The Ramsey Show - App - What’s the Best Way To Plan for the Cost of Giving Birth? (Hour 2)

Episode Date: November 23, 2021

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I'm I'm I'm I'm I'm I'm I'm 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.

Dr. John Deloney, Ramsey personality, is my co-host today as we answer your questions about your life and about your money. Open phones here at 888-825-5225. Jim is with us in Kansas City. Hi, Jim. Welcome to the Ramsey Show. Good afternoon, gentlemen. I've got to say that bumper music you had a second ago there, Dire Straits, Money for Nothing. Really enjoying that. Well, thanks, brother. How can we help?

Hey, I'll tell you what. It's been a rough year. God is good, and He blesses us. But I lost both my parents about a month and a half ago to COVID within a week of each other's. Oh, my gosh. I'm sorry. How old were they? Well, 67. Jeez, the weird puppies.

Man. Pretty tough. Pretty tough. But, you know, my parents blessed my wife and I. They prepared and they blessed us with a little bit of an inheritance, trying to figure it out. So just the short story, my dad had a $100,000 annuity through Southern Baptist Convention. Mom had a $100,000 401k through her work, and i am now the beneficiary and my understanding is that they will now be moved into a beneficiary 401k that has to be distributed within 10 years

correct and i'm not sure how to do that based off of my wife and I make about $150,000 a year, and so we're concerned about the tax implications because it is considered income. Yes. What are your suggestions? All of that information is correct. The law was passed about 18 months ago. There used to be an inherited IRA. You could drag it out a lot longer, inherited 401K. The government decided they wanted to get their tax money out of your hide even faster, and so they now have a 10-year plan for you. And so what I would do is just sit down with your investment advisor. If you don't have one, click SmartVestorPro at RamseySolutions.com,

and the SmartVestor pro can sit down with you and put this stuff you can roll it all into an inherited ira uh which is fine for they're all the same thing and just put it in some good mutual funds and then basically you're going to take out a tenth every year and your and your growth and then that would be... Taxable. So if I make $150,000 a year and basically $100,000 at, you know, 10% per year... You know, I add another $10,000 to $20,000 to your income every year. That would be better than to pull it all out at once... Yes. ...and then start at a Roth IRA with it?

Yes. Because about the only thing we're sure about tax law is it's going to change okay just depending on which set of crazies is up there okay sounds good so just yeah the crazy left is going to tax you into oblivion the crazy right is going to try to figure out a way to undo it so um it's just you know it's just going to be something all the time i mean the trump tax laws that passed were the most bizarre wonderful things i've ever seen for keeping their hands off of my money and but they were bizarre i mean i've never seen anything like it in my adult years and they were fairly quiet about it nobody talked about it because nobody wanted to give me any credit i guess i don't know but then the biden's been going through there with a pen and a machete and changing it back so and any and even more so

so including this law so um i don't i don't know i'm just going to take it as slow as i can take it is what i want to do i'm going to keep the government's hands off of it as long as i can keep their hands off of it because you don't need the money and let's let that what would be tax money of this like if you pull 20,000 bucks out let's call 3,000 of a tax dollars or 6,000 of a tax dollars that's 6,000 if you had left it in there that is the government's money ultimately that would have been growing you money but now you're not it's not going to grow you any money because you're going to have to send it up there so you want to take it as slow as you can take it that's the moral of the story good question we appreciate you joining us open phones at 888-825-5225 you jump in we'll talk about your life and your money

uh let's go to mar in cleveland ohio hey mar how are you hey Hey, Dave. Hey, John. How are you guys doing? Great, man. What's up? Hey, so my job is offering, I'm in a new company. I started like a week ago. They're offering a cash savings benefit plan for retirement. They do have a 401k, but they don't contribute to that. If we just had the 401k, we would just put our own money into it. I did talk to a financial pro. He told me, since I already have a Roth IRA,

and I know you teach match-based Roth, Roth-based tradition, should I just put money into my Roth IRA? Instead of what? Instead of the cash balance benefit plan that my job is offering. Okay, is the job, the cash balance plan, are you required to put money into it? They said they would match 3% and we can match 2% after a year. Only in the cash balance plan? Yes, only in the cash balance.

What do you do for a living? I'm a truck driver, sir. Is this a union plan? I don't think they are. Okay. Well, you would know if you were a union, dude. Well, I'm sorry, we're not a union. No, we're not a union.

Okay. Once again, it doesn't make sense. I don't know what that is. Can you explain to me what a cash balance benefit plan is? Well, it's a defined benefit plan. It's just very unusual, and honestly, it's very old-fashioned. It's very 1960s. I haven't even heard of one, and I don't know when.

That's what I'm thinking. So basically, a defined benefit plan is simply they are running a pension plan that they are largely funding and they are controlling it. The easy way to think about it is the name tells you what it is. They are defining the benefits. You're not. It's a defined benefit plan, and the cash balance portion of it is just the calculation of how

they're defining the benefits but um it's oh it's uber conservative at best like gonna pay five percent maybe maybe six percent with the regulations that are on it and so um i'm not putting any money in it if they put money in it great but i'm not putting any money in it. If they put money in it, great. But I'm not putting any money in it just to get the match. In other words, it sucks so bad that you getting a 3% match doesn't make it not suck. That's a better way of saying it. So I just move on. That's just the simple way of saying it. So go ahead and do your own thing with a Roth IRA or if they have a 401k, do that.

And someday maybe they'll come around and do a match. But, yeah, if you'll load your Roth IRA, and if you're married, load your wife's Roth IRA for the rest of your life, you'll be rich. Because you're a young dude. You've got plenty of time. It's so bad I won't even take your money. That's really mathematically what it's going to come out to be. Yeah. So there you go.

This is the Ramsey Show. that's really mathematically what it's going to come out to be. Yeah. So there you go. This is the Ramsey Chef. I saw some recent financial statistics and there was some pretty troubling news. When families were asked how long it would be before they faced financial hardship if a spouse died, nearly one-third said they'd be in trouble immediately. Another 44% said they'd be financially drained within six months. People, it does not have to be this way. Term life insurance plans are just plain cheap, and companies have made it even easier by not requiring exams in many cases. There really is no excuse to leave your family in this situation by not having life insurance. This is why I talk about Zander Insurance every day. They're committed to protecting families with the only products that I recommend, and their team keeps the entire process simple and affordable. Go to Zander.com for quick online pricing or call 800-356-4282.

This has to be a priority. If your family is in this situation, you need to get this done. Dr. John Deloney is my co-host today. Open phones at 888-825-5225. Well, Christmas is coming. Turns out it's in December this this year they didn't move it and i love christmas and consequently it is required if you work at ramsey that you love christmas because ramsey solutions we're just christmas people we're in a christmas frame of mind one way we celebrate christmas is with our ramsey show listeners by giving you cash. It's become a tradition.

We give away $500 a week and a grand prize of $5,000. We've already started doing it. We've already had some winners. And you can enter every day, no purchase necessary, to increase your chances of winning. You just go to RamseySolutions.com slash giveaway. RamseySolutions.com. That's where you find everything about Ramsey, by the way.

And, you know, you can sign up every day for your $500 a week that we're giving away. And we're not giving it to everybody. We're giving it to one person. So we have to do a drawing, and so you have to be in the drawing. If you're looking for life-changing gifts for your family or friends, you can check out our week-long Black Friday sale in the store at ramsaysolutions.com. Up to 73% off bestsellers, including a bunch of our bestselling books at $10, including the Total Money Makeover, Rachel's brand-new New York Times bestseller, Know Yourself, Know Your Money, $10.

You know what that is? A stocking stuffer. You need a big stocking for these books, but it's okay. This year, forget the one. And by the way, we actually have them in stock, and we will ship them now. stuffer you had a big stocking for these books but it's okay this year forget the uh one and by the way we actually have them in stock and we will ship them now uh we don't have a supply chain issue because we uh heard about supply chain stuff and went ahead and got stuff extra in so we were ready for christmas and stuff and our shipping team is feels like it's important to get it to you and stuff so it's like weird like

we actually are i ordered something on amazon like three weeks ago next day delivery don't still have it sharon's like do you want to reorder that i'm like well yeah it works good last time let's do it again do it again so i mean there's a lot of this stuff is just out or these people are backed up and they can't get it. It's wild. Hey, we're going to ship it. So if you need something for Christmas, we'll ship it to you. Just buy it and it'll work, you know.

Hey, check out the biggest Black Friday sale yet at our online store at remsysolutions.com. Austin's with us in Salt Lake City. And, hey, Austin, what's up? Hi, Dave. Thanks for having me on it's a pleasure to speak with you and your principles have changed my family um i'm calling in because my wife and i recently had our first baby yay what'd you have we had a little girl. Oh, little girl. Daddy's in trouble. Oh, yeah, it's been great. It's amazing being a dad. We've kind of asked our parents, though, for more cash for her

instead of toys for the holidays coming up. Good luck with that. We'll get you some. Yeah, I'm not a huge noise-making toy guy, so we'll see what happens. Yeah, but grandfathers are, so I'm just saying. Yeah, we'll see what she opens up on Christmas morning. But we're hoping to figure out, we were gifted some money when she was first born. We're hoping to invest it.

And I tried to set up a 529, and it got to all the options of different funds and things like that that I can invest it. And I tried to set up a 529 and it got to the, all the options of different funds and things like that, that I can invest. And I, I frankly, I'm just hoping to figure out what sort of, um, investment I should put the money in that we do get for her. Ah, that's sweet. Good for you. Yeah, that's cool, man. Good for you. Yeah. Just jump online at ramseysolutions.com and click smart investor to get your college fund set up and they'll set it they'll help you set it up it's not hard at all we spread college funds like we do retirement across four types grow of mutual funds with long track records growth growth and income aggressive growth and international that's what my children's uh college fund was

invested in and uh and it's and that's what my personal retirement is invested in. And that's what my personal retirement is invested in. And so I'm not telling you to do something I wouldn't do. And by the way, it worked out okay. My little girl is 37. And I guess one of my questions would be, so my wife and I are debt-free, but I plan on doing professional school, a medical degree, so we will not be investing into it ourselves. We're trying to figure out a way to do it debt-free, but

we probably won't be putting in anything other than what we get each year for gifts and things like that. That's fine. That's fine for now, and then later on when you get past the school and you've got your income, then you can go that direction. Yeah, you'll be just fine. Perfect. Hey, thanks for the call, man. I appreciate you joining us. You're way out in front, brother.

So I was listening to the Entree Leadership Podcast this morning on my run, and lo and behold, Dr. John Deloney is giving advice on the um holidays uh-oh of what to do and um i discovered that you and i share yet one more trait neither of us are fans of the hungry hippo game oh gosh talk about loud stuff that grandparents buy kids the game is pointless and it's like you can't can you even buy it still oh we got it our kid you got new one you didn't get it at the garage we got it and i'm looking directly at you mom thanks we're real we're real excited about it yeah we got it and there it was a grandparent that's what i was thinking of when i heard you say that i think the game was no you didn't say that it was invented

by parents who wanted to torture their children who just had their first kids. Yeah, it's payback. Yes. What's the loudest? You give your grandson a drum set. Yes. Or like, hey, here's a foghorn, son. Yeah.

Moms love this in the morning. Here's the loudest possible horn that you can blow. Now blow it, boy. Come on, son. Blow it. I'm going to get my nieces and nephews cowbells and all kinds of loud noises. horn that you can blow i'm getting all right now blow it boil them come on son blow it i'm gonna get my nieces and nephews cowbells and all kinds of loud noises i'm just telling you it's um but yeah hungry hippo is it's about as lame as rock'em sock'em robots because you could the robot would hit him right in the jaw and it didn't hit yeah it didn't pop his head up until you had it had to hit him the other way the thing about the thing about it just didn't work well no but your bad design on the robots when you're

hitting it you can feel like you're hitting the guy in front of you with the hippos it's just i don't know and then my daughter wins and i don't have the psychology for that it's a mess well and the problem, too, is this. It's just teaching children wrong. Because, well, all the hippo stuff is cute and cuddly. Even the hungry hippos are cute and cuddly. And the cartoons, they're all wearing little tutus. Hey, real hippos are mean, man. And in the real, when you're in Africa, you should be more afraid of a hippo than a lion.

Is that true? I think I heard that. It kills more people than lions. Hippos. Yeah, they are vicious freaking animals. So there you go. Just a little school of knowledge that you didn't think you were going to get from the Ramsey group. Thank you, Hasbro.

You ruined it. For ruining our children. But loud toys. I think I'm going to go get a bunch of them for the grandkids. I had not thought of that as pay a bunch of them for the grandkids. I had not thought of that as payback. You've inspired me, dude. I'm going to go get a bunch of those horns.

Well, I got, there's a couple of them. There's like a flute thing, the potato thing or whatever it is. Oh, yeah. What do you call it? The recorder. The recorders. Oh, God. Every kid gets a recorder. There was one left over from some kid, and it's in the grandkids' playroom, and they

come out in the middle of all the adults, and that thing will blow your brains out. I love it. It's like, give me that. You know, it's like, yeah. I think, Dave, this could be your greatest Christmas ever. For about $37, you can laugh harder than you can laugh in the last calendar year. Payback.

You can go to Target and do all of your christmas shopping the evil side of papa dave is coming out every kid gets a recorder i don't know how great grandkids are gonna be i've been nicer to their parents but now i know yet another way to get their parents yeah just mess with them pretty excited about this is this is fun this is gonna be great yeah i i kind of vowed i was to be all responsible until they got to about three years old, and then they knew what the toys were. And then my children had to set boundaries with me because Christmas was overwhelming. I just lost my mind, and there was just stuff everywhere.

But it's so fun, though. Well, it was like no money, but it was just stuff. I mean, it was just a whole house. It was pow! And the little kids are just stuff everywhere. But it's so fun, though. Well, it was like no money, but it was just stuff. I mean, it was just a whole pile. And the little kids are just emotionally overwhelmed. I was the only happy one in the room. The kids are overwhelmed. The parents are mad because I violated boundaries, everything else. And so now I just have to get like one toy.

Boo. Boo. Fun ruiners. It could be loud. Yeah, just wait. I'm going to get them a bas. Boo. Boo. Fun ruiners. It could be loud. Yeah, just wait. I'm going to get them a bassoon. How do you like that, kids? I wonder if Amazon can overnight Hungry Hippo.

Or a trumpet. Oh, yeah, they can get you a Hungry Hippo, man. They can't get this other stuff I ordered, but they probably can get that. I wonder if Supply Chain got Hungry Hippo. You just never know. This is The Ramsey Show. So I'm talking about my children, my grandchildren being annoying with a recorder. the recorder and uh during the break it was discovered and played on youtube that uh dr john deloney had actually played a recorder to be annoying on his own show and that is now featured on youtube and now has been featured on the ramsey show on youtube during the break so i i made some

comment about teacher teacher educators are like music teachers and somebody on the internet's heard it wrong and wrote me a real meat like how dare you belittle music teachers it's like no man i love music teachers look at this i can still rave i'm not gonna lie i'm incredible on the recorder no you're not i just heard it i'm not like fingernails going down a chalkboard i'm not great i'm not great like one of my grandkids i wanted to smack you it was awful i'm not great at the recorder i'm not great. I'm not great. You're like one of my grandkids. I wanted to smack you. It was awful. I'm not great at the recorder. I'm not. Yeah, I gathered that.

And so whatever music teacher was in your life failed you. If your kid is good at the recorder, Dave wants you to personally send him a direct message on Instagram. No, no, not even if they're good or not good. I don't want any of it. Send it all to drjohndeloney at ramsay solutions.com it's his personal email all right game on my friend game on it's not really but you can try if you want it i'm sure the spam will catch it all right aaron and kamani kamana is with us in maui, Hawaii. Hey guys, how are you? Aloha, Dave. Aloha. It says on my screen, you guys are debt free. Way to go. How much did you pay off? $76,000. I love it. How long did

this take? Uh, 23 months. Rocking it. And what was your range of income during that two years? Uh, 132 to 167 000 you're rocking it cool what do y'all do for a living i'm a general contractor and i am the uh head fundraiser for a non-profit very good very good what kind of debt was the 76 000 uh it was irs It was seven credit cards. It was a P-lock and a car loan. Y'all kind of normal. So normal. Wow. How long you been married?

Aaron, we've been married 11 years together for 16. Okay, cool. So what happened two years ago that got you hooked up with this whole Ramsey thing? Well, I had to humble myself that a guy from tennessee had you know some info that was worthwhile for a girl from maui to listen to um maui people aren't arrogant no just me humility pill and uh we bought a house in 2010 we got married in 2010 we bought a car in 2010. We got married in 2010. We bought a car in 2010 and we had a baby in 2011. It was early in our marriage and it really just stressed us from the start. And we really thought that we could out earn our stupidity and entitlement. And I was facing a job change in early 2020. So in 2019, I was tracking, I kept looking at the numbers,

I kept trying to figure out how we could get ahead. And I thought getting a job, making more money was the answer. And shout out to the Maui Mami's Facebook group, people kept recommending this Dave Ramsey guy. And so I clicked on and I looked and all of the information was there. It was easy. It was elegant and it was free, which we really, really appreciated. And I don't know. My husband would probably say I kind of got a little obsessed.

Oh, you went the other way. The pendulum swung from. All in. I went all in. Yeah. To drink the Kool-Aid. Okay. Yes.

Wow. Good for you guys. Okay. So, Aaronaron did she get a little obsessed uh just a little you were checking her search history on her computer like who's this guy in tennessee she keeps talking about oh yeah podcast all day every day uh i'm sorry but it worked it worked so you guys got that you got information, and then what happened? What did you do to get out of debt? I had been tracking all of our expenses, mainly just our big bills, but it was the little things in between that was really killing us.

It was just getting into eating out. It was the small things. It was a death by 1,000 cuts and trying to pay off our debt all at once, you know, putting a $25 here on this credit card, or we would get a chunk of cash and throwing it on this, and then we would just spend it back up. So we really embraced the snowball. And I have to say, it was hard at first to learn and to change the patterns of behavior that we had.

And, you know, we kind of stumbled the first few months, but kind of January 2020 was kind of game on. And then the pandemic hit and that really helped us. Luckily, we stayed employed and couldn't go anywhere and couldn't spend any money. So we just, I just was on every dollar all the time, running scenarios, seeing how fast we could pay off the debt. And Aaron just looked at me and said, we'll be fine. We just stick to the plan. It's going to be okay. Wow.

Good for you guys. I'm so proud of you. Well done. Well done. So have you had a month where the check deposited and you didn't owe anybody any money? And you just look at that balance and think, whoa. I feel so rich. Yeah, it feels good, huh?

Way to go, you guys. Way to go. Who were your biggest cheerleaders outside the two of you? We kind of kept this close to the vest. I have to say, you know, humility is a big part of our journey and staying hungry. And we shared it with family and friends and they really encouraged us. We had a few older family members reach out and say, you know, I wish I would have gotten out of debt sooner.

You guys are on the great track, but this is really a journey for us to get close again. And, you know, we just needed, it was like therapy for us. It was, the journey was really a transformation for the two of us. You're free. Yeah. That's incredible.

And in Hawaii, the high cost of living, so many of our friends are living, are leaving. And we can do it. You know, Hawaiians can be in Hawaii. We can stay. We can raise our families. We can do it. You know, Hawaiians can be in Hawaii. We can stay. We can raise our families. We can do it, and I hope other folks here in Hawaii hear us, or anyone that lives in a high-cost living area, that you can do it. You just have to be humble and hungry and stick to the plan.

That's incredible. Powerful. Very powerful. And shout-out to the Maui mommies. I love it. And do you have little ones? We do. Ten-year-old and eight-year-old.

Ten-year-old and eight-year-old. And they're going to get to see a new picture of what a relationship looks like, of what marriage looks like when everybody's on the same page, when everybody's not stressed about money. And that will change their biochemistry, and they will slowly lean into their new relationships as they get older with a new picture because you all did this hard work. Way to go.

It's incredible. Yeah, you guys are heroes. That's beautiful. Absolute. Man, wow. Well done. Well done. All right.

Well, we got a copy of The Legacy Journey we'll send out to you. That's the next chapter in your story. You'll be moving on to be Baby Steps Millionaires next. And then also a copy of the Total Money Makeover. Maybe you can pay it forward, send it over to the Maui mommies, and let them raffle it off on the website or the blog group or whatever it is. So I'm honored to be mentioned there. Never been mentioned in a Maui group that I knew of before.

So you never know where a hillbilly's going to turn up. Dave, you're a big deal with the Maui moms. Yeah, I'm telling you. It's a hillbilly turnout. It's a hillbilly shout-out right there. Life's good. So my cool factor just went up a tiny little bit. I can agree to disagree, but go ahead.

All right, Aaron. And let me see if I can agree to disagree, but go ahead. All right, Aaron. And let me see if I can get this right. Kaimana? Kaimana. Kaimana. Kaimana. Beautiful. I knew I was going to mess it up.

Kaimana. Kaimana. Aaron and Kaimana in Maui, Hawaii. $76,000 paid off in 23 months, making $132,000 to $167,000. Count it down. Let's hear a debt-free scream. E kolu, e lua, e kahi. We're debt-free.

Yeah. Woo-hoo-hoo. Love it. Dave, they got their marriage back. We could have talked to them for another hour. They got their marriage back. Big deal. Big deal. it's incredible happens all the time when people start working together towards a common goal and they're both willing to sacrifice their selfish interest to hit the common goal

yeah whatever the common goal is whether it be uh straightening the kid out or straightening the checkbook out but we got a common goal and goal, and we're willing to give up our own little selfish interest to hit the common goal that's good for the whole house, all of a sudden, ding, ding, for their neighborhood, for their culture, for everybody. Stuff starts happening when we grow up. It's awesomeness. Well done, you guys. I'm so proud of you.

You're heroes. This is The Ramsey Show. Thanks for joining us, America. We're glad you're here. Dr. John Deloney, Ramsey personality, is my co-host today. The phone number is 888-825-5225. Bill is in South Bend, Indiana. Hi, Bill. Welcome to the Ramsey Show.

Hey, thanks for taking my call. Sure. What's up? Hey, I just got to know if Dr. Jeloni and James ever get a chance to get their guitars out and help make some of the music for some of the podcasts. James is not that good. Let's be honest.

I would love to... I'm just kidding. James is way, way, way better than me. Answers no. I was going to fix that if you didn't James is better than me one thing we don't permit here is this level of lying

he's 10x better than me but no they don't let us do that kind of stuff together we do have a battle of the bands here every year that is absolutely amazing and both of them

were in bands that lost this year so the same band oh wow we joined forces and they dressed up like 80's metal

with hair and everything it was fabulous they were just a bunch of clowns all right how can we help bill i'd love to see that okay my question is whether or not you think that my wife and i are too heavily invested in real estate and not heavy enough in other investments so here are the stats. I'm 45. My wife is 41. Our household income is 104 plus dividends from our business, plus about 30,000 from our Airbnb. And so this year we're looking at it will probably be close to 230 that we'll make. We've got, um, about 60,000 in our Roth IRAs and, uh, mutual funds. And, uh, as far as the real estate is concerned, um, it's all one big piece of real estate. So it's where we live. It's our main house. It's, uh, got 38 acres. What is your property worth? The property is worth probably between $850 and $900. Is it paid for? We owe $165 on it. Okay. And do you own other real estate? You own an Airbnb or is that

on the property? The Airbnb is on the property. Okay. So you don't own any other real estate? That's correct. Okay. And so your net worth is over a a million but almost all of it's in this property that's true okay all right it's a little lopsided but it's not the end of the world it's not going to cause you to not prosper the property's going to go up in value it is a pile of money that's not making you much money right other than the appreciation. And so, you know, before I do a bunch of improvements on that property, add another Airbnb as an example on that same property or something like that, I'm going to make sure I'm putting a good 15% of my household income into retirement, baby step four level every month, and I'm going to be working down these mortgages.

So, in other words, I wouldn't add to the real estate, but let the other stuff kind of catch up, and it will over time. I'm heavy in real estate. I've got more in real estate than I do in mutual funds, but I don't have 98% in real estate, and that's about where you're sitting. It's getting pretty close, 95%. But part of the reason I'm so heavy in real estate is I bought a whole bunch of it for a quarter on the dollar in 2008, and then it shot way up.

It recovered and then went up from there. And so the values have shot up so much faster than mutual funds since 2008 that I've made a lot more money there. So it's thrown the balance off and i've been investing in this property that we run ramsey out of which was is a lot of concrete and stuff so yeah it's okay real estate's not a bad place you just want your money to be making money and that money's not making a lot of money right now so but it's not worth saying oh you're stupid you need to sell it's a horrible idea no i mean you're just you just got a lot of money tied up it's not worth saying, oh, you're stupid. You need to sell it. It's a horrible idea. No, I mean, you've just got a lot of money tied up. It's unusual, and I would not make it worse.

Let me ask you something on this last call. He mentioned that he's got a business that he takes home a salary from, but then he pays himself dividends against that. I mean, on top of that salary, the dividends were high. Why would you do that with your business versus just paying yourself a higher salary? Or is it semantics? It's going to affect the same thing. Okay.

It's going to affect the same thing. I mean, it depends on how he's got it. It depends on his corporate structure, but more than likely, it's just he's bonusing himself profits out. Okay. And they're calling them dividends. There may be a little bit of a tax move there unless he – I hope he's not in a C Corp, but he could be in a c corp that could be

what he's doing all right ethan is in elkhart indiana hi ethan how are you i'm doing great better than i deserve right yes sir how can we help we got a another baby question for you heard a couple of those today okay uh all right i'm looking forward to being the first time father in february do things right so we had uh 21 000 our emergency fund i also saved 3200 my hsa so far the plan was that 3200 to help cover the hospital bill right well plans change like always and we found out we're having twins yeah so uh my question for you though is um what i thought we could probably have a affordable birth at you know three to four thousand um is now looking like my full deductible of twelve thousand seven hundred dollars for the year um there's a very good chance we'll meet that. Um, it's my wife's first,

first time pregnancy and, um, she's small, uh, high risk anyways. Um, my question for you is, is it acceptable to, um, take this as a payment plan when the time comes? Um, no. And use my HSA funds to do that no uh because it's tax you say no no okay because the only reason the only listen when a hospital sends you a bill it's due the only reason they put you on a payment plan is you can't pay the bill and you can pay the bill it's just an inconvenient but it's not taxed it's not it's not they don't they don't let they don't put you on a plan because it's just an inconvenient but it's not taxed it's not it's not they don't they don't let they don't put you on a plan because it's tax advantage to you they don't give a crap about that

they sent you a bill and it's due okay and people don't pay it and they put them on plans all the time but uh no i would not do that i would just pay the bill now what i would do is load your hsa as full as you can load it between now and then, and I would go sit down, if you can get an appointment in the world we live in, with the administrator of the hospital and say, what can we do to pre-plan as much of this as possible, even pre-pay some of it so that we can limit the cost? Let me give you an example of the type of thing I'm talking about. It may not apply in your situation, but here's what's running through my head.

On a traditional labor and delivery, if you do not have insurance at all, if you will go and offer to prepay the labor and delivery or prepay 50% or 60% of it before the child comes, you can get a discount as much as 50 i'm uninsured and i'm willing to pay cash but i'm going to pay a bunch of it up front how much of a discount will you give me i'm shopping hospitals to decide where to have this baby hospitals are competitive between each other to for cash to have the only thing that anyone is ever glad they went to the hospital for yes which is a baby it's the only positive time we go to the hospital right there's no other time

we go we're going to hospital right so uh you know they love this is pr for them for you to have a baby there and so they will discount heavily in a traditional labor and delivery for a cash prepay. The question is, how much of a deal like that can you get? Because you've got twins on the way, and you're not going to be able to cover it all out of the HSA, and you go, I'd like to prepay some of this. If you'll give me a discount, how much can you help me out here? First-time dad, teach me how this works.

Sitting with someone in the administration's office, you probably are going to get some kind of help from them, not because you're a charity case, but just because you were intentional and proactive, and they probably would like having you around. And get that deal in writing and have it include all of the doctors and all of the stuff, right? Yeah, yeah.

So you don't have a deal here. But, yeah, man, I love that idea. And they will work with you, work with you, work with you. Yeah you yeah and you can get you can make it that way you don't just get your you might not get the whole deductible hammered and so it might be closer to your hsa and less of your emergency fund that way that gets dinged in this but 10 years from today we had twins it hit our deductible we a check. You won't even remember it. No, man. And this is, I can't think of a better quote-unquote emergency than, hey, we're having another another kid, right?

Most emergency funds are for when things go sideways, and you got an extra blessing here, man. So that's why you have the emergency fund for, just in case. Absolutely. And this is not about tax advantage. Not in this case. So, hey, good question. Congratulations. Proud for you, man. That puts this hour of the Ramsey Show in the books. Good hour. Dr. John Deloney, good hour. James Childs, good hour. Jenna Sears on the phones for Kelly Daniels today senior producer for The Ramsey Show. Did you know over 18 million people listen to The Ramsey Show every week? And a lot of those people listen on one of our 600 plus radio stations across the country.

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