So we took FPU, and we have every dollar, and we're doing it. And it's actually bringing us closer together. But we have one issue, and that's on my 401K from my employer. I'm 54, and my wife is 60. And we plan on working about six to seven more years. And we have a 27 K home equity line of credit that we're trying to pay off. And the only other thing besides that is 30 K on the house.

Should I keep contributing to my 401k, which matches up to 8%, or should I cancel that altogether and work on my home equity line of credit? Your household income is what? $140,000. Okay. Do you remember this part in the financial peace class? I think I do. Okay.

Don't contribute. Yeah, temporarily until you knock out the home equity loan, and then we're going to get to baby step three with a fully funded emergency fund, and then four is we're going to be putting 15% in, so we'll be getting the match at that point. Five is kids' college. Sounds like that's probably already taken care of is it yeah kids are kids got jobs okay i'm doing good good good and so we skip five and we get on to

six and that's pay off that little 30 000 on our mortgage see the whole thing is going to lean into when you get to your golden years you need to have two things and you need to have both of them a paid for house and a pile of money. And the shortest path there is what we just outlined. So I'm not going to be losing as much money in the long run if I cancel my 401k contract? Right. Because, not because of the math of the, we're talking about, you said you make what, 100 and something, 100 and what? 140 household, I make 100 okay so 140 household pays off 27 000 in what six months yeah we're working on it we're trying to get there well i mean six months for 27 000 and 140 my god and so we're really not talking about stopping your 401k for very long

yeah the thing is what you what you pay attention to is what you went at and the reason you got married was you paid attention to her and you won and if you hadn't paid attention to her what you focus on is what you win at and the problem is most people focus on you know bachelor or some other stupid butt something on tv instead of focusing on their own lives and making sure that they win and so you're in the process of focusing on straightening up your money getting out of debt why are we getting out of debt so we can build wealth why so we can change our family tree and retire with dignity and be outrageously generous, living like no one else so later we live like no one else.

So, yeah, that's exactly what you do, sir. Honor to talk to you. Thank you for calling in. Open phones at 888-825-5225. Jared is on Facebook. Dave, when applying for term life insurance, do you recommend having a rider that pays your premiums if you become disabled? No. Your premiums aren't that much and the rider is ridiculous it's very expensive disability insurance in terms of what you're actually getting in insurance for what you pay the insurance amount you're getting is the amount of your premium which isn't spit and with what

you're paying for it it's the most expensive disability insurance on the planet. So you do need long-term disability insurance, and you do need an emergency fund, and you do need to be getting out of debt and building wealth so these things matter less and less and less. But term life insurance premiums, when you go to zanderinsurance.com and you just get a quote, a simple, easy quote on your situation, you find it's the cost of a pizza. That's what you're buying insurance.

I'm going to buy insurance for the cost of a pizza. No, I wouldn't do that. And I don't do return of premium riders either, where if the insurance runs out before you die, we'll give you all your premiums back and we'll just charge you a little extra. Well, mathematically, if you'd have taken that little extra and invested it, you would have had more than your premiums regardless of whether you die. That's all he did.

It's just a gimmick. Gimmick, gimmick, gimmick, gimmick. Don't do return of premiums don't do saving inside of life insurance ever and don't do waiver of premium for disability it's just gimmicks it's all nickel and dime stuff but it's a waste of money good question thank you for joining us this This is The Dave Ramsey Show. our scripture of the day james 122 do not merely listen to the word and so deceive yourselves do what it says one of my pastor buddies says don't let the world teach you theology.

It's a good idea. Andrew Carnegie says, the older I get, the less I listen to what people say, and the more I look at what they do. And, you know, when you watch what they do, the other thing that happens, if you begin to develop some wisdom, you'll start to see a pattern evolve. And then you can predict what they're going to do because they have a pattern of behaviors. If someone is saying over and over and over again that they're not crazy, that's usually an indication that they're crazy.

I'm not crazy. you are you just confirmed it and you're acting crazy too and among those crazy behaviors is saying you're not crazy and if someone tells you how broke they are and they kind of do it with a little bit of a southern drawl, an all shucks kind of movement. It probably means they're a multimillionaire. You can watch for these patterns. They will evolve. People's patterns evolve. They become predictable. And sometimes it's sad.

You're predicting sadness and hard times and other times you have this this person is predictable they have integrity in this situation they will always do the right thing and they seem to have an idea what the right thing is too it patterns are predictable they make the uh they make the world go around all right paul is with us in wisconsin hey paul how are you good dave good afternoon afternoon how are you better than i deserve what's up excellent well a little off track so that's why i'm calling you um salary of 120 to 130 and i have the thousand emergency fund, six months of expenses covered, a large sum in my 401k at about $725,000 plus a pension.

That'll give me $1,074 at 2033. 51, college is going to be cash flowed. One kid's paying for college on his own with a little assistance from us, depending on grades. I got five grand in credit card debt, 14,000 on a HELOC, a 15-year fixed loan

with 111 left on the balance. And should I treat, my question is, should I treat that HELOC, a $14K, as part of the debt snowball? Yes. It's less than half your annual income. And part of the debt snowball, too, is you don't have your three to six months. You only have $1,000. So you don't have your three to six months. You only have $1,000. So how much is in your three to six months?

$18,000. Oh, okay. Good. You're debt-free today. Yeah. Pay off the HELOC and pay off the credit card. Cut up the credit card. Make sure you're on a budget.

I'm guessing you're making more than six figures. Yep. And these are just cleaning up details. So very, very quickly then, your next step is to rebuild a fully funded emergency fund of three to six months of expenses. What's your household income? It falls between $120,000 and $130,000. Oh, you said that. You said that.

I'm sorry. I said that earlier. The numbers you gave me, I was thinking $200,000. Okay. You've done really well. Done a good job okay so how quick can you put 20 25 000 in that emergency fund if we clean you out today you clean me out today it's probably gonna take me well because ellen kent's probably taking about six months yep that's what i'm thinking that's what i'm thinking and then you got your foundation laid you're debt debt-free but the house.

You're putting 15% away of your household income. And anything else we can squeeze out of the budget beyond 15% going into retirement, your retirement's done very, very well. And you've got, you said, somewhere 50 grand in there, right? $725 right now. What's your house worth? The house is actually worth $280,000, and yeah okay that's done it so my plan a goal is to try to pay that off in five years yeah and your net worth is already a million yeah that's what i kind of roughly calculated yeah you're um

did you start with anything or did you inherit money or how did you get this money? No, it's all old school, start from nothing. I came from very little money and just kind of built on it. You've done a really good job. One thing led to another. Yeah, you've done a really good job. All I'm giving you is a little bit of fine-tuning. Yeah, like I said, like I mentioned earlier, it was off track. I got a couple things here.

I'm like, okay, I've got to run this by Dave. It was just off track, but it wasn't like off the rails. It was more like we made a wrong turn and we're just going to get back up on the interstate. I mean, it's just a detail or two here. Do I have time for one more question? You do. Okay, great. My company just got bought out, acquired by a new parent company.

So my pension that I have in tech is a frozen pension. And the value of it is as of 2033, it's in a single life annuity. At 2033, I can start taking out a full amount, which would be $1,074 a month. Would it be best to take that lump sum out of that single-family annuity and move it elsewhere? Okay. Yeah, you'll make – if you didn't, you can roll that to an IRA, a direct transfer rollover into an IRA and some good mutual funds,

and you'll make more on that principle that will give you more in 2033 than the $1,000 you were going to get. Okay, so a direct rollover with mutual funds. Okay, and since I'm 51, would that be like moderate mutual funds or aggressive mutual funds? The only thing I do is I put mine, and I'm 59, and mine are invested like I teach here on the radio, and that's a fourth in growth, a fourth in growth and income,

a fourth in aggressive growth, and a fourth in international. And I pick long track record mutual funds that have been open 10 years plus, usually 20 years plus, that have long, strong rates of deal. And when you roll that over and you pull that out of that trapped thing and that pension actually starts counting in your net worth then you're substantially over a million dollar net worth at that point so very well done sir very well done yeah these are just fine tuning the other thing is i'm not sure exactly what happens with that annuity with it structured inside that pension my guess is it dies with you and you certainly don't want that to happen

all that money dies when you die so rolling it protects it from that if it is susceptible to that and i don't know whether it is or not mike is with us mike is in north carolina hey mike how are you hi dave thanks for taking my call my pleasure how can i help uh well me and my wife are getting ready to move here in about a month and a half down to Florida and be pursuing my master's down there. And our expenses are going to go down significantly, but our income is going to go up. And so we're just trying to game plan ratios and things to do with the extra disposable income. Okay.

Are you out of debt? We are. We're out of debt other than our house. We're going to sell our home, obviously, when we move. But other than that. You're going to buy a house there? We're not. We're only going to be down there for two years.

What's your master's in? We're not going to have um mba oh good for you okay fine okay and so um well if you have an emergency fund in place you're completely debt free um you know you're going to buy a house again someday uh the only thing you right you can do whatever you want to do with it i'd probably just start throwing some of it maybe in something simple like an S&P Index fund and just let it grow knowing that I'm either going to use it for investments or I'm going to use it to pay cash for a house when we land after the master's is finished.

Yeah, that was our question about the house. We're military, which is why we're only going to be down there for the two years. And we're not planning on buying a house until I get out, which would be about eight years, maybe seven and a half at the minimum. Yeah, build a house, build a mutual fund that on the outside of the file you write the word house. That starts to look like paying cash for a house at the eight-year mark. And I think you'll be able to do that pretty easily. And that's about all you've got left. Hey, thank you for your service.

Sounds like you're doing very well. Congratulations. That puts this hour of the Dave Ramsey Show in the books. Our thanks to James Childs, our producer, Kelly Daniel, our associate producer and phone screener. I am Dave Ramsey, your host. We'll be back with you before you know it. In the meantime, remember, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus.

Hey guys, this is Blake Thompson, Senior Executive Producer of The Dave Ramsey Show. Did you know over 15 million people listen to The Dave Ramsey Show every week? And a lot of those people listen to one of over 600 radio stations across the country. To find a station near you, head to Dave Ramsey.com slash show.