The Ramsey Show - App - Which Part-time Job Is Best? (Hour 1)

Episode Date: June 20, 2018

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Live from the headquarters of Ramsey Solutions, it's the Dave Ramsey Show, where debt is dumb, cash is king, and the paid-off home mortgage has taken the place of the BMW as the status symbol of choice. I'm Dave Ramsey, your host. This is your show. Thank you for joining us. Open phones at 888-825-5225. That's 888-825-5225. We're going to start off this hour in Rochester, New York. Joe is calling. Hi, Joe. How are you? Hey, Dave. How are you today?

Better than I deserve. What's up? Great. Well, I was going to open up a Roth IRA with Edward Jones, and they're actually telling me not to open up the Roth IRA, but to open up an ETF instead because the fees are cheaper. And they said the only way to open up a Roth IRA is to max it out all up front with the $5,500. I wanted to get your opinion on that. Because it didn't quite sound right because I know you're always for the Roth IRAs. Well, a Roth IRA is, you can technically put

an ETF in a Roth IRA. It sounds like you have a beginner that you're talking to that doesn't know what they're doing. Yeah, he hasn't been doing it long, I don't think. Yeah, like 20 minutes. Yeah. Because a Roth IRA, you can put anything in. I mean, you could put a simple bank CD inside of it. You could put mutual funds inside of it.

You could put ETFs inside of it. The Roth IRA is not an investment. It's how the investment is treated for taxes, meaning it grows tax-free. That's what a Roth IRA is. Now, do you know what an ETF is? A little bit. What did the beginner boy tell you? He basically just told me it was going to be cheaper on taxes. He didn't tell you what it was?

Not too much, no. Okay. All right. Well, it stands for exchange-traded funds. The vast majority of ETFs, like 96% of them probably, I'm making that number up, but it's almost all of them, in other words, are S&P 500 index funds. Okay? And the S&P is a company called Standard & Poor's, stands for S&P,

and they rate the top 500 largest companies on the New York Stock Exchange. And what those 500 do as a group is considered the most accurate measure of what the New York Stock Exchange is doing. It's not the Dow Jones Industrial Average, although the news reports that. That's a small number of companies. But this is 500 companies, and it basically is the baseline of the market. Whatever the S&P 500 does, that basically is the stock market, or at least the New York Stock Exchange stock market, okay, what we call the big board.

When someone calls, it says the stock market. So, in other words, if you buy an S&P 500 index fund or ETF, either one, you are getting an investment that's going to do exactly what the stock market does. No better, no worse. In that case, it will outperform over 50% of the mutual funds. They don't even keep up with the market. So you obviously wouldn't buy them. You'd buy an ETF before that.

Now, so why would you need an advisor if you can do that? Because, you know, a blind hog can pick out the S&P 500. You can just go, there it is, you know, and you just buy it. You don't need Edward Jones or anybody else to do that for you. You can just jump online and buy either an index fund or an ETF, either one. If you're going to buy that, probably an ETF is the way to go. And there's this whole movement out there in the investing world towards what's called passive investing, which is to put money into the S&P and just accept whatever the market does.

And ETFs are the way to go. Okay? And there's a couple of books out there on it and you can you know most most mutual funds don't beat it anyway so the heck with it just just take the average and ride the average and that's going to be good by the way it's not bad the average the stock market return is a pretty good return last year it was 19.9 you know that's the pretty sweet you know so not too bad but i i'm just not passive i think that if 50 of them suck that doesn't mean the other 50 don't i can probably beat average and i generally in most

areas of my life try to do better than average i just don't like average i want to do better than average and so the mutual funds that i own are not etfs they're mutual funds, and they have long track records of outperforming the S&P 500. Okay, on a 10-year basis, a 20-year basis, a 30-year basis, a 40-year basis, the four mutual funds that I own inside my personal 401k, and you have about 40% of the funds to select from out there that have outperformed the S&P. Now, here's what's really going on. Junior Birdman, who's brand new in the business that you're talking to here, what his superiors have told him is small accounts because of some of the SEC

rulings and some of the stuff that came out in the Obama administration, most of which has now either been reversed or is being reversed, leaves these brokers liable, and they don't like to fool with small accounts and do investing like I'm talking about. They would rather you just do something passively. They don't even want to get paid on it. It's too much trouble for them. And so he's shoveling you off to the corner because of liability whether he understands he's doing that or not and he's

shoveling you off to the corner because you're not even big enough to screw with because the commissions on 5500 aren't much you know they don't make much on that they'll make a couple hundred bucks and really you know you've got to have somebody that is in it for the long haul and is not whale hunting that actually wants to build up a whole bunch of small accounts and let them become rich under his tutelage. And that's the kind of investing advisor that we recommend, someone with the heart of a teacher that's more concerned about you learning and understanding what you're doing.

And that's where our SmartVestor Pro came from, is because too many people in the business are like this kid that you're dealing with over here that you apparently already know more than he does, and he's supposed to be advising you. Especially after this conversation, I know you know more than he does. Yeah, I appreciate it. Yeah, but that's what's going on. If you understood everything we just said, what I'm going to tell you to do is, you know, buy good growth stock mutual funds across four types, growth, growth and income, aggressive growth,

international, only pick funds that have long track records that have outperformed the S&P. That's the only thing you do. And put them in there, and then they'll do that. And, you know, it's really not that tough. You know, in the last 40 years, the S&P has made 11.81%, according to my records right here. The mutual funds that I own, I've not been in all of them for 40 years, but had I been in them for 40 years but had i been in them

for 40 years would have made 13.04 versus 11.8 last 30 years i've made 11.3 and the s&p's made 10.89 in the last 20 years i've made 8.53 and the s&p's made 7.12. Last year, the S&P made 19, and I made 24 in one year. So all you got to do is just have mutual funds that are beating the S&P. And then it's worth paying a little bit of a fee for that. And you've got an advisor in your corner that's a little longer in the tooth, that knows what the blip they're doing. And so go to smartvestor at DaveRamsey.com. You'll find somebody there that's got some experience

and they'll teach you and lead you and you can help make your own decisions that way. Good question, man. Thanks for calling in. This is the Dave Ramsey Show. Are high health care costs getting you down? Are you confused trying to navigate your options? Do you wish you could find an affordable, biblical solution to your health care costs? Based on New Testament principles, Christian Health Care Ministries, or CHM, helps Christian families, churches, and ministries join together as the body of Christ to share their major health care costs.

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Hi, Raven. How are you? I'm good, Dave. How are you doing? Good. Better than I deserve. How can I doing? Good. Better than I deserve. How can I help? Okay, so I just graduated from physical therapy school last month,

and I start working at the end of August, and my grace period is until November, and so I'm not sure which repayment plan I should take. Okay. How much debt do you have, kiddo? $150,000. $150,000. So how much are you making as a physical therapist? The job I have, I'm making $65,000.

Okay. All right. And what do you think your increases are going to look like in the next three or four years? In three years, I should be up to about 75 maybe 80 yeah depending on how i can i'm hoping you can get up towards 100 as a physical therapist and it made it may dictate that you live in a different area i don't know but you can generally get up close to there within three or four years of starting your career if you continue to grow and push and grow and push.

So $150,000, you're single. A year ago, you were a broke college student, and now you're a broke graduate. Right. Okay. But you're used to living on nothing. Right. I'm going to recommend you continue that. Now, let's do some simple math.

$150,000 divided by three is $50,000 a year. I don't think you can do that on $65,000 pay taxes and eat. So it's going to take longer than 3 years, isn't it? Yes. $150,000 divided by 5 is $30,000. That's doable making $65,000, especially considering you're not even used to having money. Right? So you're going to live on nothing, and somewhere between four and five years,

you're going to be debt-free during that time. And you're also going to take any extra job as a physical therapist you can anywhere, in addition to your full-time gig. And the faster you do that, let's just pretend you picked up another $30,000. Oh, now, wait a minute. We just cut that down from five years to three years. Oops. Okay.

So that part-time job thing is a big deal if you can get some work in, you know, I don't know, doing whatever, but, you know, weekend. Yeah, I'm working on that now yeah weekend er stints or whatever it is whatever wherever you can pick up something um and just because here's the thing you either are going to pay this off real slowly and it's going to be a long lot of pain or you're going to pay it off real fast and it's a rip the band-aid off and you're just going to have no life for a shorter period of time so that you have a great life later. You're going to choose one of the other because this is not going away.

Right. So I'm going to choose the rip the bandaid off, work like a crazy person and get this done in three to five years. But I'm thinking three years when you pick up extra raises and extra jobs and overtime and all that kind of stuff so thanks for the call andrew is with us in boston mass hey andrew how are you i'm doing well thanks for taking my call dave sure what's up um so i actually just came across your youtube stuff um like over the and I feel like it's changed my life. Just finished the Total Money Makeover. Wow.

And I really want to get out of all the debt that I have now. I'm about $65,000 in debt between student loans and my car. And my fiance is about $45,000 between her car loan and her student loan. What do you owe on your car? How much do you owe on your car? I owe $11,000 and I think she owes $12,000. Okay, and what do you make a year, sir? $45,000.

And what does she make a year, sir? $30,000. And when are you getting married uh actually october awesome man this is great good for you guys okay how can i help you so um right now i'm working monday through friday eight to five but i really want to crank down with like no one else now so i can work like no one else later but um i'm trying to utilize all that extra time outside of my full-time job to work in different jobs. And right now I have a couple interviews lined up,

like working as a cashier at a liquor store, working at a country club, even doing some stuff with Doppler as entry-level tech stuff. I was curious what your thoughts are on the best kind of path to go down when it comes to trying to do those part-time jobs or just trying to get a little bit of extra cash. The part-time job has one purpose and one purpose only, and that is money to pay on the debt. It is not your career. It's not affecting your career unless you do something that negatively affects your career. But I mean, it's not a career choice issue. And so there's only one gauge we use for what the proper part-time job is, the one that pays the most. That makes sense. Where can you get

the most money in the shortest period of time without doing something illegal? I mean, yeah, that's what it comes down to. How fast can you get some money? And even if it's unpleasant, it's for a short period of time, even if it's not what you don't want to do, and you really don't want to remember even that you had to do this. But, I mean, if you can make $100,000 a year cleaning septic tanks with a spoon, that's a great part-time job. Absolutely. I don't think that's available, by the way.

But you could do it. I mean, it would be highly unpleasant, right? But we would do that because you'd be out of debt in like 20 minutes, you know? Absolutely. So, you know, that's what we're talking about. Do something highly unpleasant or whatever it is that you don't want to do. You're going to work like no one else, so later you can work like no one else. Kind of like I work now kind of when I want to, you know, which I enjoy what I do, so I work a lot.

But it's just because I want to. I don't actually need to. And so you just, why? Because I paid a price for the last 30 freaking years doing this. And, you know, we used to work all the time because that's what it took. And so get a business launched and so forth. So you're doing the same thing with cleaning up your debt here. And you're on beat, man.

You're going to do great. I'm proud of you. You guys are, you've got everything in your sights here. You've got it dialed in. You know exactly what is owed, why it's owed, when it's owed. I can see you, you know, you're going to be making $75,000 a year plus a part-time job. You got $100,000 between you and debt. You're going to be debt-free in two years, two and a half years.

That's what's going to happen. You know, so easy, you know, probably about two years because you're just chomping at the bit to go work. And, you know, work is just a surefire money-making scheme. You know, it's a good thing. So I'm proud of you. Well done, sir. Very well done. I think your fiancé chose well.

Trish is in South Dakota. Hi, Trish. How are you? Hi, Dave. I am better than I deserve. Thank you for taking my call. Sure. What's up? Well, I am wondering, my overall question is, where's the magic line between when we focus on retirement

savings to when we focus on college savings for the kids? When you say like fully fund your retirement, I mean, is there ever truly a thing, and then you're just completely done, and then you switch? I mean, I get that you can work on things simultaneously, but I just don't know where to focus. Fully fund. No, we say fund college is baby step five. Fifteen percent of your income going into retirement is baby step four. So I'm assuming, since you're asking this question, you're debt-free except your home, right?

Correct. And that you have your emergency fund of three to six months of expenses in place. That puts you on baby steps four, five, and six simultaneously. Simultaneously. Four gets 15% of your income going to retirement. Five gets college. And six, if there's anything left, goes towards extra on the house. The way you're asking this question tells me the house is probably not going to get much attention

until we get some college stuff done here. Well, just because I think, I mean, we're on a pretty good plan with the house, and we know when it will be paid off. Yeah, but if you didn't have college in the way, you'd put more on it. Probably, yep. Yeah, that's my point. So how old are the kids? The oldest is 12. Probably, yep. That's my point. So how old are the kids? The oldest is 12.

Okay, cool. So we've got some time, and we've got a chunk toward our retirement with maybe 17 years left until retirement, I think. Your household income is what? About $100, I would say right now. And that's been without me working. I'm a registered nurse by trade, but I've been able to stay home for quite a few years. I'm just two. I mean, I think you're putting 15% of your income, no more, no less, into retirement. And then you're going to sit down with your smart investor pro and lay out a game plan where you get busy because you only got six years. and let's get college moving, get that going,

and I wouldn't pay extra on your house until you had college really working and underway here because six years is going to go by in about an eye blink. This is the Dave Ramsey Show. For years, I refused to endorse any company that claimed to get people out of timeshares. I told my listeners it's a horrible product and that, unfortunately, they didn't have a lot of options. Then a few years ago, I sat down with Brandon Reed, the owner of Timeshare Exit Team. Brandon walked me through the Timeshare industry, and I learned that you can't sell them, and you can't even give them away. And then we talked about Timeshare Exit Team's process.

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Online at timeshareexitteam.com. In the lobby of Ramsey Solutions, Ron and Nancy are with us. Hey, guys, how are you? Great, Dave. How are you, Dave? Better than, guys, how are you? Great, Dave. How are you, Dave? Better than I deserve. Where are you guys from? Bailey, Colorado, which is about an hour out of Denver in the foothills.

Oh, yeah. Very nice. Good. Well, welcome. Good to have you guys all the way over here to Tennessee to do a debt-free scream. Yes. How much have you paid off? We have paid off $161,242. Love it. How long did this take? 23 months. Good for you. And your range of income during that time? 120 to about 150. Good. What do you guys

do for a living? We are self-employed independent distributors for Pepperidge Farm. Oh, okay. We have two routes and I also have a fun job. I'm a part-time bridal consultant. Oh, okay. We have two routes, and I also have a fun job. I'm a part-time bridal consultant. Oh, cool. Good for you guys. How fun. So what kind of debt was this $161,000? Well, we had a car loan, we had a business loan, and we paid off our house, our mortgage.

Oh, look at the weird people. 100% debt-free touchdown. I love it. Well done. Very cool. Now, did you sell some stuff or did you have some money on the side? No. I mean, you have been living on beans and rice and Pepperidge Farms or something.

I don't know. We just eat the stales. We eat the stale product. No, we didn't sell a thing. You're making $150,000 paying off $80,000 a year. That's crunching it. We are blessed. We live in a teepee.

No. So what's the house worth? I would say, well, the house prices in Colorado have gone crazy. So probably between $300,000 and $350,000. I love it. Way to go, you guys. Very crazy. So probably between $300 and $350. I love it. Way to go, you guys. Very cool. So tell me the story.

What happened that lit you on fire 23 months ago? Well, it actually was three years ago. I'm an avid sports fan. I love the Denver Broncos. I love the Colorado Rockies. And one day, I'm trying to find the Rockies game on the radio. And there's this guy on the radio. Messing up the game.

Messing up the game. And I don't know where. I was like, where's the Rockies? But then I started listening to you. Never heard of you before three years ago until then. And I sat in my car for three hours listening to your entire show. In the garage. In the garage.

Because I didn't want to miss anything. Even the commercial breaks, I go, well, if I run in the house, I'm not going to, I'm going to miss part of the show. So... Ron, that's weird. It's weird. Yeah, it's weird. It's weird.

I love it, but it's weird. It's weird. So then I became addicted to Dave Ramsey. I listened to you every day. And we wanted to attend a Financial Peace University class. But all the classes were an hour away. Not good. Not good. So I heard you say one day on the radio show that you don't need to have graduated from FPU to lead a class.

You just need to be able to stick a DVD in a player and put chairs in a circle. I'm like, I can do that. So we started an FPU class at our church up there in Bailey, and we've led four classes now. So what was the difference between three years ago when you first started listening? What kicked it into gear 23 months ago? We started that first FPU class. Oh, then it was game on. Then it was game on. So Nancy, he goes into the garage and joins a cult.

Yes. And what did you say to all of this? I thought he was crazy. Yeah. Yes. So how did he get you on board? Well, when he finally started giving me cash. He paid you.

You got bribed. He did, yes. Okay, that's good. He paid you. You got bribed. He did, yes. Okay, that's good. That's not bad. Not bad. Seriously, I mean, you guys are teaching the class together. Right. And at some point along the way, you had to go, okay, yeah, this guy's, he's kind of bit off.

He's kind of going crazy on Dave Ramsey stuff. But this looks to make sense. When did that happen, Nancy? Oh, gosh. I think two years ago. Okay. About the time you started teaching the class. Started teaching the class.

In fact, three days before I started the first class, I bought a car, brand new. What are you, like, eating chocolate before you go on a diet? Oh, my God. Exactly. Exactly. And I was so convicted. I didn't even want to drive that car to teach the class. Good.

Yeah, and so that was the first thing I paid off because the thing just stared at me every day saying, you're a hypocrite. And I paid that car off. I had a five-year loan. I paid it off in seven months because I just threw every extra penny at that car. So what do you tell people now? You paid off $161,000 in 23 months. What do you tell people the key to getting out of debt is? First, by paying cash for items and then doing a budget.

We did a budget. We've been married 34 years. Have you ever been debt-free before now? No. We are the experts at borrowing money. We were the experts at borrowing money. We were the experts at borrowing money. In 32 years of marriage, we never did a budget. I did a budget.

It was all up here. She just wouldn't follow it. Because she couldn't see it. Because she couldn't see it. That's right. And I would say absolutely doing the budget. We're both together. We do the every dollar. I can see what she's spending.

She sees what I am. And it just made sense to put everything in order. Very cool. I'm proud of you guys. Well done. Thank you. Very, very well done. How's it feel?

You don't even have a house payment. No. It's very freeing. Now we're more prepared for retirement. Yeah. We're taking some great trips and then now contributing to our grandchildren and our children I would say one of our biggest regrets in our life

is that our own kids, we have four kids had to take out student loans and it's our hope by contributing to our grandchildren's 529's that they will hopefully not have to have any student debt when they grow up and go to college.

Love it. Love it. And thanks to your smart, what did they call him? Oh, your smart vestor. Yeah. Smart vestor. We met with him because, I mean, you know, six months after I'm teaching the class, I'm on fire.

I'm like, I'm 54 years old. I've got to get going on this retirement thing. I'm going to work until I'm 80. So we met with him. I had an old 401K I got to get going on this retirement thing. I'm going to work until I'm 80. So we met with him. I had an old 401K I had to roll into something. And I told him, I said, I really want to get started on this retirement. And your smart investor said, well, we don't recommend that because you're in baby step number two. He says, get those debts paid off, then come talk to us.

So this March, when we paid off that last thing, I called him up and said, we're ready. That's good people that tell you not to buy their product. Yeah, he did. And he gave me great advice. I had a medical procedure coming up, and he says, do you have an HSA account? And I'm like, well, no, what's that? He explained the whole HSA thing. He said, it'll save you probably $1500

on your taxes. I was like so just little stuff that I learned from them it was amazing. That's great. Way to go you guys. Very well done. People cheering you on while you're doing all this? You know, I would think some. Probably our

FPU classes, they're cheering us on. But the great motivation is you. Yeah, the motivation was your podcast. It comes on in a weird hour in Denver. We're asleep when you come on in Denver. So the podcasts were a great help because I can listen to them while I'm working during the day. And that was my motivation every day. And I go, come home and say, Nancy, you've got to hear what Dave said today.

They've got to hear this one. So, yeah, you motivated me. Well, we're proud of you. Well done. You guys are heroes. In your mid-50s, everything's paid for. House and everything, man. Got a copy of Chris Hogan's retire-inspired book because you're right.

You're on to that next step to become a millionaire. And you're pretty close. And you'll be there soon. And then be outrageously generous because you're right. You're on to that next step to become a millionaire, and you're pretty close, and you'll be there soon. And then be outrageously generous as you go along. And I love the idea of changing the grandkids' generation with funding those 529s and very, very cool stuff. Well done, you guys. You're great. You're impressive. Ron and Nancy from Colorado, $161,242 paid off in 23 months.

House and everything. If you're watching on YouTube, you're looking at weird people. Count it down. Let's hear a debt-free scream. Three, two, one. We're debt-free! And this is how it's done. Just like that.

Wow. Man, oh, man, oh, man. I love it. How fun is that? See, you can do this. I don't care if you're 50 or you're 25 or you're 65 and you're 45. I don't care. What, you think you're different?

Math is just math, baby doll. Time to get after it. This is a system that works when you're going to do it. It's the only question only you can answer. This is the Dave Ramsey Show. There are few things in this world that irritate me more than when people pay too much for their mortgage.

So many of you are paying way too much, and you don't even know it. I've got my good friend Mike Hardwick with Churchill Mortgage here. Mike, how do you help these folks? It's unbelievable, Dave, how much people can save if they just make a simple call. We've helped thousands of your listeners save hundreds each month or take years off their loan, helping them to save thousands of dollars in interest over time. Folks, do yourself a favor. Make a quick call to Churchill Mortgage today.

I'm telling you, if you're paying a mortgage, you're potentially throwing money away that could be piling up in your savings account. It's true, Dave, with the rates the way they are right now, if you're making any mortgage payment these days, you're probably paying too much. Call Churchill Mortgage, guys. It's well worth a few minutes of your time. This is a paid advertisement.

NMLS ID 1591. Equal Housing Lender 761 Old Hickory Boulevard, Brentwood, Tennessee 37027. Edith is with us in Denver, Colorado. Hi, Edith. Welcome to the Dave Ramsey Show. Hi, Dave. I'm so happy to be able to talk with you. You too. What's up? My husband and I have been together for about six years,

and we had a child about 19 months ago. And I believe in Colorado they acknowledge common law marriage despite us being married only two months, officially married two months ago. After this time that he and I have been together, he's asking me for a post-nuptial because he says he wants to protect his assets from before our marriage, saying that he is 14 years older than me at 48 years old and me 34. He wants to protect his assets because he's closer to retirement. And I wanted to see what you think about that, considering he and I have been technically only married two months, but I don't know if common law marriage matters. And also that, you know, what he's asking for.

So you're married for two months. You have a baby. You used to live with him for years before that. And now he comes up and says he wants a post-nup because if you all get divorced, he wants to be able to keep all his stuff. Right. Does that not hurt your feelings and scare you? It does scare me. I'm sorry?

It scares me. It hurts me. Yeah. If you were my little sister, I'm a redneck hillbilly. I'd be tempted to punch him in the nose. That's how it makes me feel when I hear it. What an irresponsible, selfish twit who has a brand-new wife and a brand-new baby, and all he can think about is protecting his own butt.

That's what's coming through my mind now i just said it all out loud i said all that out loud didn't i yeah so there you go you know i mean we have a manhood crisis in this culture good lord what a little child so that's how i feel um now what do you do about it is another thing um i i think there's a lot going on here and um if i were in your shoes for the good of your child and the good of your future marriage i think you've got to dig out all the toxicity and poison and get it cleaned out for you to have a good clean relationship going forward and that's called marriage counseling. So the answer is no, I would not give him a post-nup. But the fact that he asks for it indicates there are issues that need to be dealt with.

Would you agree with that? Yes, we have issues. Mostly stemming from, well, he and I have been having fights over the same thing for years because for the past two years he has been working and living in Oklahoma while I stay and work and take care of our daughter in Colorado. Why? Because he's there because he wants to make the money. He makes really good money.

Well, why don't you move to Oklahoma with your husband? I very much enjoy my life in Colorado. Yeah, but you married a guy who moved to Oklahoma. Yes. Y'all are weird. Yes, it's a matter. I don't want to continue to chase him. He's moved to several different states in pursuit of various jobs,

and I want to be able to settle down, and I want him to come to Colorado and be with me and the baby here. I wish I could roll back time and tell you not to have a child or marry this guy. I wish I could, but we're not there now so you guys have got to work on some of these issues and you got to decide if you're going to move with your man or not and and if he's going to be your man or not or if he's going to continue to be a freaking little boy um this is this is y'all got all kinds of stuff going on here and you really do not have any probability of staying together like zero you're going to be

divorced if you don't deal with this stuff you have you have you given me two really major red flags i'm not a family therapist i've just worked with people who divorce all the time for 30 years and i can just see this coming just like a just like an old man that has seen stuff coming. So that's me, old ugly Uncle Dave. Your car is running right towards the wall, and everybody has their foot all the way down on the accelerator. It's going to completely implode when it hits the wall if you guys don't deal with this stuff. And this posting up thing is a symptom, and this moving around thing is a symptom, and there's a problem under there that you all got to dig up and deal with. That's my advice to you, little sister.

And if you was my little sister for real, that's exactly what I would tell you. You need to be in the pastor's office. You need to be in the counselor's office and be sitting and getting some good pre-marriage counseling. It's the only way you got a chance. If you do not address these issues, you will not be married much longer because he's going to be in another state, and he's going to find him another woman. That's what's going to happen if he hadn't already. That's what's coming.

Melinda is with us in Rochester, New York. Hey, Melinda, how are you? Hi, Dave. I just had a question about an ABLE account. I have a Down syndrome baby. He's almost two. And I'm in baby step two. We'll finish that in this coming year. So I just wanted to prep for four, five, and six. Okay. Refresh me. I knew what that was, but I can't make it come to my brain. I was researching it. It's some kind of account where you put money in, and they can use it for –

it doesn't count against them as income or as money that counts against them. Well, for government subsidy or government assistance? Yes, sir. Okay. And you're getting government assistance no i'm not and i don't did you want to personally no but i don't know how do you need to right now no okay do you anticipate needing to if you don't then you don't need to have money in this account if that's what it's if that's what

it's designed to do i i that it's coming back to me i grant i generally remember what you're doing um what's your household income eighty thousand okay and you have one child the special needs i have two one that's nine and then a special needs two okay almost two and the extent of the severity. Yes, sir. And so forth. And so, other than you have a precious, smiling child all the time, that's for sure. No question about that. But the, hmm, I wouldn't worry about an ABLE today.

You're making $80,000 a year. You can support two kids. And you're not going to need government assistance. And if the only purpose of the ABLE, unless I'm missing something, if I recall properly in what you're telling, what you understand is that the only purpose of it is that if they have money in there, it doesn't count against them for getting aid, government aid. And I'm thinking you're not going to need government aid. So what I would make sure I had is a special needs trust that is formed as a part of your will.

And you should have a will that has life insurance named the beneficiary of your life insurance until you have multiple millions of dollars of assets. But until then, your life insurance beneficiary is in the name of the special needs trust, and the special needs trust is formed upon you and your husband's death. The money would go into that special needs trust to take care of this baby for their entire life. And the trust lays out, you know, you can lay that out. So you need to have a will drawn with a special needs trust that activates upon both of your deaths and that has a life insurance, you have by a term life insurance policy with at least a portion of your beneficiary,

your designated beneficiary on the life insurance policy is the special needs trust to take care of the child. But I don't see any need to, unless you anticipate taking on some kind of income-based government assistance for this child. But I would much rather you're making $80,000. Let's just build up a big mutual fund like the kid was going to go to college and use that money to take care of that kid. And so let's put $150,000 in their name just like you were going to.

If the child was going to go to college. You'd do the same thing. And you're doing that for the other one over time. And you should be anyway. It's part of your college planning. And so then you've got the money to take care of the child, for the child to be taken care of and so forth. And you should be able to self-fund and not be in need of government assistance. If that's the only purpose of the ABLE account.

Again, I'm not positive. I don't remember the details on it, but I'm understanding that from you. Hey, thank you for the call. This is the Dave Ramsey Show. Hey, guys, this is James Childs, producer of the Dave Ramsey Show. I'm excited to announce that we're now carried on 600 radio stations across the country. To find one near you, head to DaveRamsey.com slash show. You know, so many people have such a negative attitude about life insurance

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