The Ramsey Show - App - When You're Debt-Free, You Can Take the Job That You Want (Hour 3)

Episode Date: December 2, 2019

Home Selling, Debt, Home Buying, Retirement, Insurance Tools to get you started:  Debt Calculator: http://bit.ly/2QIoSPV Insurance Coverage Checkup: http://bit.ly/2BrqEuo Complete Guide to Budgeting: http://bit.ly/2QEyonc Interview Guide: http://bit.ly/2BuGnZE Check out other podcasts in the Ramsey Network: http://bit.ly/2JgzaQR 

Live from the headquarters of Ramsey Solutions, broadcasting from the Dollar Car Rental Studios, it's the Dave Ramsey Show, where debt is dumb, cash is king, and the paid off home mortgage has taken the place of the BMW as the status symbol of choice. Merry Christmas, America. We're glad you're with us. Open phones at 888-825-5225. That's 888-825-5225. Thank you for joining us. Jay starts, I'm sorry, Tyler starts off this hour in Pennsylvania. Hi, Tyler, how are you? I'm good, Dave. How are you? Better than I deserve. What's up?

This is really cool to talk to you. I've been a huge fan for a couple of years. My question is that my wife and I are on baby steps four, five, and six, and we did something stupid a couple of years ago. We bought a home on a VA mortgage that was a little bit expensive for us. We were both working at the time, and now I'm the only one who's working. And my question is if we should sell the home and then buy something, you know, a little bit better within our price range. How much is your payment?

Right now it's 1785 a month. What is your take home pay a month? Right now? Well, I work a lot of overtime right now. It's about right around $9,000 a month. Okay. Well, our suggestion is you keep your house payment less than 25% of your take-home pay, and you've certainly done that. Well, my job's also changing.

We're kind of in the middle of some contract negotiations, and it'll probably go down a little bit because I won't have to take so much call. So I'm thinking worst-case scenario, it might go down to like $6,000 or $7,000 a month. Okay. Well, $7,000 would put you at 25%. And so you're not out of line there. If you want to sell your house, you can sell your house. I don't care.

It doesn't matter to me. But it's not killing you. You're not calling me up with a house payment that's 50% of your take-home pay or something like that. It's really not giving you fits. Now, if you're not able to make the progress that you want to make and you want to move down, well, I don't have any problem with that at all. And, you know, if you do make a move, always do a conventional loan, not a VA. A VA loan is one of the more expensive loans out there in terms of fees, interest rates, all the gotchas involved and everything else, which is kind of sad because it's designed to be a benefit to veterans that have served their country, and it's actually not. So avoid it, veterans and active duty people. It's not a deal. It's not a deal.

But anyway, in your case, you're there. I wouldn't sweat it. But if you do want to move, then take out a conventional the next time around. All right. Open phones at 888-825-5225. Open phones at 888-825-5225. Jose is phones at 888-825-5225. Jose is with us in Florida. Hi, Jose.

How are you? Hi, Dave. Thanks for taking my call. Sure. What's up? So I'm going to be graduating college in May. I have really great parents that push no debt or no credit card debt, no loan. So I don't have any student loans or credit card debt.

I've lived at home all of college. I was given a $10,000 mutual fund about 10 years ago that has grown to $16,000, $17,000 that I was told I can't touch until I graduate. But the one problem is I just leased a car. Why would you do that? I don't know. Okay. I forgot to mention I have about $5,000 in the bank. I'm sorry? I also forgot to mention that I have about $5,000 in the bank. Okay. So when did you lease the car? Two months ago. Why don't you just sell it? How do you get out of a lease? Well, you'll have to pay the difference of what you owe and what the uh when you call the lease company who did you lease it from honda oh god okay well call honda and ask them what the early buyout is on this thing and then compare it to kelly blue book of what you can sell it for and that's how much you're already in the hole. So what was the sticker value of this stupid butt car?

The MSRP was $27,000. Oh, good Lord. And what do you make a year? I make about $12,000 a year. I put $4,500 down, and my monthly payment is $200. And your parents didn't just want to just box your ears after they taught you better uh honestly after listening to you they're not very happy i thought you said they've been following me for a long time uh well i'm not happy i don't know how

honda approves somebody making twelve thousand dollars a year for a twenty seven thousand dollar car lease that's just immoral. I co-signed it with my mom. Okay. Yeah, there's like a whole stack of dumb things here, kiddo. I'm not going to pick on you anymore. I'm not going to be mean to you. I know.

But you've got to get out of this, okay? It's a mess. You should not have co-signed. You should not have leased. You should not have bought a car you can't pay cash for. All of these things are going to be very detrimental to you. And you graduate when? May.

May. And what's your degree in? I'm going to be going into marketing. Good. Okay, cool. Good. So we'll get out and get a good job. And so the way to get out of this is you call honda and you ask them

what the early buyout is meaning if you were going to pay off the lease in one fell swoop what would it be my guess is it's probably going to be 25 26 000 okay and then you look up on Kelley Blue Book, kbb.com, for private sale of what you can sell a two-month-old Honda for. And I hope that is close to $26,000 or $27,000. Let's pretend, just to give you an example how the numbers work, that the early buyout is $26,000 and you find the value to be $23,000. You would sell the car to someone for $23,000. You would take $3,000 out of your checking account, your savings account, and pay the difference and get out of this mess.

You've already taken a hit that every day that you stay in this thing is going to be a deeper, deeper, deeper hole. So when I take three out of my savings, I only have two left. What do I do for another car uh you get a hoopty until you get out of school and you got the 16 000 in your mutual fund the mutual fund is is just morally like the mutual fund though do what did i even touch the mutual fund if you can you get to it now i can yeah but i i kind of wanted to not touch it yeah i kind of

i kind of wanted you to not lease a car or two um and get your mother to co-sign a car for twenty seven thousand dollars when you make twelve so yeah you've you you know this is going to cost you the bad news is you've made a huge mistake the great news is you'll never have to make it again and you're young and you got this mistake behind you. I've done so many stupid things and still made it and you'll be okay long term. So take three or four thousand bucks out of your mutual fund and buy you a three or four thousand dollar car after you get rid of this Honda. But I would get rid of this Honda. And keep the two in the checking. I'm sorry? And keep the two grand in the checking. Yeah, yeah.

I mean, fine. Whatever you've got to do. Get you a little car of some kind. You don't go buy a $15,000 car with your mutual fund. You go buy a $2,000 or $3,000 car for cash that's not real pretty, but that is very reliable. And you get rid of the $27,000 Honda lease co-signed by your mother.

Bless your heart. This is The Dave Ramsey Show. Over the years, I've seen so many families suffer by not having life insurance. It's not that they didn't care. It's just that they didn't know, so they did nothing. That's a huge mistake. Listen, husbands and wives, moms and dads, think about it. If you died, how would your family pay the bills, the mortgage, food, and plan for a better future? This is what life insurance is all about, and term life is the only way to go.

It's not expensive, and it's not complicated. Stop wasting money on cash value plans. You need 10 to 12 times your income in protection and I recommend 15 or 20 year level plans. I also only recommend Zander Insurance and I have for over 20 years. These are the only people I personally use and they only offer the plans I recommend. Call them at 800-356-4282 or get instant quotes online at zander.com. Trust me, these simple steps will let your family know how much you care. Thank you for joining us, America. This is the Dave Ramsey Show. Austin is with us.

Austin is in Kentucky. Welcome to the show. Austin, how can I help? Hi, Dave. It's good to talk to you. I was just calling. Welcome to the show, Dawson. How can I help? Hi, Dave. It's good to talk to you. I was just calling. So my wife and I have been listening to you, just started listening to you in the last couple months.

And you've pretty much convinced us to get rid of our credit cards. I was just wondering, the only reason we were kind of hanging on to them is because we wanted to maintain a decent credit score for the possibility of getting a mortgage. But then I was reading more into what you had to say about manual underwriting and how some companies are able to give you a mortgage without a credit score. So I guess I was wondering, I know you've also said that it's either good to have a good credit score or to have zero. And so I do have some student loans. And so I was wondering if I need to wait until I pay off all my student loans to close my credit cards so that I can maintain a good credit score or just how that would affect my score if I were to close all those accounts right now. Once every single account that you have is at zero and is closed, somewhere around six months later your score will disappear. Okay.

And so closing your credit cards now doesn't hurt that. Really the clock starts when you get student loans paid off. Okay. And so leaving them open doesn't benefit you unless you were not going to follow our plan and go buy a house while you still have student loans, but that's not something we

would suggest. Okay. All right. That makes sense. You see how the logistics work on that? Yeah. Yeah, I think so. I just wanted to make sure it wasn't going to have a negative effect and hurt my score. It will. I wanted to either have it good or zero. Yeah, it will. It'll cause it to go down as soon as you close those accounts.

But you'll still have a score as long as you have those student loans open. But when you pay them to zero and those accounts are zeroed and there's zero account anywhere on your credit bureau open, there's no activity of any kind. The only thing you've got is the history. Somewhere around six months later, your score will go to zero. That's been our experience. Now, FICO can change that tomorrow.

We don't know. That's not a rule. It's not a law. It's not a regulation. It's not a law. It's not a regulation. It's not in print. It's just what we've observed them doing. Okay. So that's what you're getting into.

But that's the land I would go to if I were in your shoes. It's how I would do it. Hey, thanks for the call. Jalen is in New Mexico. Hi, Jalen. How are you? Hi. Good.

How are you? Better than I deserve. What's up? So I just have a real quick question for you. Can you hear me okay? Yeah, you're kind of echoing. Are you speaking directly into your phone? You don't have me on speaker, do you? No, I don't.

Is this a little bit better for you? Much better. Thank you. Awesome. How can I help? Just a quick question. So I have two loans left that I just currently paid off my cell phone. So we're slowly making progress on that. So I have my vehicle loan, which is,

I sell about $12,500 on it. And then I have a student loan that I'm just going to start paying on in December. And it's only like $100 short of $6,000. Okay. Kind of a weird situation. I work about an hour away from where I live, so I spend about $500 in gas a month. Do you think I should try and get rid of my car to reduce the car payment? I know I still pay for the gas. What's your household income?

What do you make? About $36 between me and my husband and he works nearby where you live he works at home so he he has his own business do you own your home no we are staying it's kind of like a family inheritance so you're staying in a situation with no rent? Correct. So you're trading no rent for a $500 gas bill? Yes. Okay. And why are you only making $36,000 between the two of you?

What do you make? I'm only making about $1020 an hour before taxes, and then he just started off not even a year ago so he's making he's only about 1500 a month right now okay i'm not sure i would drive an hour for that job do you live in a very you live in an extremely rural area or something yes Yes, very small. I don't know if you've heard of Miami, New Mexico. Okay. Well, I was guessing since you're driving an hour in for a $10 job,

so I was guessing there wasn't one in your immediate area. And I've been working on, you know, applying for different positions that are a little bit closer to home, but, you know, that takes time. And how old are you guys? I am 20 and he's 21. So what are your career goals? What are you going to be doing in five years?

Five years I would like to obtain my business degree and eventually be helping him out at home or have my own business as well. And what will his business be doing by then? Hopefully it would be booming really good. I mean, he's doing really good right now. He's a welder, but also like a, I don't want to say construction, but he builds like fences and stuff like that around the area. Okay.

Like a handyman type stuff. Okay. Yeah, yeah. Okay. Like a handyman type stuff. Okay. Yeah. Yeah. Okay. Well, the big thing is I just want you to have a goal to increase your income, to have a career goal that is very systematic and not a dream, but that is something that's very clear. It's causing your income to go up. Um, but I think you just take your $18,000 in debt making $36,000. Both of you work as much as you can work doing anything. Get on a tight budget, and let's just clean them up. The car is not killing me here. If you want to move down in car, you can,

but as much time as you're spending in that car, I don't want you moving down much in car. Sure. Because, I mean, that's a long, you know, you're driving two hours a day. And so you're. About 100 miles a day, too. So you're destroying it in terms of its value, because when you put that many miles on it, it loses value very quickly. But, you know, that's part of the reason I'm asking this.

So five years from today, I would have both of you, the two of you together making 70,000. You're probably living in a completely different place because I don't think you're going to live here in an area where there's no economic activity that allows you both to prosper. And so the free house is costing you a ton. If you could move to quote, move to town and both of your incomes double, I'd move you to town tomorrow, uh, and get rid of that commute. But that would be based on, you know, having some opportunities there that would give you a reason to think you were doing that. So either his, his, uh, business increased there and, uh, whatever, but I really, you know, you can do what you want to do.

It's your life. But I want to see you prospering financially, and that is going to involve you guys increasing your income. So, hey, good question. Janice is in Idaho. Hey, Janice, welcome to the Dave Ramsey Show. Thank you. Thank you for taking my call.

Sure. What's up? Well, we got into buying a new house. It's being built and it took $7,500 down. Then I started listening to your programs and I think that we're buying too much house because we are now finally for the first time debt-free. And we have like $160,000. So the house is $550,000. I'm thinking maybe we should pull out, take the hit for the $7,500,000, but not get ourselves into a situation where it's too expensive. So your household income is what?

$8,800 a month. Okay. Take home. Okay. And so you're making like $140 a year, $150 a year? Right. And you bought a $550,000 house and you're under contract and you made these people a promise and based on that they're building you a new house? and you bought a $550,000 house and you're under contract and you made these people a promise,

and based on that they're building you a new house? They're a production builder, so they were already building it, and it's like a reservation fee of $7,500. So if you pull out, you lose that, basically. Well, no, that's not it. I mean, you can be sued for specific performance on the contract. You probably have to sit down with them and ask them under what situation they would let you out of the contract and find out what you've got there. If they will let you out and you want to walk away from $7,000 to keep from making a mistake, that's okay. We'll be right back. In the lobby of Ramsey Solutions on the debt-free stage, Austin is with us.

Hey, Austin, how are you? I'm doing good. How are you? Better than I deserve. Where do you live, sir? Louisville, Kentucky. Very cool. Well, welcome. And here to Nashville to do a debt-free scream. Yep. Love it. How much have you paid off?

$84,000. Woo! And how long did this take? 30 months. Good for you. And your range of income during that time? I started about $70,000 and got up to $117,000. Whoa!

What do you do for a living? Well, at the time I was in medical sales, but then when I paid off the debt, I actually left that job. Oh, okay. Cool. What do you do now? Full-time photography and videography. Okay.

So living the dream now that you don't have to make the money. Exactly. Now I have choices to do what I want. There you go. The medical sales kept you on the road all the time. It did. So I got to listen to you for three hours a day every day. Yep.

And now you got to work. Yep. Very good. What kind of debt was the $84,000? So it was all student loans. Wow. What was your degree in? Landscape architecture.

Okay, cool. Which leads you straight to photography. Yeah. I use it every day. Well, you probably actually do. I tell people I do. It is. It's design and, you know, it's still the ability to see things.

Exactly. It's obviously your natural gifting area. Good for you, man. Well done. So what happened 30 months ago that lit you on fire? ability to see things. Exactly. It's obviously your natural gifting area. Good for you, man. Well done. So what happened 30 months ago that lit you on fire? A few months before that, I was working my first job out of college, which wasn't the medical sales. And it was Christmas time. And my older sister gave me your book for Christmas. And they kind of gave it to me. And they were like, I think we're more scared for your future than you are. And I was like, I don't really even know what you mean. But that's the first time that I heard your name. And so about six months after that is when I

decided that this is something I'm going to need to tackle now and not later. And then it still took me another six months to get started. So I didn't start until January of 2017. Okay. What finally flipped the switch and you said game on? I tried to start thinking about my future and the things that I could do for myself and my spouse and my kids before I ever had them. And I felt like the best way to serve them in the future was to take care of that stuff now. Because I know how much of a burden it was for me. I don't wish it upon anybody.

But I thought if I could take care of it now, then that would be the best way I could love somebody in the future. Gotcha. Where'd you get your degree from? University of Kentucky. Okay. Good for you. Very cool. Yeah.

Very cool. And so I'm guessing among the cheerleaders were your sister. Yep. So I got three sisters. Only one of them is here today. Okay. And my I'm guessing among the cheerleaders were your sister. Yep. So I got three sisters. Only one of them's here today. Okay. And my girlfriend and parents.

The funny thing is we all grew up knowing that we were going to have to pay for college. So there was four of us. So I kind of felt like, you know what, this is going to be okay. We're all going to pay for college. And all three of my sisters had full rides for volleyball for school. So they didn't pay a dime for school. And then I was left with $84,000. I was like, all right, well, hopefully I can figure this out. I'm thinking you got the short end of the stick.

I may be wrong. It's been a good thing, though. Well, it sets you up because there's something about plowing through a goal this big, climbing a mountain this tall, that gives you a sense of dignity, a sense of empowerment, a sense of confidence to tackle other stuff. Right. Like, for instance, walking out on the job and going to start your own gig. Yeah, it was a big decision, but it was also an easy decision. I kind of knew that the job that I had that leverage to pay off this loans wasn't a long-term plan. Um, and it gave me the ability to start my own business. But, uh, the

hardest part I think was just back in the beginning, it was just starting. Cause I, it took me a year once I was even kind of bought in on what I needed to do to, to, to just start yeah um and then once i started it was it was fun yeah became a game then it did yeah so what do you tell people the secret to getting out of debt is um i think you've got to find that community and that support for me because i was on the road so much uh it was really just your show and and hearing debt-free screams. That's why it's so cool to be here today because it meant like three times a day I was just driving my car and I was like literally about to go in a meeting and I was like crying in my car. So it means a lot to be here today. And as a single man, it was hard to find that support and community just on day-to-day as I was working.

So I just advise anybody to do it, to just find some people to tag along just for that support. So the radio show, the podcast, the YouTube, whatever. Yeah, just to get the message around you continually. Yep. Yeah. And you can plug into Facebook groups. You can plug into everything else. You weren't likely to do that, though.

So very cool. Good for you, man. Very well done. What was the hardest part? Two and a half years is long. It was so long. It was hard to start, and then it became really fun. But about halfway through it, when I had paid off about $40,000 and still had $40,000 to go,

that was probably the hardest part during the journey because I had felt like I had given up so much. I wasn't buying a house and all these kinds of things that mid-20, 20-year-olds were doing on that kind of income. And then to have to do it again and pay another $40,000 was just, it was a lot. But then once I hit around, I'd say the 25,000 mark, it was like nothing. You could see the light at the end of the tunnel then. That's not a train. We're going to make it. It is weird after you run a half marathon,

when you get within 500 yards of the finish line, you find something left in the tank, and you can sprint that last 100 yards, 500 yards, whatever it is. There's something left there. As long as you can see the end, and you can see it, you can do that. That's pretty cool. Well, well done, sir. Thank you.

Very well done. You brought the whole cheering squad with you. Yep. That's a good thing. That's a good support group. Very good. Well, we've got a copy of Chris Hogan's book for you, Everyday Millionaires.

You're going to be one. That's the next chapter in your story, so keep playing. You don't have to keep playing with this level of intensity. Now you can let your foot off the gas, but stay intentional, watch what you're doing, and you'll join the ranks of the EDMs, the everyday millionaires, before you know it. Proud of you, man. Thank you. Congratulations, hero.

Well done. All right, Austin in Louisville, Kentucky, $84,000 paid off in 30 months, making $70,000 to $117,000. Count it down. Let's hear a debt-free scream. Three, two, one. I'm debt-free! Yeah! Woo-hoo!

Love it! Well done. Well done, sir. Very proud of you. Excellent, excellent job. Well, it is Cyber Monday. And I just saw a news report a while ago that Black Friday sales were up 22.3% over last year. Does anybody remember?

Gosh, it seems like yesterday, but it must have been five years ago, six years ago, when we're coming out of that 08 debacle and sales were up 2% year over year. Christmas sales were up 2%. And the merchants and the Wall Street people were all screaming like they were dying. Like, oh, the economy is so bad. Sales were up. But they're screaming like they were dying. And now they're up 22.3%. It's the largest Black Friday in history.

Wow. Well, we've got our stuff on DaveRamsey.com as well. And obviously, we're not going to tell you to go into debt to buy it because we tell you to use your debit card, right? And so that kind of stuff. And we've got $10 sales are going. Beautiful stuff. The Total Money Makeover.

Almost every one of our best-selling books on sale for $10. Financial Peace University is a great gift. How many people we hear on these debt-free screens that someone gave them Financial Peace University for Christmas? It's everywhere. So this is actually a gift that will cause more generosity to happen later. Think about it. How many gifts can you give that cause someone to give more later?

This stuff does that. Check it out at DaveRamsey.com or call the Ramsey Concierge team at 888-22-PEACE and the Cyber Monday deals are there. They end on Sunday, which makes no sense to me. If it's Cyber Monday,

shouldn't it end on Monday? But it runs all. If it's Cyber Monday, shouldn't it end on Monday? But it runs all week because it's Cyber Monday. I don't know how this stuff works. Anyway, I guess we're just one of them people. This is the Dave Ramsey Show. Thank you. Our scripture of the day, James 1, 12. Blessed is the man who remains steadfast under trial, for when he has stood the test, he will receive the crown of life which God has promised to those who love him. Ralph Waldo Emerson said,

Without ambition, one starts nothing. Without work, one finishes nothing. The prize will not be sent to you. You have to win it. Oh, Ralph Waldo's getting with it there. You have to win the prize. He just said no participation trophies, didn't he? You have to win the prize.

I think he just said that. Ralph Waldo Emerson, no participation trophies will be issued here. Josh is with us in Missouri. Hey, Josh, how are you? Bless beyond all measure, Mr. Ramsey. How are you? Just the same, sir. How can I help? So my question for you today is, once you get to baby step seven, is it a good idea to go ahead and roll the traditional IRA into a Roth, or is there is a good idea to go ahead and roll the traditional ira into a roth or is there ever a good idea to have traditional and roth going into retirement how old are you

28 okay i would roll it if you've got the cash outside to pay the taxes that it creates do you i do not know how much is in the traditional uh about 44 45 000 okay all right cool so you're just now entering baby step seven then not i'm in baby step six i'm not past that just looking ahead to baby step seven okay cool yeah okay well when you get there here here's the math okay if you took the 44 000 we'll just deal with math theory here for a second. If you took the $44,000 and you took enough money out of that account to pay the taxes and only rolled the rest, you will break even because the reduced amount will grow to what would have been the after-tax amount on a traditional. Does that make any sense?

Yes. And so the way you would benefit by rolling it to a Roth is to not try to do the math in a vacuum, a theoretical vacuum like that, but instead add money to the equation and pay the taxes out of your pocket, which has the same effect of having invested more. Okay. You see what I'm doing? Yes.

Because we didn't reduce the $44,000, which by the time you get the house paid off, it would be more, but we didn't reduce it by the amount of taxes. And so whatever the taxes are, let's call them $15,000, then what we're going to do is the $15,000 is actually additional investment, and then the account will grow in and 100% tax-free. The beauty of it being 100% tax-free when you get to retirement is that you've just got so much flexibility. You can do almost anything you want to do with it at that point.

There's nothing pushing you on required minimum distributions when you're 70 1⁄2 because the government doesn't care if you take the money out, because they're not going to get any of it anyway. And so you can leave it alone. You can move it around. You could take the money out. You can use it for retirement.

You can do whatever you want to do. As long as you're 59 and a half, the money is clear. And most of what will be in the account at 59 and a half will be growth. And so that's that it's i i would how long how quick you think you're gonna have your house paid off uh five years is the goal and you said you're how old 28 okay and so yeah you're so you're 33 years old and you have a paid for house way to go man you're killing it that's gonna feel great it will yes once i get

there you're you're almost there i mean you're doing great that's amazing you're you're what you're just slaying this yeah so at that point then you save up you know you start investing then with no house payment money's gonna start flying around everywhere and you just you know i just whatever that 44 has grown to you know let's let's say it doubled. It won't quite have doubled, but let's say it's 90 grand. And so that's going to make the taxes be probably 25 or something like that at that point. And just, you know, put 25,000 above your emergency fund aside and just call that an additional investment and go ahead and roll it to a Roth at that point. That's exactly when I would do it and how I would do it. Hey, good question, man. Thank you for joining us. Open phones at 888-825-5225.

Kathleen is in Wisconsin. Hi, Kathleen. How are you? Oh, I'm doing very well and very excited to speak with you. You too. How can I help? Well, I've just been listening to your program for the past, well, year or so, and we're getting things lined up. We're on steps four,

five, and six. We just refinanced to a 15-year mortgage last month, and I was doing the math. Back in 2014, we bought life insurance policies that are 20 years, and so doing the math, the policy is going to end in the summertime of then in the winter, our mortgage will be up. And then that spring, our youngest kid, if they do a four-year program, would be graduating school. So I feel like I want another policy on my husband, not as big as what we have now. But I just don't know if that $500 a year would be better in mutual funds. It'll be better in mutual funds. So let's visit that summer for a second, and you would owe about how much on your house at that point?

How much would you think you would owe on your home at that point oh uh i mean it ten thousand bucks or something yeah yeah okay because you're gonna be paying it off by and likelihood you'll probably pay it off before then oh well okay hopefully well hopefully you're going to add something extra you're doing four five and six and that six involves any You're doing four, five, and six, and that six involves any extra money above four and five going on the mortgage. And so hopefully it's gone and it's a non-issue. But let's pretend there's $10,000 owed and you still have one child to finish up one year of school. Did I understand that right in our case study that you're laying out, right?

And this is how many years from now? Well, 14, 15 years. From today? Yes, we just refinanced just last month. Oh, I thought you said it was 2014. Okay, all right, so 15 years from today. In 2014, we bought the 20-year life policy. I'm catching on.

Okay, and that leaves 15 years left. Okay. In 2014, we bought the 20-year life policy. I'm catching on. Okay. And that leaves 15 years left. Okay. So basically, you have one year of college and a mortgage. Now, you will have been putting for 15 years 15% of your household income away. What is your household income? Just over $100,000 or so. Okay. So if you invest $15,000 a year into good growth stock mutual funds in your retirement plans for 15 years,

you're going to have hundreds and hundreds of thousands of dollars, maybe a million. I'm not putting it in my calculator in the one minute I have left on the air but um but let's just say you had six hundred thousand bucks okay you wouldn't need life insurance even then you would just pay off the mortgage and you'd have the money to cover the last year of college it's not ideal but here's the other thing that's going to happen here's the other thing that's going to happen nothing works exactly like you plan 15 years out it's always better or worse agreed agreed and so five years from the time that that this event is going to occur not 15 let's revisit you revisit the decision if things have gone worse pick you up an insurance policy then for 10 more years

if things have gone better and you're already debt free by the time we talk about this you still got five years left on this policy then obviously the discussion became moot and you would just move on and that's really what's probably going to occur because there's a high correlation between people that pay attention to money and win with it by the way it's true about every area of our life there's a high correlation people that pay attention to money and win with it. By the way, it's true about every area of our life. There's a high correlation of people that pay attention to their wives and stay married. There's a high correlation of people that pay attention to their kids and they turn out. You know?

There's a high correlation that what you pay attention to, you win at. That's what it comes down to. And so you're probably going to do all of this faster than your projections 15 years away are telling you. I can tell you ours did, for sure. We had a few other benefits, like a few best-selling books and an explosive business that added in there. But just the same, nothing turned out like I thought it was going to. It was all better. And that might be the case here.

Hope so for you. But revisit it five years out. Don't worry about it today. That's what I would do. That puts this hour of the Dave Ramsey Show in the books. Thanks to James Childs, our producer, Kelly Daniel. Back from vacation. Back on the phones.

Back to work. We'll be back with you before you know it. In the meantime, remember, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus. Hey, it's Kelly, associate producer and phone screener for The Dave Ramsey Show. If you would like to do your debt-free scream live on the show, make sure you visit DaveRamsey.com slash show and register. We would love for you to come to Nashville and tell Dave your story.