The Ramsey Show - App - When to Use Sinking Funds (Hour 2)

Episode Date: September 7, 2018

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Live from the headquarters of Ramsey Solutions, it's the Dave Ramsey Show, where debt is dumped, 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 this hour as we talk about your life and your money. The phone number is 888-825-5225. That's 888-825-5225. Donald is with us in Raleigh, North Carolina. Hi, Donald.

Welcome to the Dave Ramsey Show. Thank you, Dave. I had a quick question about VA home loans. I heard you speaking to a veteran last week about how VA home loans were not the best loan unless you're disabled. Correct. I'm a 100% disabled veteran, and I was wondering what your opinion is about a zero down, 15-year VA home loan if it reduces the total monthly payout of, you know, the mortgage is going to be $200 less than what we pay currently in rent. Not a fan of the zero down part. The VA loan itself becomes tenable because they waive the funding fee when you're disabled.

And so it starts to get rid of some of the overcharges and the excess that makes the VA loan really, really a bad loan, unless you're disabled like you are. So, but, you know, I'm going to always walk you through the baby steps regardless, and that is to be debt-free. Are you? No, we have about $30,000 in debt right now. Yeah, I would not buy a home until we clear our debt and you have your emergency fund in place. Because when you buy a home with that much debt, you're going to get into problems.

You know, the heat and air is going to go out. The water heater is going to go out. All kinds of other things. So that supposed less payment doesn't end up being less when the smoke clears on that. And the house isn't a blessing blessing it's a curse when you move in right and you have to have an extra bedroom for sally may and you know all that kind of it's just it's a bad deal so no i'd clean up your debt first build your emergency fund

of three to six months of expenses and then i'd start talking about buying and at that point when you would save up your down payment uh and so no i would not buy a house today in your situation, regardless of the VA loan discussion. Completely, you know, that's not the issue there. But hey, thanks for the call. Kevin is with us in Springfield. Hi, Kevin. How are you? Hey, I'm doing all right. Thanks for my call. Sure. What's up? You talk, in the last hour, I heard you talk about you invest in real estate and mutual funds. We live in an area, you don't gain a lot of equity over time in real estate.

I've done some rentals, I've done some flip properties. How do you make money off of this real estate? Are you buying single-family homes? Are you buying multi-units? What are you doing to draw that money in? Well, I buy income-producing properties. I mean, I've got all kinds of income-producing properties, but something where I can get rent on it of some kind,

whether it's an office building, a strip center. I've got some of those. I've got some office buildings, and we've got some single families. Do you find better return in one versus the other? No. The money's made at the buy in real estate meaning what you pay for it is what your return is on and so um you know we bought a bunch of real estate in 0809 uh i took every i squeezed every dime of cash i could find and went about because i was buying real estate for a quarter on the dollar.

I mean, it was a deal. My net worth went up so much in those two down years. It was incredible, because I stole some property. I mean, straight up stole it from some of these stupid banks. It was great. Were you buying foreclosures then? Yeah, I was buying REO stuff, real estate owned. And, you know, these banks are taking stuff back left and right because everybody's crashing, you know, in the big, horrible grand recession.

But, you know, you know the story, and it's true. More millionaires were made during the Great Depression than at any other time. And the Great Recession wasn't far behind. But even then, right now, I'm not in buying mode, partly because the market's so stinking hot it's hard to find a deal, but partly because we're building a 200,000-square-foot office building, and it's sucking all my cash to build that for our company. And so I'll have a really nice tenant there.

It's called me. Your rent comes from – Yeah, I know the guy. I can trust him. Your money is made from the rent, though. It's not made from, you know the guy. I can trust him. Your money is made from the rent, though. It's not made from, you know, quite equity or... No, it's made because my money is made from two things. One is I don't have a, you know, let's just take a single family house, for example.

Say it's a $200,000 property. We would never pay over $140,000, $150, 150 for it ever. And so it's going to cash flow. My ROI, cash on cash, when I rent that $200,000 property that I paid 140 for, is going to be great. It's probably going to be 8%, 9%, 10% cash on cash returns, plus then the equity is going to grow just because the value of real estate generally goes up over time. But I've got $50 thousand dollars equity from day one because i bought it cheap or i don't buy it and so that does two things one is it makes the

the rent to my acquisition cost ratio makes my rate of return work number one but then number two i've got instant equity and so um you know the day i bought it i could flip it if i wanted to and pull another 50 grand out of it but i don't buy i don't flip hardly anything i'm very very seldom sell a piece of real estate almost never and uh i just buy them to hold forever my kids may sell some of it someday but i don't i'll probably just keep it um and so but i just try to buy something where i'm looking at the deal on the front end, and then I can almost always make the monthly numbers work if I don't pay too much for it on the front end going in.

But so what I would do if your situation is if you're out there trying to actively buy right now, you're looking for a needle in the haystack because the market's so hot. It's very difficult to steal something in an up market like this. So just start piling up your cash and wait on the market to shift because it does shift. About the only thing you can count on is it's going to go up and it's going to go down. It's going to be exciting, and it's going to be really, you know, bad day. And so you won't be ready when it's a bad day because that's when you make your money, make your buy then. Open phones at 888-825-5225.

Thank you for joining us, America. We're glad you are with us. If you don't know, there is a wonderful Facebook community called The Ramsey Baby Steps Community. Dave, I hear so many people talking about, this is Amanda from theirs, is talking about sinking funds while they're in baby step two. I thought saving while paying off debt was a no-no. But at the same time, I don't.

If I don't, then Christmas is going to sneak up on me. I feel a little bit torn, and I really don't know what to do. Well, sinking funds for the short-term budgeted item is simply meaning you're saving up for a category. You have a Christmas fund. That's a sinking fund. Yes, you need to be saving for Christmas while you're getting out of debt, unless you're just in an extreme situation. But, you know, monthly, you ought to set something aside for Christmas

so that Christmas is going to be in December. They don't move it. It's not a surprise. You can be ready. And, you know, there's other things you need to save for. You know, car repairs, you need to build that sinking fund up. So there's a few sinking funds, and that's what's called an every dollar. But they're like little short-term savings accounts for things that we know are going to happen.

But it's not saving up to buy a car. It's not saving up to buy a couch. It's not investing for retirement. It's not saving up to buy a couch. It's not investing for retirement. It's not building your emergency fund. None of that's happening while you're in baby step two. Baby step two gets all the money, other than just your little day-to-day stuff. If you've got to save up and pay for your car insurance once a year, if you're paying for it annually, that kind of stuff you continue to do as a part of your budget. This is the Dave Ramsey Show. Did you know that if you combine the data breaches that have occurred in the past 12 months,

almost every American has had their personal info compromised or hacked. Over 50% of our listeners and viewers tell us that they or someone in their family has been a victim. And 70% of those folks have had it happen more than once. See, this is unbelievable. Once thieves get your info, the risk never goes away, and they can use it whenever and however they choose. It truly has become an issue of not if, but when. That's why the only plan I've ever recommended is through Zander Insurance. I actually sat down with them, and we put together a plan that I felt provided the best protection, but didn't waste dollars on things you could easily do yourself,

or were just gimmicks. The key is getting protected before you're a victim, and it's too late. Go to Zander.com or call 800-356-4282. We are all at risk, and it doesn't make sense to wait. Numbers don't lie. That's Zander.com or 800-356-4282. Lisa is with us in Washington, D.C. Hi, Lisa. How are you? Hey, I'm good, Dave.

So we have three kids, and they're under six years old, six and under, and I'm the nerd of the family. So I'm tracking their 529. We have one 529, the other two have ESAs, and I'm tracking them monthly. I just feel like they're not gaining enough interest, making it feel like it's doing much of a good. How much should we be looking at to see annual interest rates that they should be getting? Otherwise, we need to trade to another one, another company.

Well, I recommend you use good growth stock mutual funds inside of a 529. And so it's not technically interest rate. It would be your growth rate on the funds. And so what's that fund category doing? And what you'd look at is, in other words, what the stock market is doing. And so you would want it to be doing what the S&P 500 is doing. And if it's not keeping up with that, I don't know that I'd fool with it monthly. I don't fool with mine monthly, but about, you know, maybe twice a year, give it a look and go, hey, are these mutual funds keeping up with the overall stock market?

Now, if the overall stock market's down and your mutual funds are down, then that would be how it works, right? But if it's all up, let's say the S&P, for instance, in 2017 was up 19.9% for that year, 20%, okay, for that year. And so if your mutual funds went up 4% in 2017, you got some bad funds, you know? Okay. That's the way you do it. Yeah, our ESA, it only says, it gives us the option of very aggressive, aggressive, you know,

and stuff like that. It just says words. It doesn't give us an option to choose which fund to go to. And the 529 is pretty much about the same thing. I think we get a few funds to choose, but, you know, just a handful of that. You may have some bad ESA play. Where'd you buy this stuff? Through our bank or military, and we have everything pretty much through USA.

Yeah, no, that's the problem. You're in bank products, and that's why it's not performing. See, the 529 is not an investment. It's how the investment is treated, okay? And so in a 529, you could have like a bank savings account, which you may just have that, which would suck. It would be horrible, you know? Or you can have mutual funds inside of there. And what they're doing is they're packaging it for you and saying, well, this is aggressive.

Well, they decided everything at that point. No, you need to actually be selecting the funds inside of the ESA and actually selecting the funds inside of the 529. So you may need to move this stuff. You probably do. How does the government track that? You're moving it and you're not spending it on your own. Oh, it's a rollover. It's not a big deal.

It's just like an IRA rollover, and you can move it to a different brokerage house and get a different 529. As long as you keep it in a 529 and don't take it out, then you're okay. So what I would do is jump online at DaveRamsey.com, click on SmartVestor, enter your info. It will drop down a list of the SmartVestor pros, the brokers that we endorse in your area, and they'll sit down with you and show you, and they'll look at what you've actually got and say, okay, well, that's why you're not getting anything on it.

It's this. And if you move it over here to this, this other thing, you'd get some more on it. And so that's what needs to happen here here because I'm going to guess and say, and it's not much of a guess, I'm going to be pretty right, that you've gotten into something like just a bank savings account, and that's why it's not paying anything and you're not seeing any movement. So, yeah, you need to be actually performing. Because here's the thing, folks.

When you invest for college college is the inflation rate on college is about 7.2 percent a year overall inflation rates right about three percent right now consumer price index is but college tuition goes up a little over seven percent a year translation if you're not at least making seven percent on your money you're not even keeping up with the increasing cost of college much less saving extra money to pay for college. So you've got to outpace what it is you're saving for the inflation rate of it. And so that's why we're going to put you in good growth stock mutual funds. And, you know, again, the S&P 500 is averaged just under 12%.

And you can pick a mutual fund that has beat that, and that puts you up over 12%, and that's what I do. I pick mutual funds that have outperformed the S&P, and that'll put you up over a 12% average year in and year out, which is 5% more than tuition is going up. If it's going up at 7% and your money's going up at 12%, you're making ground. That's the point overall. So good question. Thank you for joining us.

Thomas is in Dallas. Hey, Thomas, welcome to the Dave Ramsey Show. Hey, Dave, how you doing, buddy? Better than I deserve, man. What's up? I'm here with $372,000 worth of debt after the house. What in the world? Yes, two graduate degrees, one bachelor's paid off between me and my wife.

So how much you got in student loan debt? Together, $260,000. Who's the doctor, lawyer? No one's a doctor. Good lawyer? No one's a doctor Good lord What'd you get your degrees in? We both have MBAs Okay, well that's decent

But god, that's a lot of money for a freaking MBA So what's your household income? Before bonuses, 132 With bonuses, what's your household income? With bonuses, $132. With bonuses. What's your household income? With bonuses, $143. Okay. And how long have you had your MBAs? I graduated in 16.

My wife graduated 17. Both of you working? Yes. Okay. So your career should be on a pretty steep incline. Hopefully, you know, your $140 is going to turn to turn into 240 in the next three to five years. Agreed? Agreed.

Our trajectory looks pretty good. My wife actually got a pretty decent raise this year. So if the tree keeps going, we'll be in a good spot. It needs to because we've got to get some kind of return on investment that you learned about getting your MPA on that MBA because you sure did spend for it. So, yeah, beans and rice, dude. You put this thing on a tight budget, no life. You don't walk around looking like people making $150. You walk around looking like people making $40, and you start throwing everything but the kitchen sink out of your house at this debt.

List your debts, smallest to largest. Other than the student loan debt, what kind of this debt, list your debts smallest to largest. Other than the student loan debt, what kind of debts have you got? Not counting the house. Looking at my Excel sheet here, we have credit cards, car loans, and line of credit. How much do you owe in your cars? Cars, we're at $51,500. $51,000 were the cars yeah not anymore that's insanity okay it's insanity if you make 140 000 to have that much tied up in cars number one but it's double insanity with 200 000 worth of student loan data and make 140 000

does that make sense to you when I say that out loud? No, it makes a lot of sense. In fact, I've only been following you now for about a week and a half. Okay. And I regret my decision to get those cars. Well, one of them should be paid for now, but I've refinanced it, so I'm going to just double up on payment. No, let's just sell them.

Sell them both. Get you a couple of beaters. You guys are broke, man. You start acting like it. Okay. You've got to get radical. You have a very, very tenuous situation. Your cash flow has got to be tight.

I mean, it's got to be tight. I mean, you got to be a hard, it's got to be hard to breathe around your house. And so, which is what drove you to listen to me. So here's what I have found. Personal finance is 80% behavior. It's only 20% head knowledge. And the more radical and dramatic that your emotions become around the issue of getting out of debt, the deeper you will cut. The deeper you cut mathematically causes you to be getting out faster. And so you play with this. You just kind of go, I'm just going to take you forever.

But if you will cut all the way the bone and just, you know, your broke friends start making fun of you, your mother thinks you joined a cult. I mean, you get crazy around there. You can get this mess cleaned up. But, dude, you have a serious mess. Wow. Hold on. I'm going to send you a copy of the book, The Total Money Makeover, to help you walk through this.

This is The Dave Ramsey Show. Thank you. David and Brandy are with us. Hey, guys, how are you? Good. How are you, Dave? Better than I deserve. Dallas, Texas, it says on my screen you're debt-free. Congratulations. Thank you. Is it Brandy?

Is that correct? It's actually Brandis. Brandis. Okay. You got it. I couldn't see it on my screen very clearly. Okay, cool. So how much debt have you all paid off?

A little over $53,000. Cool. And how long did that take you? About 17 months. Good for you. And your range of income during that time? We started off with $90,000. We made it up to $107,000, $170,000, and now we're at $115,000.

$170,000 and then down to $115,000. Very cool. So $107,000 to $170,000 and then down to $115,000. Very cool. So $107,000 to $115,000. Oh, to $150,000. Oh, okay. Wow. Jump, jump, jump. Big jumps.

Yeah. 17 months. Very cool. So what kind of debt was this $53,000? It was a lot of student loans. We had car vehicles, and then we had a lot of credit card debt, about $9,000 of that. Okay, very cool. So what happened 17 months ago that got you guys lit up and on fire to get out of debt?

Well, it was probably me first, because I remember receiving a pretty decent bonus from work. And I went through the pain of just having to give my whole bonus to the credit card company. And so I just started researching information online. And that's when I found you and basically went crazy and brought it home to David and told him he only had $50 to use for lunch and that we're going on a budget. Uh-oh. This is not the way to introduce this to your spouse. Right.

You get a rebellion. Oh, David, you must have thought she'd gone nuts. Yeah, just for the first time that she introduced me, I was a little bit afraid because I was like, what am I going to eat? Or how am I going to eat if I don't have lunch money? So it was tough. Yeah, very cool. Fun. So you just dove in and started the baby steps then?

Yes, exactly. Yeah, David was like, who is this guy? Like, why are you always listening to him? He just didn't understand it. And I think the breakthrough was when we logged into, I got him connected on his phone and my phone to the EveryDollar app. started using that religiously um paying things off like daily communication we could both see it and that's really what really helped us get through a lot of it wow very cool you guys congratulations so how's it feel to have no debt and we're still trying to get used to it i mean we've been through quite a bit even like during this journey. I remember David even just working several hours a week, like 80 to 90 hours. But we're still just trying to soak it all in and really enjoy it. And we just thank God for everything that he's given us.

Without him, we couldn't have done it. I think we're still with rice and beans. We still have that. Well, now you can go out to eat. I think you're in good shape and beans. We still have that. Well, now you can go out to eat. I think you're in good shape, making $150 and no debt. Well done, you guys. What do you tell people the key to getting out of debt is? Well, for me, we're making budgeting an ongoing habit together,

so just ensuring we're on the same page um talking about what we agree on what what can wait and just really just not having any having any secrets david what about you um a little bit um did like what she said i mean i'm out i think out of everything, just have faith. Thanks, God, for pretty much everything that you've been giving. A lot of, you know, goals that we set for our family, for our future, so that kind of like, you know, it helps out. It helps out a lot whenever we have that kind of mentality. What do you guys do for a living?

What was that, sir? What do you guys do for a living? What was that, sir? What do you all do for a living? Oh, I work as a sales executive for Marriott International. And I work at Hudson Groups. It's a company based out of the airport. So they have a lot of stores that they own inside of the airport. And I'm like a team leader. So I get pretty good. I do a lot of labor that they own inside of the airport, and I'm like a team leader. So I get pretty good. I do a lot of labor.

I got you. Okay, cool. Very cool. Yeah, we know Hudson. They sell books for us in the airports. We work with you guys all the time. Well, congrats. Very well done.

We got a copy of Chris Hogan's book for you, Retire Inspired, and we want that to be the next chapter in your story. I think it will be that you're millionaires, and that you become and stay outrageously generous as you go along. So, very, very well done. David and Brandis, Dallas, Texas, $53,000 paid off in 17 months, making $90,000 all the way up to $150,000, working their tails off. Count it down.

Let's hear a debt-free scream. Three, two, one. We are debt-free! This is how it's done. Love it. Diane is in Harrisburg, Pennsylvania. Hi, Dianeiane how are you hi dave thanks for taking my call i'm grateful for you well i'm honored thanks how can i help well i'm a 54 year old woman single woman i have about 40 000 that i moved from a vanguard account to an investment professional.

And I'm playing a little bit of catch-up, obviously. He did a profile on me and said that I was a moderately aggressive investor. And I know that you're an aggressive investor, Dave. So I'm wondering, with the split that he gave me, saying he wanted to put 13% in bonds which could be uh etf he said they could be mutual funds um two percent cash and 85 percent stock fund i'm wondering what you say about that since he says i'm moderately aggressive and that i don't fall under aggressive investor profile. I don't believe any of that crap. Okay.

So I basically tell everyone, and I do the same thing, by the way, to invest, there are many, in four types of mutual funds, growth, growth and income, aggressive growth, and international. And that will out and buy mutual funds that are outperforming the S&P 500 and ride them out. And that's how people build wealth. You know, this idea that we're going to play footsie with your feelings is not a plan.

I don't care what your feelings are. I want you to grow your understanding of how investments work and understand that when you buy the group of mutual funds I just talked about, he would classify that as aggressive. I don't give a crap how he does it. That group of mutual funds is more stable than the home you own. So I don't know how in the flip you call that aggressive, but some of these characters and their little formulas in the home you own. So I don't know how in the flip you call that aggressive,

but some of these characters and their little formulas and crap that they do in the financial world have dreamed up all this stuff to try to do a risk analysis, a risk assessment, and what is your risk tolerance and all this kind of stuff. And basically, you know what? Your risk tolerance changes as you know, as you understand what's going on. And your knowledge base can increase your risk tolerance.

You know, when you first start driving a car, your risk tolerance for driving a car, you're nervous and scared. You don't know how to drive a car. You don't have any risk tolerance. That's how I am right now with this. But that doesn't mean you don't drive a car. You still start driving the car. And you know what? The more you drive the car, the less you're stressed out about it.

And risk tolerance goes up. You tolerate the risk of automobiles being around you. You tolerate the risk of driving at a higher speed than 30 miles an hour. And, you know, that kind of thing. And that, you know, but no, we're going to buy you a car that doesn't go over 30 because you're stressed as a new driver.

Horse crap. So, not doing that. No. Go to DaveRamsey.com, click on SmartVestor, and get one of our SmartVestor Pros that we endorse, and they'll help you get out of this mess. This is the Dave Ramsey Show. Thank you for joining us. We're glad you're here. Well, we've already pre-sold almost 15,000, and it's just about a month we've been selling them now. The book actually comes out in January of the new book by Chris Hogan,

Everyday Millionaires, How Ordinary People Built Extraordinary Wealth and How You Can Too. It's the findings of a study that Chris, our team, and an outside research firm did on what has become the largest study of millionaires ever done. And what are the attributes, habits, and processes that millionaires have, and how did they become millionaires? Did they inherit their money like a lot of people believe? No, they didn't. Over 90% are not millionaires because of an inheritance. Just like that. Are they people of privilege? Nope. They're men.

They're women. They're black. They're white. They're Asian. They're Hispanic. Find a pretty even distribution, as a matter of fact. So it must be about something else, then, other than you're a victim. Oh, it's about what you do with your money that makes you a millionaire.

Huh, go figure. Who would have thought that? Yep. So if you want to know about this stuff, it's pretty cool. Al has got a $1.5 million net worth. He's one of the millionaires we studied. I'm living proof that you can come from a poor family with terrible money habits growing up, but with education, hard work, and an intentional plan, you can create wealth and change your family tree.

I'm a strong believer that you create your own destiny. There you go. This book's $20. Again, it comes out in January. Why would you buy a book today that comes out in January? Because we're going to bribe you. We're going to give you a lot of good stuff if you preorder. And about $50 worth of stuff.

We're going to throw in the audio book as read by the author, Chris Hogan. And you know that Barry White voice, he'll be glad you listen to that. And the e-book, the Everyday Millionaire e-book. You get all of that in January. Right immediately, though, we're going to send you a video lesson from Chris on how to retire inspired. And a lesson from me on video called It's Okay to Be Wealthy. Ta-da. So check it out, DaveRamsey.com or ChrisHogan360.com,

and you will be able to get the book pre-ordered and get the deal on the, get all the stuff thrown in, the $50 worth of stuff because you pre-ordered. Dimitrica is with us in Dallas. Hi, Demetrika. How are you? Hi, Dave. How can I help? I have a question about my military TSP.

Currently, I'm in Baby Step 2, and I was in the military, and I'm out, and I had a TSP account. My current job is a federal job I have, and I have a TSP account with my federal job, and I rolled over all that I could of my military TSP into my federal TSP. Okay. But I had some money left over in a military TSP that cannot be rolled over, and I was told that it was tax-deferred. I don't know if I'm saying that right. But it's like $3,800 of it can't be rolled over into another retirement account,

and I won't be taxed if I take the money out. I believe it's because when I started the TSP, I was overseas, deployed overseas. It was tax-free money when I put it in there. So my question is, what should I do with the money? Yeah, you can't keep that inside of the retirement plan. It's not technically inside the retirement plan anyway. So I'll just go ahead and pull that out and throw it at your – there's no penalty and no taxes on it, right? Yeah. Yeah, I'll just pull it out and throw it at your dad. Oh, really?

Yep. Yeah, you're working your baby step two, and let's throw that at that. That's not a retirement account. You meant for it to be, but it's not in there because of the situation you were in. And so, yeah, pull it out and do that. Thank you for your service, too. Penny's with us in Galveston, Texas. Hi, Penny.

How are you? I'm great. Thank you for taking the phone call. Sure. What's up? Well, I'm turning 53 next month. And back in 2015, I kind of got the wind knocked out of me my parents died both of them six weeks apart well the job i was working at a non-profit closed had to move three times so it wiped out every bit of whatever i had taken before just to survive

so between being depressed and everything, I took a job as a property manager at a storage facility where I'm rent-free, utility-free. But the pay is only about $25,000 a year. And I'm about $30,000 in debt. And I've been putting in about a little bit of money into a 401k because they match up to 3% or 4%. My greatest fear in all this is I don't make enough money a little bit of money into a 401k because they match up to three or four percent my greatest fear in all this is i don't make enough money that if i choose to buy i choose to get another job

i don't make enough um to save up for moving expenses or i do but i'm already on a shoestring budget um it would take me six months to a year just to get enough to move into a new place to take a new job. And my greatest fear is when I hit retirement, should I stay where I'm at and save up everything I've got, or do I move away from here and try and find a place? Because having a home when I retire is my greatest fear. I mean, I do, I do, I'm a freelance copywriter on the side and fundraising consultant and things like that, but I haven't been able to do it here lately just because I'm just now, after the last two years, getting back in the right state of mind and writing again and things of that nature to make extra cash.

Good. Okay. Well, I think what you need to do, the first thing we need to do is when you say, okay, you're 53, in the next three to five years, what are we going to be doing different than we're doing now income and career-wise to get your income up? Yeah. You don't make any money. No, and that's why I've gone back. I'm getting recertified for copywriting, and I'm getting my skills backed up. I have a website up now. Let's get you back up to $70,000 a year, $80,000 a year, and clean up your $30,000 in debt. And, I mean, you took this thing as a place to heal

and a place to get your feet back under you. It did that. Yeah. But you can't stay there. No, and that's what the fear is. It's not a fear. It's nothing to be afraid of. It's an adventure.

It's awesome. The good news is you. It's nothing to be afraid of. It's an adventure. It's awesome. The good news is you're worth more than $35,000, and we need to go out in the marketplace and prove it. You need to get your certifications and get your stuff going. Let's get your income back up and move out of there. And as your income starts climbing and you get you a place to rent, you get your $30,000 paid off, we start plowing money into that 401K at the new place and Roth IRAs and load them up and get you a nest egg, start going, and start talking about saving up for a good down payment on a house

and get you a little starter house to get going and something that you can get paid off in your 60s and 70s. And, yeah, I can see you having a paid-off home and a nice little nest egg at 70 years old. And that gives us 17 years. But we've got to get your income up to force all that to happen. And so where I'm going to spend all my energy is zero on worry. Worry doesn't produce anything. Zero on fear.

Fear does not produce anything. I'm going to spend 100 100 of my energy right now on working my career track if i'm in your shoes getting your income up deciding what you can do what you should do that makes you more money and let's move towards that as quickly and as solidly as possible hey good question you got this kid you can do it you call me back while you're on your adventure we'll talk again i'll me back while you're on your adventure. We'll talk again. I'll help you.

But you're going to have to get with it. You can't just sit there. This was a safe place to heal. It is not a safe place to stay because you don't make enough. Good question. Again, I think I see bright things for you. Open phones at 888-825-5225. Dave, I know you don't recommend an annuity, Nicky says, I see bright things for you. Open phones at 888-825-5225.

Dave, I know you don't recommend an annuity, Nikki says, from the Ramsey Baby Steps community on Facebook, but I don't have a choice. My 7-year-old is getting a structured settlement. Can you give me some suggestions on how to structure the payouts as much as possible, as quick as possible, and if they force an annuity, push it towards a variable annuity where you've got mutual funds inside the annuity that it's invested in. At least then it'll give a decent rate of return. To get the money as fast as you can get it, not to spend it, but to reinvest it and get it out of their control.

Hope that helps you. That puts this hour of the Dave Ramsey Show in the books. But you'll find more on our YouTube channel where we have over 6 million YouTube views each month You can find debt-free screams millionaire hour clips Dave rants and so much more go check it out