The Ramsey Show - App - What Should I Do With Over $1 Million in Savings? (Hour 1)

Episode Date: August 4, 2021

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Live from the headquarters of Ramsey Solutions, broadcasting from the Dollar Car Rental Studios, it's the 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. Number one best-selling author, Ramsey personality, Christy Wright, is my co-host today. Open phones as we take your calls about your life and your money. The phone number is 888-825-5225.

That's 888-825-5225. A couple weeks ago, we launched the pre-sale on her new book, Take Back Your Time, The Guilt-Free Guide to Balanced Living. You've got to check it out. And guess what? We got in the books today. So we're ready to ship when September 14th occurs, which is the actual street date on the book. But they're in the warehouse. We're actually touching and looking at real books, not mock-ups, not advanced reader copies.

This is the real thing. It's the real thing. It came in today. Tyler surprised me with it. And I walked around the corner. I was like, oh, myups, not advanced reader copies. This is the real thing. It's the real thing. It came in today. Tyler surprised me with it, and I walked around the corner. I was like, oh, my gosh, now it's real. It's in my hands. I can't wait to take one home and show my husband. There you go.

It's real. Well, this is your second one. So it's like, you know, I mean, doing a book is a lot of work. It takes a year. In some ways, it's more trouble than having a kid. Well, and it's funny because the process is so lonely. You know, it's you and a computer and Microsoft Word documents, and then the team through editing and design and layout makes it something so beautiful like this.

Gosh, it just brings it to life. Yeah, good stuff. Take back your time. The Guilt-Free Guide to Life Balance, you can get it on pre-sale. We launched Ken Coleman's book on Monday on pre-sale as well, From Paycheck to Purpose. Both of those are $20. They're both at RamseySolutions.com, and they both include an extra $100 worth of goodies, meaning all kinds of extra add-ons like the e-book and the audio book and other things

as well. Now, you did a live stream last week on this subject. How'd it go? It was great. It was awesome. We talked about the source of why you feel out of balance because one of the things I found, Dave, is that we don't know what balance is. We just know we don't have it.

And so I wanted to peel away the layers and say, okay, let's talk about the four main causes of why you feel out of balance in the first place, which I unpack in the book. And we talked about that and talked about what to do about it. So it was a great live session. I think the replay is available, by the way, on YouTube or Facebook if anybody wants to watch that from last Wednesday. Oh, okay. Cool.

Perfect. Good stuff. All right. Check out this material. It is life-changing. And if you want to talk about life balance or life or money, this is what we're here for. The phone number is 888-825-5225. We answer questions about a little bit of everything around here.

Tammy is going to start off this hour in Sarasota, Florida. Hi, Tammy. How are you? Good afternoon. Afternoon. Well, Thank you for taking my call. My question is regarding umbrella insurance policies. Are they worth it? Do they just entice people to sue more frequently or go after more beyond that as well? No, I don't think there's any indication of that. I think that people are enticed in a lawsuit-happy world to sue for anything anyway. And so I think they're worth it.

I mean, you can get a million-dollar umbrella policy that attaches to the top of the liability on your car and your homeowners, which is usually up to a half a million. So that gives you like a million and a half total. In most areas, you can get that for $200, $300, something like that, from an independent insurance broker or from your insurance broker to match up with your current coverage on your P&C. And, yeah, it's worth it. Once you've got a net worth or something that gives someone the indication that they might be able to get something out of you.

And so in a lawsuit-happy world, for $300, I always recommend that when you've got a half-million-dollar net worth and above, or if you're doing something that makes people think that you do. You talk about that with women in business or anybody in business, but specifically you and I have had conversations around this, around business boutique, women that are in a business that either they have a lot of wealth or even the appearance of wealth that would make someone want to sue them and that it's a good idea, whatever. And even thinking about that from an incorporating standpoint, you talk about that. For instance, if you're doing something that, you know, around here we call it spotlight work where you're in the media or you're in a spotlight of some kind where that gives people the idea that, you know, you could be ripe for the picking if you happen to bump into them with your car. Yeah. And so I carry a $10 million on me because if I bump into somebody,

they're going to go, oh, yeah, everything's okay. What's your name? Dave Ramsey. Oh, God, my back! You know, so that's kind of the way I'm looking at it. You know, I'm a little bit cynical, and I have a good reason to be. So, yeah, I think they're worth it, to answer your question, and we recommend them. Once you've gotten up, you know, you don't need one if you've got a negative net worth or $100,000 net worth or something,

unless you're doing something that gives the appearance that some, you know, all I'm trying to do is hand off the lawsuit to an insurance company because it doesn't change anything but they're gonna they're gonna fight it or settle it or whatever they're gonna do um versus me that's all amounts to i can self-insure through a million dollars or 10 million dollar hit uh but for the few dollars that it costs to buy it it's it's it's a really good buy in the insurance world to not have to deal with it yeah just, you know, and they can go over. And the sad thing is they'll settle a lot quicker than I would. Yeah.

Because I can't stand a fraud. So I get all principled about it. I won't run this into the ground. It turns into a long fight. It's an expensive fight. And the goobs at the insurance companies will just write a check, you know. So Raven's in Atlanta, Georgia. Hi, Raven.

How are you? I'm good. How are you? Better than I deserve. What's up? I was wanting to know whether or not to pay off my mortgage, or I'm about to inherit some land, and we want to save to go to house. Which one would be the better option? We owe about $50,000 on our house now, and we earn about $14,000 by Airbnb in it.

Okay. Well, it's kind of the same thing, because you're going to sell your house to build the house eventually, and so paying off your house is like saving it, because you're not going to keep it, not and go get a mortgage on your build it on your new house you build not if i not if you do what i tell you to do anyway so no i would not i would not keep a paid for house as a rental and then go take out a mortgage to build a house no i would not do that so i'm going to tell you to sell your house at that point when you're ready to build so the money's going to come out of it and so either way the

money's going to be available for the build. Okay. That make sense? Yes. I'd mainly just throw it at the mortgage. That way, it's for sure shifed. Yeah. I mean, and here's the thing.

If you decided to go build a home, you could take out a construction loan, which is what most people do, if they're going to borrow money, that is, to build a home, on the land. And the bank doing that is going to require you get a preapproval for your permanent mortgage. That's called a takeout letter to show that you can convert the construction loan to a permanent mortgage at the time the loan is finished. And part of that will be, you know, we're going to sell our house like the month before the house is completed. So we move in and we're going to free up all of that money and it'll be the down payment on the, and you'll have a mortgage or no mortgage or whatever you have at that point out of that construction loan. So the construction loan will be larger than the permanent because you'll sell your house and use the money out of it. I guess that makes sense.

That makes sense? That makes sense, yeah. Okay. Yeah. So that's what you do. And I love paying down the house versus throwing it in savings because it's harder to buy a bass boat with that money. It's accounted for. You can't get to it as easy with more frequency than you know i get calls and emails from people dealing with the recent loss

of a spouse or a parent you can hear the struggle and the heartache that they've been experiencing. And at a time they should be grieving, what breaks my heart the most is the strain and tension that they're going through because of money, especially when it's a situation that could have been avoided. If you have a family, it is your responsibility to have term life insurance. It's one of the things you do to say I love you. And yes, this is an ad for Zander Insurance. But since this is one of the most effective ways I have to get my point across, so be it.

For over 20 years, I've been telling you about the importance of term life insurance and protecting your family. Listen, you need to check out Zander.com or call 800-356-4282. I can't say it enough. Protect your family. It's what you're supposed to do. Go to Zander.com or call 800-356-4282. Christy Wright Ramsey Personality is my co-host today open phones at 888-825-5225 her new book is on pre-sale called take back your time the guilt-free guide to life balance if you've ever made a dumb decision with zeros on the end because you didn't do your research, well, that'd be all of us, right?

We've all done this. Most people make choices, sadly, based on feelings or opinions. And sometimes they do this on something big like a house. When it comes to the real estate market, feelings are not your friends. Facts are your friends. So check your facts. Find out what you can actually afford. Research what's trending in home prices. Talk to a reputable real estate agent in your friends. So check your facts. Find out what you can actually afford. Research what's trending in home prices.

Talk to a reputable real estate agent in your area. Never buy a house without the facts. Go to RamseySolutions.com slash agent. You can get one of our endorsed local providers, Ramsey Trusted, and they will take care of you. They're people that we've vetted to be the top real estate agents in your area. That's RamseySolutions.com slash agent. Our question of the day comes from

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Always use the promo code RAMSY to get the best possible deal. Today's question comes from Caleb in Ohio. I'm a skilled trades apprentice and currently make $30 an hour. I'm married to a beautiful wife, and we have a 10-month-old baby. Ever since the COVID lockdown started, my wife has been left unemployed. She went to college and has a degree in psychology. I can work overtime at my job and could potentially bring home an extra $1,000 to $1,500 a month. We are $180,000 in debt, including our mortgage.

She loves staying home with the baby, but I think it would be highly beneficial for her to have a good paying job. Should she get a job? I feel like my chest get tight this sounds like a fight yeah yeah well first okay i want to challenge one thing at the beginning of this uh since covid lockdown she's been left unemployed there are job opportunities people are hurting for employees everywhere all the time, and she has the potential to do something on her own. So it's not that there's not an opportunity out there. I want to challenge that, first of all.

That's true. The deal is she hadn't been looking for an opportunity because she was staying home with the kids. She's like, ooh, there's nothing out there, babe. Sorry, Caleb. I checked. I worked on it for like a minute and a half today. There's nothing.

There's nothing out there. Shucks. I'm going to have to stay home with this adorable baby. Darn. Yeah worked on it for like a minute and a half today. There's nothing. There's nothing out there. Shucks. I'm going to have to stay home with this adorable baby. Darn. Yeah. Yeah. Try it again. Yeah.

You know, what's interesting is, and this is like so many questions we get, Dave, is it's a values question more than a money question. Yes, there's a financial piece of it. If she got a job, you all would get out of debt faster. That's a that's a financial mathematical equation. But but then you look at the cost of child care, too. It would have to be something that makes more than what you're paying in child care to make sense if you are paying for child care, which is a major variable in there. But I think it's interesting, too, because the idea of women staying home is something that is extremely – what's the word?

Emotionally triggering? Polarizing? People have a lot of opinions on? I don't know. Yeah, I think they have two opinions in that house. He wants her to go to work and she doesn't want to. So that's problem number one. Yeah.

You guys need to get on the same page on that. Because I got a feeling, Caleb, you completely stacked this whole question. She hit it right then. I mean, here's an example, Caleb, how, you completely stacked this whole question. She hit it right then. I mean, here's an example, Caleb, how badly you screwed up your intent here. We're $180,000 in debt, including our mortgage. So what, $179,000 of it's the mortgage? We don't know. You completely stacked that.

We're so deeply in debt is what you're trying to say, and that's a bunch of crap. I'm calling you on it, dude. We're sinking, Dave. Send her to work. Tell her she needs to work. She needs to go to the salt mines now but the uh all right so here's the thing uh i think the first thing you two need to agree on is if we can afford it and our family is going to be okay are we on the same page that she stays home? Yeah.

And you're not there. Yeah, and that's so... Because I'm reading in between the lines, oh, Caleb wants her to go to work even if they were millionaires. A hundred percent. And what's so important about that piece of it is that if you're not on the same page and you continue to function this way, you're going to resent her being home. Yeah, and she's getting tired of being treated like she's lazy.

Caleb, you're going to mistakenly think that she does nothing all day. And let me tell you right now, a baby is not a vacation. She does work. It's just at home. So that's the first piece of it. But if she does go to work to make him happy, she's going to resent that. So getting on the same page to avoid the resentment building up between you guys is going to be so important. So at what number, at what point in your finances are you both going to be in agreement?

Because right now there's not any number. I can read it in here. I don't believe there's a number. And Caleb, you need to determine at what point you are comfortable with her staying home. And if that's never, you need to look in the mirror. Okay, so that's never you need to look in the mirror okay so uh that's an issue because your wife has said i want to stay home with the kid and this is your kid your wife so that's an issue to just declare everyone who stays home with a kid lazy regardless of the numbers is pretty much asinine caleb so So, you know, that's not an option. You can't put that on the table here.

And so, now, if she wants to work, that's a whole different story. Absolutely. And if she wants to work no matter what the income is, that's a different story, too. And so, I mean, in your case, you've got three kids. You enjoy being a Ramsey personality in the work time. It's a lot of hours sometimes. And Matt makes plenty of money. You easily could stay home.

But you get fulfillment here and have chosen that. And so that's a completely different equation, too. And Rachel, too. My daughter, one of your best friends, the same thing. So anyway, now, at what point can she stay home? If you guys can pay your bills and you can eat and you can move ahead, and I'm thinking you can with what you make in Ohio, then if she wants to stay home mathematically, I think she probably can now. Or you could set some interim goals that says, okay, once we hit this break,

then we're going to make that call. Once we finish off the non-mortgage debt, then we'll make that call, or something like that. What's interesting, too, that I'd be, and I'm sure if they went to counseling about this, I'm sure a counselor would actually dig into it, but I wonder what the hang-up is for Caleb. It might be financial. It may not.

There may be something where it's like there's a level of expectation that he sees in work ethic. Something that you need to dig into and unpack and deconstruct and get on the same page. That it's not just a number. Because to your point, there may not be a number. It may be something else in him that is a hang-up. And so y'all getting on the same page there is going to be so, so important. That's how it sounds in the email to me. Well, and one more thing on that. That's one of the things I love

helping women do with Business Boutique because a lot of women in our Business Boutique audience and my coaching group that come to the event, they have that desire to stay home but have a desire to do something else and they don't want to work a traditional 9-to-5 in an office job

so they start a business from home during nap hours. So there's also other options between her just working 50 hours a week outside the home so just she might make more than at that than something else yes yes absolutely yeah a lot of the ladies in business boutique do yes yes lots of options rich is with us he's in newark new jersey hi rich how are you? Hello. Hi, what's up? Can you hear me? Yes, sir. How are you?

Good. I got a quick question, Dave. I'm 76 years old. I got $1.2 million sitting in six different savings accounts. My house is paid. Boats paid. Calls paid. I owe no debt at all. Good you should i move it huh good for you

well done rich except that i don't know what to do with it what a great problem to have oh yeah but it it is good but uh good, but I don't know. What do you think? I personally, I mean, I'm not that far behind you. I'm 60. I personally would have that money invested, and here's why. If you were in good growth stock mutual funds and you made 10%, that'd be $120,000 a year.

Right now, you're making $12,000 a year. You're making nothing. You're making twelve thousand dollars a year you're making nothing you're making nothing yeah right and so if i'm if i'm half wrong if the stock market does half of what it normally does you're still going to make 5x of what you're making right now then you don't have to move it all over there and the main barrier to moving it over there is usually fear uh and fear is dissipated by one of two things. One is you come to realize that the fear is accurate, which means you would not do it.

Or you come to understand the things, the stock market better by sitting and meeting with someone to help you walk through that. Click SmartVestor at RamseySolutions.com and you can sit down with somebody to help you with that and learn. Take your time, but learn and let's start moving some of that money gradually into the market. Christy Wright, Ramsey Personality, number one best-selling author, is my co-host today. In the lobby of Ramsey Solutions on the debt-free stage, Matt and Amber are with us. Hey, guys, how are you? Good.

How are you? Better than I deserve. Welcome. Where do you all live? Houston, Texas. Well, welcome to Nashville. Thank you. How much debt have you guys paid off?

$92,610. Excellent. How long did that take? Eight years, 11 months, and two weeks. Eight years, 11 months. Wow. And your range of income during that time? It ranged 60 to 150. Wow. Okay. And what do you guys do for a living? I'm in cybersecurity. And I occasionally worked at a church, but mostly a stay-at-home mom. Good for you. Cool. Very cool. Just what we were just talking about. Yeah. And what kind of debt

was this $93,000? It included our mortgage. Yay! You paid off your house! Look at the weird people! Amazing, y'all. What's this house worth? About $170 now. I love it.

How old are you guys? I just turned 40. And I'm 37. And you paid off your house. Yes. That's weird. Y'all are weird. That is amazing.

I love it. Way to go. Very cool. Well, tell us the story. How did this happen? I mean, how did you find us? What are you doing? Yeah, well, it started in 2008 when we got married and a friend gave us a copy of the total money

makeover for a wedding gift so we read that and then we saw that our church offered fpu so we took the class and just after our first anniversary we finished paying off our consumer debt wow so we just kept working the baby steps. We saved our emergency fund, saved for a down payment for a house. And then we took out a 15 year mortgage right before our first child was born and just kept plugging away until about three and a half years ago when Matt was diagnosed with cancer. So we kind of had to slow things down a bit and take care of that. Sure.

But we were thankful to be on the plan at that point, to not have to worry about the financial side of things when that was going on. But it also renewed in me a sense that I wanted to finish our goal together of paying off the house. So we had been setting aside money to upgrade Matt's car, but when our car savings got close to the amount left on our mortgage, I thought, I can't spend this money on a car. Sorry, Matt. Let's just do it and pay off the mortgage. No upgrade. The upgrade is a happy wife. Yeah, yeah, yeah, exactly. That's so true. Okay, so I'm curious, when y'all bought this house, y'all were on the plan

and you bought this house, were y'all were on the plan, and you bought this house. Were y'all intending to get intense about paying off this mortgage early, or was that something that kind of set in later? I had always wanted to pay off the house early, probably earlier than he wanted to. But I was more intense than he was. It sounds like you worked the baby steps exactly as outlined. Yeah, we did. And, I mean, you worked right into the 15 year after you were debt-free and had your emergency fund in place. And then you said, okay, we're going to take a 15, but we're going to pay it early. And then everything's cooking along and then the little hiccups.

So how are you doing, Matt? The other side of the cancer? I'm feeling good. I finished my last treatment about three months ago. So hopefully that never comes back. Amen. We're praying and hoping. That's right. Yeah, I'm feeling pretty ago. So hopefully that never comes back. Amen. We're praying and hoping. That's right.

Yeah, I'm feeling pretty good. Good. It's good to be here. Good. I mean, just surviving the cure is part of it, isn't it? Yeah. The other part was the medical bills. Yeah.

And we found out what our out-of-max pocket would be, out-of-pocket maximum would be, and we saved that each year. Wow. And then after that, we would decide, okay, we're going to put more towards the mortgage or save for this, save for that. It was very peaceful financially speaking. Well, it's so interesting that you used the word peaceful when you're talking about going through cancer and having to deal with that because I know so many people, that's the opposite they would ever think.

But when you have your finances in order like you guys did, then it takes that piece of it off of it. And where you're just focused on healing and getting the treatment you need. And so, well done, you guys. That's amazing. I'm so glad you guys had that foundation before this came. Definitely. Way to go. Way to go.

How does it feel to be completely free now? I mean, the cancer treatments are over and the house is paid off. My gosh, it's like spring is here yeah after the winter yeah it feels great it still feels a little surreal um but yeah it feels wonderful so when's matt get his upgrade yeah matt's a great question for us to do he's finally getting that no payments that's gonna happen quick no payments you can you can save for those goals so much faster yeah that's amazing you guys well congratulations you guys. Well, congratulations, you guys.

Very well done. Thank you. All right, so you've read the total money makeover. You went through Financial Peace University at your church. You pay off your house and everything, 40 years old and younger. What's the secret to getting out of debt? I think the first step was the budget and getting on the same page. We met every month, and we looked at the budget, and we're like, okay,

where is this money going to go? And that diligence, that tenacity, we're going to meet even if we don't want to. And sometimes we were late in the middle of the month instead of the beginning of the month. But just being on the same page, that was so powerful, I think. And agreeing and making compromises when we disagreed, I think that was very important. What kept you motivated for the long haul? Because this was a long journey for you guys from the time you paid off your last consumer debt to now. The house is a big, that's a big thing to pay off. What kept you motivated through the journey?

Just being able to do this together and have that weight off our shoulders, especially after the diagnosis, just thinking, okay, I don't want to have to deal with anything else. I don't have to. So let's just go ahead and get that done and focus on the other things and have fun and enjoy life together. Yeah, good for you. Way to go, guys.

You guys are heroes. You completely changed your life, changed your family tree, changed everything, and pushed through, man. Well done. Well done. Thank you. Well done. So proud of you. Well, we've got a copy of the Legacy Journey for you.

That is the next chapter in your story for sure. To become Baby Steps Millionaires, you're right around the corner from that. And then move on to change your whole family tree. Also, an extra copy of the Total Money Makeover to give away. That's what started your journey. You can help somebody start theirs with it. That'll be perfect. And you brought the kiddos with you.

What are their names and ages? We have Hope, Ryan, and Luke. And they are 9, 7, and 5. All right. And have they been practicing a debt-free screen? Oh, yes, we have. They know what it is, right? They're ready and 5. All right. And have they been practicing a debt-free screen? Oh, yes, we have. And know what it is, right? They're ready to go.

All geared up. You guys look like you're ready to yell. Yeah. We drunk fall away from Houston. We're ready to yell. That's right. All right. Here we go.

I love it. Matt, Amber, Hope, Ryan, and Luke from Houston, Texas, $93,000 paid off. That's the house and everything. They're weird. Eight years, 11 months. Did it make it 60 to 150? $33,000 paid off. That's the house and everything. They're weird. Eight years, 11 months, did it, making $60,000 to $150,000. Count it down. Let's hear a debt-free scream.

All right. Three, two, one. We're debt-free! Yeah! Woo-hoo! I love seeing the kids. Oh, my gosh. I love it. That's amazing.

Fabulously done. Very well done. Open phones at 888-825-5225. Those guys are amazing. What great heroes. Teresa is in Dayton, Ohio. Hi, Teresa. How are you?

I'm well. How are you, Dave? Better than we deserve. What's up? Well, I was calling. I'm trying to decide. So my mom's been like very sick for the past year, and there's a lot of care and stuff that I kind of manage with her. And I've been looking. I've been on the journey since like right before COVID. And debt-free other than the house and stuff. But I've been looking at, I mean, you've really motivated me in just trying to find a path with God. And, you know, trying to help other people out too. And I just, I want to do the financial coaching, but I just don't know if this is the time.

Just because of the overwhelmingness with my mom and stuff. Yeah, yeah. Might not be. It might be that you spend your time best with mom right now, it sounds to me like. I'm just listening to your voice. There's no shame in that. No, there's not.

And here's a good way to think through it. You know all the details. When you are 25 years older than you are today and you look back on this season, which thing are you going to be glad you did? Teresa, I just talked about this on Instagram today. I just want to encourage you, this is your season of taking care of your mom. This is where you are. This is not who you are.

Just because you're not pursuing that right now doesn't mean you're never going to. Your season is where you are, not who you are. You do what's right right now, and you'll know what to do next. And when you look back, you smile and go, I did the right thing at the right time. That's right. Whatever that is. This is the Ramsey Show. We'll be right back. Christy Wright, Ramsey Personality, number one bestselling author, is my co-host today. We launched her new book, and it is in presale.

It's selling like crazy, called Take Back. Let me try it again. Take Back Your Time, the guilt-free guide to life balance. All about this elusive thing that everybody talks about being balanced, which really is a misnomer. But Christy addresses all that beautifully and kind of sets you free to where you can live your life well and with a level of intentionality. And you're going to love this material.

It's incredible. Aaron is with us in Orlando. Hi, Aaron. How are you? I'm doing great, Dave. How are you doing today? Better than we deserve. What's up?

I wanted to call, Dave, because my wife and I would like to ask a question about upgrading our housing situation. We're currently on baby step six right now, and we've maxed out our 401k Roth contributions as well as an additional $6,000 per Roth IRA. And during a time of pandemic when we've seen so many people struggling, we've been so fortunate where our careers have really, really blossomed. And a big dream of my wife has always been to move to a certain area in Orlando as well as myself and upgrade our housing. And right now we have the ability to save on average about an additional $50,000 to $75,000 a year that we'd like to put towards making this purchase. We want to be patient about this purchase because there's not a lot of houses that come up for sale in this area regularly. And when they do, they go very, very quickly. And we're just not in that position

quite yet. So my question for you is, would you take this additional $50,000 to $75,000 that we're making additionally on an annual basis and just pay down our current mortgage? Or would you take that and put that maybe in a gross mutual stock or mutual funds arena to let it grow and then use that towards paying towards the down payment of the house when we find the right deal at the right time. Oh, you're going to sell your house, aren't you? Absolutely. So you're going to get your money out of it anyway. Correct.

We currently owe about $230,000 on our home right now, and it's worth over $400,000. Let's just say your career has continued to blossom and you paid it off. Yes, sir. And then you found the house in the dream neighborhood. You just put that one on the market and sell it and use that for the down payment, right? Correct. My wife, she's the one that's getting more analytical about it. She's wondering if we're better off using it and seeing maybe that 8% growth on it

as opposed to just we're paying right now 2.65% on our mortgage rate, and she thought maybe it would be better off investing it there and seeing growth there rather than paying down the mortgage itself. Yeah, that's when you didn't do math because here's the problem, okay? The way you get into that new neighborhood has got 95% to do with you saving $50,000 to $100,000 a year. It has 1% to do with what the rate of return on your savings is. The math that gets you into that neighborhood is not rate of return. It's your savings rate based on your income. So, you know, if you want to use that argument that she's using,

we would never pay off the mortgage. Correct, yes. My contention is I'd like to pay off the mortgage because I would like to be able to do my debt-free screen no matter what. Well, yeah, and either way, you get to your goal. But the idea that somehow making a little bit more on your money is going to get you to the goal faster, no, you're adding risk to the equation, and I wouldn't do that. I would continue to work your plan.

And the other thing I think I heard is that you're putting more than 15% of your income into retirement. Correct, sir. Yeah, because I would hold up at baby step four at 15% going into retirement, and I would throw everything else at the mortgage. That's the baby steps. The additional amount is more towards looking towards the kids for their education for college. No, I said 15% towards retirement. Oh, yeah.

You said you maxed out everything. Are your incomes so high that maxing out everything is 15% of your income? I believe the maximum amount we're allowed to deposit is $18,750 or something like that. This year is $19,500, yeah. Yeah, so we've maxed that out completely, and then we started... Is that more than 15% of your income? Yes, it is, sir. Okay, that's not what we take.

I'm sorry. I'm sorry. I'm sorry. It is more. I'm sorry. Yeah, and so you're putting in 22% to 25% of your income instead of 15% of your income. I would back that down, throw everything at your house. Let's get your house paid for.

Pile up cash once the house is paid for. Beyond that, but, yeah, so, yeah, you guys, I mean, that's what we teach. Again, you can do your plan if you want to do your plan, but 15% is the most of your household income. But your household income times.15 is the most I'd be putting into those 401ks and Roth IRAs. Anything beyond that, kids' college, anything beyond that, we're paying down the house, going to get it paid for, and then you'll be ready, Christy, to move into that other house. Well, and the other thing that I love that you pointed out, Dave, is it's not just about the money as it is. We're talking about where you put the money, the risk. And so, Aaron,

you want to get in this special neighborhood that's hard to get into. You're going to be in a really good position if you have hardly any mortgage or a paid off house and then some saved up cash when you make an offer on a home in any kind of market versus worrying about what the mutual funds are doing or whatever. You're just going to have so much more control to make a good offer and have a good position for that house you want. And that's what we're trying to help you do. We're trying to help you get in a good position financially, but also from a control standpoint and options.

Yeah. So you guys are, again, you can work your plan, your wife's plan, if you want to. That's allowed. There's nothing against the law. But we are firmly convinced after 30 years of doing this that if you will follow those baby steps exactly, you're going to find yourself in wealth faster than any other methodology. And we've actually got millions and millions of people that have done it that are the data points that indicate that. It's not a college professor with a theory.

I've been doing this a long time with tens of millions of people. We were just saying as we walked out in the break to congratulate those people debt-free on their house, we're seeing a lot more people paying off their homes, and it's a result of those tens. It's the number of years. Yeah, the 30 years of doing this. When I hadn't been on the air eight years, I couldn't have somebody come in here and go, eight years ago, I started listening to you. But now that I've been on the air eight years i couldn't have somebody come in here and go eight years ago i started listening to you and but now that i've been on

the air 30 years there's a whole bunch of them that are out there that um that you know they're further along and and we're also seeing the you know the other piece of it which is the financial piece babies my parents listened to you when i was a kid oh shut up you know but um yeah this is the uh make make day feel old statement but um but you don't have the make Dave feel old statement. But you don't have to make me feel old. I'm well aware of my age. But, you know, the thing is this stuff works. It's always worked.

It still works. You know, Ramsey's people are out of touch. No, we're not. We're in touch with the truth. We know exactly how wealth is built in today's world the fastest possible way. And there's a lot of stuff we don't know anything about around here, but that's not one of them. We are the expert on that in the whole freaking nation.

So, and it's, you know, it's not, my age does not disqualify that. As a matter of fact, it qualifies it. So, well, you don't understand modern yes i do you goob i understand modern everything i can even work my own phone go figure you know so but this idea that that somehow that the principles of wealth building have somehow shifted dramatically in the past 10 years and ramsey's a boomer and doesn't get it just asinine yeah just ridiculous so the principles are all have always been the same. They will always be the same.

And now the vehicles you use might shift. Some of those things might change. But, you know, you can't use that to make an excuse to get in to get rich quick garbage. Well, and you always make a good point, too. Don't take financial advice from broke people. And half the time, the people that are telling you, you should be doing this, you have to build a credit score, you have to take out debt, you have to have a mortgage, you should put your money in this, whatever. They're people that are deeply in debt. They're people that are not winning financially.

These are not the kind of people you want to listen to. If the financial blogger you're reading lives in his mother's basement, there's a problem here. We need a track record. We need proof. There's a little bit of something going on here. I've got socks older than him. But that's the trick. You've just got to think this through, and, you know, there is a thing called experience

and proof texting in that experience. Christy Wright, Ramsey Personality, my co-host today. James Childs is our producer. Kelly Daniels, our associate producer and phone screener. I'm Dave Ramsey, your host. We'll be back with you before you know it here on The Ramsey Show. Hey, it's Kelly, associate producer for The Ramsey Show. This episode is over, but if you heard about an event, product,

or service, and didn't have a chance to write it down, don't worry. We list everything you've heard about during this episode in the podcast show notes section or head to TheRamseyShow.com. Thanks for listening.