The Ramsey Show - App - You Can Have Financial Peace in Good AND Bad Times (Hour 2)

Episode Date: March 25, 2020

Chris Hogan, Debt, Retirement, Home Selling, Taxes 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 really dumb, cash really is king, and the paid off home mortgage, for sure, has taken the place of the BMW as the status symbol of choice. Ramsey personality and number one best-selling author Chris Hogan joins me as we talk to you about your life and your money. It's a free call at 888-825-5225. 888-825-5225. You know, Chris, the things that you and I have taught for many decades now um in that opener are uh we kind of just used to them you know we we live that way so long we don't think about it and times like these highlight how wonderful it is to be debt free yeah highlight how wonderful it is to have

an emergency fund how wonderful it is to be in a position that I don't have to worry if my investments go down because I know they're going to come back up, how wonderful it is to have a paid-for home and not be worrying about a house payment. I mean, and I've been living that way for so long, and you have, and we've been teaching it for so long. It almost just feels like I know that it's weird statistically in America, but among people in this building and among the verbiage that you and I use coming out of our mouth on a daily basis,

it's just normalized now, and it really is different. I mean, where cash really is king. I know Jesus is king. Don't send me some religious email for you over-saved people, but I know Jesus is king. Jesus is king of my life. Shut up, okay? But the, I get that, but I mean, cash right now,

from a financial perspective, if you're sitting on $25,000 cash and you have no house payment and no payments, you're in a completely different head space than if you're sitting on $25,000 in credit card debt, $30,000 in student loan debt, a $10,000 car payment, and no cash. Yeah.

Dave, I think, you know, throughout this tough spot, we're going to have an opportunity to get more people to wake up and tune in. Yeah, I think hopefully we'll get some people ready to change their lives where we can help. I hope so. I hope that this serves as that lesson where you go, this is the final one. This is the one. This is where you say that phrase, never again. And it comes from your heart, from the bottom of your heart.

And you look at this and you say, I'm growing forward, but I'm never going to feel this way again. And I hope you people wake up to that and have that spirit about them, that spirit of fight, not flight, because this is something we've got to stand up to. And, you know, my kids are grown. They're all debt-free. They've all got money saved because they were raised this way. So my grandbabies are okay.

I mean, when we say change your family tree, right now, you know what we did last night? We grilled steaks at the Ramsey's, and everybody was there. All my grandbabies hugging Papa Dave's neck. And, you know, we really weren't talking about any of this stuff. We were just talking about what's happening here at the office. We're talking about each other. We're talking about things that each of them are doing in their personal lives. Talking about what's happening here at the office. We're talking about each other. We're talking about things that each of them are doing in their personal lives. We're talking about what's happening with each grandbaby.

We were not, and I'm not bragging. I'm just saying it's a weird place in the middle of all. It's like you're standing in the middle of a hurricane, and you're inside of a brick house, and you're just calm. And I want that for all of you that are out there listening. You're inside of a brick house, and you're just calm. And I want that for all of you that are out there listening. Chris and I, we want that for you. I got that because I was stupid.

That's how I got there, because I did dumb things 35, 40 years ago. And then when a storm hit, it wasn't a national storm. It sort of was, but it was not as bad as this, but it was a storm hit. The S&L crisis hit, and it changed the bankers and the way they were thinking, and they called my notes, and we lost everything we owned. And I vowed I had that moment, and it was so painful. I was so scared. I was so terrified because I had dug such a deep hole.

It was so painful that the lesson was so thorough. And, I mean, I want this for you guys. For some of you that are hurting right now, we're going to help you get through it. We're going to walk you through it. Financial Peace University's 14-day free trial right now for you. Jump on, take the whole class right now free. And we've never done that before, by the way. But a bunch of you got 14 days at home. Just go to DaveRamsey.com slash hope.

There's a bunch of stuff there to help you. But what we want is we want this to be the time. And I can look back to September 23, 1988 is the day I filed bankruptcy. And you can look back to April 1, 2020. Forty years from now, it will be 2060, I'll be dead, and some of you will be looking back going, that's the day that my family tree changed. That's the day I finally got my wake-up call and I picked the phone up.

That's the day I got scared enough that I said never again. That's the day I got angry enough that I said never again. I'm not going to be subject to an economy that can be completely collapsed by hysteria. I'm not going to be subject to a series of people losing their minds over things. I'm not going to be subject to a virus that invades our house to the extent that I can't control the medical aspects of it. I don't mean that. But I'm not going to set myself. I'm going to control the controllables so that when the storm comes, I'm like the little pig in the brick house, not the one in the straw house.

Because it's not a matter of when, if the storm comes. It's just a matter of when. That's exactly right. And that's not being pessimistic. No, that's being realistic, Dave. It's called wise. That's right. I read somewhere, and I started tweeting out years ago, that information that you take in just becomes information.

But information that you apply in your life gives you an opportunity to have wisdom. And a lot of us right now are gaining some wisdom in looking at this situation. Sadly, it often comes from pain. Oh, it has. The wisdom that I have, a lot of it was when I was stupid. Me too. And I got experience. And right after experience, somebody said, you're wise.

Where'd you get your wisdom? I got it from experience. Where'd you get experience from being stupid? Well, I noticed you went immediately to the date of your bankruptcy. Isn't that interesting? The day. Oh, I remember when we filed. Oh, I know you do.

I remember how it felt. I remember how my throat was tight. My voice was up three octaves because of the stress. My stomach was up in my, I mean, you know, tears are welling up in your eyes. Your stomach's up in your throat, and I'm driving away like I'm driving away from a funeral from that lawyer's office, you know, because it was. A part of me died that day because I'm a guy who keeps your word, and I couldn't keep my word because I was stupid. I painted myself in a corner.

I got paint on my feet. And it was my fault. Now, people did stuff to us. The outside economy impacted us. But we did not control the controllables because we thought that we could violate these principles and still come out on top. And you can't beat the law of gravity. It'll kick your butt. Yeah, it does. Dave, for the people that are out there right now, potential looming job loss, income cut in half, what are the controllables now? You know, if you got that kind of a thing, you got to look at creating income. Right. Number one.

Number two, I'd stop paying extra on anything. I'd stop any baby steps if you're looking at a looming job loss. Right. And I'd pile up cash. And if you've got steady jobs, keep working your steps. Right. Right? But if you're there, if you're a restaurant worker and you're laid off and you're going to go over here and work for Amazon for a little while or Target or whoever's hiring, right, there's a lot of people hiring, until you get back on your feet, then you stop everything right now and you take care of the four walls, food, shelter, clothing, transportation, and

utilities. Everything else is on hold. Right. There it is. We've been voted one of the best places to work in Nashville 11 times. You want to know how we do it? Well, our team has been using LinkedIn jobs for years to find the best people from all over the country to come and help us change lives. Think about it. LinkedIn has more than 600 million

active members. I'm talking about people who come to LinkedIn to make connections, grow their careers, and discover new job opportunities. In fact, 90% of LinkedIn users are open to new opportunities, but not actively scanning job boards. This means LinkedIn Jobs gives you access to an entirely different demographic. Don't wait. One hire can change the direction of your company. Post a job today at linkedin.com slash Ramsey and get $50 off your first job post. That's linkedin.com slash Ramsey. Terms and conditions apply. Joey is with us in Kentucky. Hi, Joey. Your question for Chris Hogan and me.

Appreciate you taking my call, Dave. Sure. What's up? Yeah, I'm 22 years old. I'm getting married in November. My fiance will be finishing school in December. We're going to rent for about a year after we get married to save for a down payment. We'll be right back. at the end of the year. I was just wondering with the market where it's at. I know we're not going to time it perfectly, but we're at unprecedented times. I just wanted to call and get your thoughts on maybe putting something into a,

maybe like $6,000 into a Roth IRA, or what are your thoughts on that? Well, every dollar you put into that is not going to be a down payment on your house. Correct. So if I were you, I would save everything for a down payment on your house. Now, if you want to dump 10 of your 30 into a mutual fund and ride it for 18, 24 months, you could do that. It's not going to be that exciting because even if the let's say the market rebounds crazy. All right. Let's say you made 30 percent. That would be a big deal, wouldn't it? Yes.

Okay. If you make 30% on $10,000, that's $3,000. $3,000 extra to put down on your house doesn't change your house deal. It doesn't change your life. So, I mean, you can put some of the money into something like an index fund and let it ride if you want uh you're taking some risk when you do that and and honestly the actual dollars you would get as a result of it on the short term like that even if the market completely recovers and then some which i kind of think it will i mean mean, I think that's not a bad bet, really,

but it's just not going to make that much difference. It's not going to turn $10,000 into $100,000. You see what I'm saying? That's just not going to occur. And so you're taking some risk, and you might make $3,000 instead of in a savings account you might make $100. That's kind of the thing you would look at but i i really would not do a roth you can if you want and just because you're going to ride that money all the way up then but you just know that you're you're reducing the amount you're putting down on your house and

you're changing your house deal yeah and joey i would tell you this the smartest thing and i love number one that you're 22 years old and you're in this financial position. And you're thinking. You're thinking. That means your parents talked to you or you were plugged in with foundations, our curriculum that we teach in high schools. But the smart thing you could do also is to have that home down payment, as Dave said, but make sure you only do a 15-year fixed rate mortgage. Absolutely. Andrea's in North Carolina. Andrea, how can we help? Hey.

Hello, and thanks so much for taking my call. Sure, what's up? Both you and Chris. I am a retiree. I am on baby step three, and primarily I live on Social Security and a small pension. Fortunately, I also have two investment properties that are both rented out right now. I don't know that will change in this crisis time, but I wonder if I should sell one of them and pay off the debt on both of them. They each have a line of credit, and then I would have one that would be debt-free and could buy a house for myself.

I hope I haven't confused that. No, you haven't. You don't own a home now. I only own these two investment properties. And you're renting now? I'm renting, yes. Okay. And so if you sold one of the houses, what would it bring?

About $450, $460. Cool. And how much do you owe on the other property? Well, on each of them, there's a line of credit, and the total of them is about $163,000. So one, there's $70 something. Okay, so $450,000 minus $163,000. Let's call that

$250,000 bucks left, okay? And you buy yourself a house for that cash. Or a little less, I hope. Yeah yeah and have some money for a nest egg yes this sounds brilliant to me absolutely as opposed to paying them off yep over about four years i'm guessing how would you do that on social security well i get forty eight hundred800 a month on the income of those two properties, and I'm paying what I owe, and I'm paying about $1,000 extra a month already.

Here's what's going through my mind, and Chris, let's kind of talk it through together. But I love the idea of you owning a home debt-free for your retirement because that takes the largest expense out of your personal budget line item. And that rent that you're paying is not going to do anything over the next 30 years while you're alive except go up. But when you own that home, it's not only going up in value, but you've gotten rid of that experience out of your eye. And so you've stabilized your life.

So I like a paid-for home in this mix. And so, I mean, here's the thing. $4,800. But what will the house that's remaining bring in? $24,000. Okay. $25,000. And what are you paying in rent?

$1,150. Okay. $25,000. And what are you paying in rent? $1,150. Okay. So today the swing is not $4,800. You're going to still have $2,400, and you're not going to have $1,150 anymore. So we would take that $3,500 off the $4,800. So the swing is only $1,300. Okay. You see what I did? Yeah. Uh-huh. only 1,300. Okay. You see what I did?

Yeah, uh-huh. I do. Okay, great. Yeah, and I personally, I just we were just talking about it before the break, you know, the idea of having peace in good times and financial peace in bad times.

It's a big deal. It really is. And Andrea, you are about to delete risk. You are getting ready to get rid of risk in your rental properties as well as your primary home, young lady. So I love this plan. This is exactly what I would do. Do not overthink it. Don't try to rationalize.

We've done the math. Don't give it away, though. Yes. I mean, we're in the middle of a weird time, and if somebody wants to offer you $400 for a $450 house,'ll wait in the summer to sell it you know we're not we're not panicking here to do this but by the end of the year if you can pull this off that'd be the game plan yeah good stuff yeah it really is and that's a great question and uh you can tell dave that she was trying to process right your heart sometimes can get in the way of our math.

And so walking through, but just hear me out there, people. Getting debt out of your life removes risk. Nobody's calling you. Nobody's tugging at you. You then have the right to be the shot caller. Brian is in Ohio. Hey, Brian, welcome to the Dave Ramsey Show. Thank you, Dave and Chris.

It's an honor. Thanks. How can I help? So I'm trying to the Dave Ramsey Show. Thank you, Dave and Chris. It's an honor. Thanks. How can I help? So I'm trying to get some advice on retirement. I work in law enforcement, and I've been employed at my current position for the last eight and a half years. And I pay into PERS, which is like our retirement system. Right. And I believe that I pay approximately 15% and the employer puts in about 18%.

So my current, as of today, my current retirement with PERS is worth just under $70,000. However, I do have a Roth IRA and every month I have $500 extra that I'm not really sure what to do with. I divided between five different accounts trying to save for a car, retirement, some money for my son, and things like that. I'm trying to figure out if it would make more sense to contribute to my Roth IRA like I've been doing, just $50 at a time here and there, or if I should completely ax the Roth at this point since I do have the money with the PERS. Okay, on the PERS, you're mandatory 15% going in,

but do you have any control over what that's invested in? I don't. I actually just looked up a few days ago that I had 60 days upon my hiring to have it changed. I wish I would have opted into the investment portion of it, but it's too late at this point. Gotcha. What is your household income right now, Brian? It's just me. I make approximately $55,000. Okay. Are you renting or owning a home? I own my home. Unfortunately, it's a 30-year fix, and I owe about

$150,000 on it. Okay, I'll tell you what. We'll put you on hold. We'll come back from this break. We'll address the details on this and help you with it. Hey, thank you for calling in, man. Chris Hogan, Dave Ramsey, right here on The Dave Ramsey Show. We'll be right back. If you do this one simple thing that we all do, you are literally at risk of being hacked and someone stealing what you've worked so hard for. Do you ever use public Wi-Fi?

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That's CyberGhost VPN. Download it today from your app store and be secure in seconds. Chris Hogan and I are trying to do a little radio while in the midst of our goofing off here. Open phones at 888-825-5225. Talking to Brian in Ohio. He's got a mandatory contribution as a policeman to 15% of his income going into the pension fund, over which he has no control. He's making $55,000 a year, a single guy, and he's wondering what to do in addition to that, different than that, got a house with a 30-year mortgage.

And so, Brian, here's the thing. We tell people to put 15% of your household income into retirement. You are doing that. However, I am not real thrilled with the fact that you don't have any control over what this is invested in. It's basically a pension fund and since you don't have any control over it i wouldn't want that to be the only thing you do and so i i would say if i were in your shoes um another five hundred dollars a month into a would fully fund a roth ira uh in addition to this would make me really, really comfortable here. Because if that pension goes sideways, and they don't often go sideways,

they more often underperform because they're super conservative than going sideways. But if it does go sideways, and we've all read the stories of the pension plan that went broke, you know, then you're, you know, when you've got that money in that Roth, you are in control of what it's invested in. So I want you to put some into that. Chris, what are you thinking? Yeah, I think that's a good play, Brian. And the other thing I would tell you is if you get any raises or anything like that in your pay, you want to direct that money toward attacking and paying off the house.

Right. That's ultimately what my, like what my dilemma is now, is trying to figure out, I guess, if I should, you know, the $50 that I have here and there going into, you know, different like buckets of money for different aspects of my life. Like I said, there is one for retirement. $50 goes in there. $50 goes into like a Christmas fund. Obviously, Christmas comes every year.

I'm trying to buy a new car, trying to figure out what to do with that money, if it would make sense to put it all into like my Roth IRA or try to just put $500 extra towards my house. Yeah, I think I'm going to start with baby step four, which is 15% of your income going into retirement, and beef that up by $500 a month. Beyond that, I'm going to lay out your what you're calling what we call sinking funds when you're doing an every dollar budget, which means you set money aside for Christmas. You're setting money aside for a car, but that's out of other parts of your budget.

I just got to get you through baby step four before we start doing that stuff. And Brian, I'm proud of you, the progress you're making at this at this age and stage, buddy. Keep up the good work. Be safe out there, too, brother. Sarah're making at this age and stage, buddy. Keep up the good work. Be safe out there, too, brother. Sarah's with us in California. Hi, Sarah, and welcome to Dave Ramsey Show. Hi.

Hi, Dave. Thanks so much for taking the call. Sure. How can we help? I'm calling because me and my boyfriend are hoping and planning to get married next year, and we just started Financial Peace University to get our finances in order and kick our marriage off on the right foot next year. Wonderful. We're on baby step number two. I only have about $6,000 in credit card debt and no car payment, not including my home. And my boyfriend, on the other hand,

has about $75,000 in debt, $30,000 of which is a student loan, but $15,000 of which he owes to people like friends and family members, things like that. And I'm not sure how we work that into the debt snowball since it's not really an institution and these people probably aren't going to be too thrilled with $25 a month, $50 a month. Do we, if they're not really hurting for the money and hoping for it right now, should we focus on the institutions first and then pay them off when we get extra money? So, Sarah, as you look at this, you know we're hypothetically thinking and talking about

this because until you guys say we do, you don't, right? Right. Okay. Because you don't have it together. I mean, you guys aren't combining anything right now. This is individually. So we're talking about your boyfriend's situation until he becomes your fiancé and husband. But looking at this, you know.

Right, we share the household finances and all that. But do not share his, you don't share his debt. But don't share the debt, that's my point. That's a bad idea. He's focused on the debt, and I've taken on a little bit more in the household then. Okay. So he can focus on paying his debt down before we get married. Okay he needs to run a debt snowball you run them and then when you're married you run a combined one that's what Chris is. Yeah and so this $15,000

how much of it is owed to his family? He owes me like $7,500 of it and $8,000 is owed to his friends and family. Okay well upon the ring going on your finger, that debt would be forgiven then because you can't owe yourself money. That's weird. Right. Yeah. So that got rid of half of it. Okay.

Getting married gets rid of half of it. And so, because it would be kind of silly for you to pay yourself back. I mean, that's one pocket into the other. That's right. Anyway, so here's the thing that's bothering me more than anything we can answer your question tactically and technically and that is is that it goes in the debt snowball right in order uh and i wouldn't pay them 25 a month i would just build up the money in a separate account as if you were paying them payments but pay yourself

payments until you got that thousand dollars then send them a thousand bucks and pay them off whoever it is if it's a thousand dollar bet balance i get that you don't want a $25, the relative or the mother or whatever it is to death. The thing that I do want you to be comfortable with that's been addressed, and I really want him to be comfortable that's been addressed, is that this borrowing is a symptom of habit patterns in his life that need to be gone before you are married. Right. He actually was unemployed for most of our relationship

and just started a very good job. I've been unemployed and I never borrowed $15,000 from friends and family. Certainly not from my girlfriend. Yep, and that's why we're focused on this now and we're getting all of everything in order. I got it. I'm okay. I'm not mad at him. I'm just saying the debt is not the problem. It's the symptom, including when Dave Ramsey was stupid with debt, okay? It was a symptom of other stuff going on in my life, and I want to make sure,

old Uncle Dave wants to make sure that Sarah is real sure that whatever was wrong has been corrected because what was wrong caused this mess in his life. And I don't want you to have to do this over six times in the next three decades of your marriage because he never has addressed the heart issue that's around this. So as long as he's done that, I'm okay. And I would just work a debt snowball separately until you're married. And then once you're married, your $7,500 is forgiven, and the rest of it goes in the debt snowball, and you build up. Let's say you owe Mom $2,000. Just pay the money into a savings account until it's $2,000,

then send her a check for $2,000, as if you were paying payments, but you just pay them to yourself and still work them straight through. It's all debt. It's all got to go away, and the fastest, best way for it to go away, smallest to largest. That's exactly right. So Brittany's with us. Brittany is in California.

Hi, Brittany. How are you? Hi, Dave. How are you? Better than I deserve. What's up? I am calling with a tax question. There has been lots of talk about this stimulus package that we may receive,

and we all know that the government is not just going to give money away for free. So I want to know how can we possibly prepare to set aside taxes for this money that we're going to receive to pay it back at the end of the year. Oh, will the stimulus checks be taxable? I don't know if they're taxable, but I doubt it. That would be kind of weird. If they do decide to taxable. If they do make it taxable and you get a check for $1,000, you would set aside a fourth of it for taxes.

Okay. Because your tax bill is going to increase by that i doubt that it will be taxable that would be um i mean it would be classic but it would be just it would be so illogical it wouldn't surprise me though nothing surprises me at all nothing surprised me with those characters but i mean it's like hey here's some money oh give me some back i was just kidding do you feel stimulated yet i just i i honestly don't know i haven't read that much about it i've been so disinterested in the politics of it because it's so uh not a big deal it's more of a psychological thing than it is a reality so i haven't worried about it that much and i haven't honestly stayed on top of it have you read anything on it chris now i've been reading on it dave but i've not heard anything about the taxes at all in the money i would be highly shocked uh in one way that if it was taxable. You imagine the backlash?

I don't know. I mean, they just borrowed another $2 trillion of your money in debt to give you money, and there's no backlash on that, so I don't know. I mean, I have no idea. $2 trillion! $2 trillion. Makes my stomach hurt. It's a trillion here, it's a trillion there.

It's Washington. This is the Dave Ramsey Show. If you haven't heard, you need to go to DaveRamsey.com slash hope. There's a bunch of free and almost free resources there to help you during the 14-day shutdown that a lot of you are experiencing, including Financial Peace University for the first time ever in 30 years has a 14-day free trial for the online experience, so you can binge watch the entire thing during the 14 days if you wanted to it's only nine lessons long anyway it's chris hogan rachel cruz me anthony o'neill teaching you all the stuff that we've taught almost 10 million people in financial peace university over all these years not only how to get out of debt but how to be outrageously generous and some

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We're going to put it out all over the place. It's free. We just want to give you guys some facts because as our friend, newly minted Ramsey personality, Dr. D, Dr. John Deloney says, when you're in a crisis, facts are your friends. It calms you down when you know what's really going on. That's right. It really does. And it gives you clarity.

And so I want to encourage all of you out there to definitely make the time to tune into this. This Thursday, 7 o'clock Central, 8 p.m. Eastern. It is going to be information that will uplift you. It will be some factual. It will help you put things in context. As Dave's talking, I'm over here smiling because I know what's coming. I know it's going to have an opportunity to uplift a lot of people and help a lot of people right where they are. Our question of the day comes from

blinds.com. They're the number one online retailer of custom window coverings. You get free samples, free shipping, and with the new promos they run every month, you'll save even more. Use the promo code RAMSY to get the best possible deal. Rules and restrictions apply. Chris, our question comes from Kelsey in Ohio. My company awards restricted stock units, RSUs, and once they vest, we can cash them out. I'm on baby step two, and I have just under $5,000 that I can cash out. Do you recommend I cash it out and apply it to my debt snowball absolutely kelsey you want to cash those things out uh this was not anything that was earmarked toward retirement and use it absolutely

in your debt snowball which you know is attacking things small is the biggest and be very intentional about this moving forward did you guys guys notice that Chris didn't not, he not only didn't hesitate, he pounced. Absolutely. Absolutely. It's not, it wasn't like,

I don't want to think about this. There was no hesitation and he's exactly right. And I'll add to that, that an RSU, what that means is, is that you probably have some kind of a company that is either in it. its public, being publicly traded is fairly new. It's a recent IPO. It's something like that because they don't restrict stock units typically, unless it's just a vesting issue on a company that's been around a long time. They're trying

to keep people from bailing out and driving the stock price down on something that's a little bit more fragile. Translation, you own a stock that is probably, I'm guessing, but it is likely more volatile than Procter & Gamble. It's likely not a big company boring stock, right? Right. Of course, Procter & Gamble is making bank right now with hand sanitizer and toilet paper. Paper towels and things, yeah. Toilet paper, man. You can trade toilet paper, one sheet for anything right now. It's the new currency.

It's better than green presidents' faces. All right, Jeremy is in Iowa. Hi, Jeremy. Welcome to Dave Ramsey Show. Hey, guys. It's a pleasure to get to talk to you today.

You too. What's up? Hey, I had a quick question. With the recent decrease in the stock market, I was curious if now, even though I'm not in baby step seven, I'm in six, if it would be a good idea to do a Roth conversion on my 401k.

Well, as you sit and look at this, how much do you have in the Roth? I have a lot more on the Roth than the traditional. Currently in the traditional, I have about four grand. I could, four to five grand I could transfer. Four to five grand. Okay. All all right what's your household income uh just over 100 okay and so if you do this in that conversion you know you have to pay the taxes right yes i do okay so where's that refund back so it should be just take up some of that yeah so it'll cost you a thousand bucks1,000 in taxes. You make $100,000. You'd probably handle this, right?

Oh, yeah. Yeah. Yeah, not a big deal. I'd convert it. If it was $400,000, I'd stop and think about it, and I'd pay off my house first. Yeah, I'm only about a year away from paying off the house anyway. Yeah, but I mean, it's a $1,000 transaction. It's a $1,000 transaction we're discussing here because you're creating taxes of $1,000

just to clean up your portfolio, simplify it. That's all fine. And it's, of course, going to grow tax-free from this point forward, which is wonderful. Love a Roth. But the point being that if you had a – I don't want someone else listening who's got $400,000 in traditional and go, oh, I've got to roll that over and I'm going to take a $100,000 tax hit while I owe $70,000 on my house. No, I'd rather you pay off your house than do right first and then do that in a baby step seven behavior uh but in your case it's so small that it's not gonna versus your ratio to your income that's right it's not gonna it's not gonna matter so uh i'd

probably go ahead and do it just for the fun of that hey thanks for the call open phones at 888-825-5225 chris oken number one best bestselling author of the book Everyday Millionaires, and the book Retire Inspired, both number one bestsellers. And both of those books reeked with what we've done for the last two hours, and that was hope. There's hope to retire inspired. There's hope to be a millionaire. There's hope to survive what you're facing out there in the culture today. That's right.

There's hope. There is. Hope is greater than There's hope. There is. Hope is greater than fear. Yes, it is. And no matter what you're facing, I want you to hear that message loud and clear. And hope is something you have to reach for. It won't just come knock on the door. You've got to go get it.

Yeah, I love it. Thanks for hanging out this hour, Chris. Thank you for having me, Dave. This is The Dave Ramsey Show. or service and didn't have a chance to write it down, don't worry. We list everything you've heard about during this episode in the podcast show notes or head to DaveRamsey.com. Thanks for listening.