The Ramsey Show - App - You Have to Respect the Budget (Hour 2)

Episode Date: June 6, 2019

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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. We invite your calls about your life and your money. It's a free call at 888-825-5225. That's 888-825-5225. That's 888-825-5225. Jeanette is with us in Asheville, North Carolina. Hi, Jeanette. How are you?

I'm great. How are you? Better than I deserve. What's up? My question is, my husband and I are, we think we're ready to sell our home and move closer into our neighboring county for better internet service and access to schools and closer to our church. We bought our home about four years ago. My husband recently just took a sales job where he needs everyday access to the Internet, and it's just we have very poor service where we are, no access to cell phones. And so we've been working the baby steps for about two, two-and-a-half years,

and it's paid off about $75,000, and I'm still just left with my student loan to pay off. That's our mortgage. What's the balance on your student loan? About $55,000. Okay. And how much is your home worth? Last appraisal was about $215,000. And what do you owe?

$165,000. Okay. So you'll get a little out of it, not a ton. Yeah. Okay. Yeah. All right. And your question's what?

Is it smart to sell? At the stage we are now, we have a three-year-old and a one-and-a-half-year-old. And I know, you know, selling and buying and that whole process is a headache and, you know, stress, but at the same time, I'd like to get settled somewhere where we're going to grow our family, be closer to schools, have internet access. I would be closer to my job. We would be in the territory my husband covers and just build a foundation there. And I'm not opposed to downsizing either. We live in North Carolina. What's your household income? Currently it's $105, but that is going to grow when my husband starts getting more clients.

And he just took this job? Yes, sir. He was on the other side of the business in the kitchen operations manager. Now he's in the sales. There's two possibilities if I'm in your shoes. You can do whatever you want. You're adults, but you're called to ask me what I would do. And what I would do is one of two things. I would either sit tight and let his income come on up,

and the kids aren't going to school right now anyway. Or what we did when we were in a similar position to you, our kids' worst school age would be the difference, was we actually sold our home and rented in the district that we wanted to be in. And if you want to go ahead and make the move now for the convenience that you're outlining, it's not really for the school district today, but you're not going to be out of debt. And I'm not going to tell you to move. And I'm also going to guess and say where you're talking about moving is more expensive than where you live now.

It depends on which area of the county, yes. Okay. Yeah, I mean, if you want all of those things, I would sell and rent for maybe about a year and a half, two years, and then buy again. By then you would be debt-free and build up a good emergency fund and a good down payment, and then you're ready to buy. Also, by then we'll see what his income really does in the sales position, and it might help you make a much wiser choice in terms of how much to buy it off on the

house you might be get a lot nicer house by doing that's what i'm saying you might you know let's say his income goes way up which would be awesome we don't know that today today you can't buy on what might happen but if his income goes zoom zoom you could buy based on that and so i would either sit tight and wait on that to happen um and just bear the inconvenience for 18 to 24 months and get out of debt get your get your student loan paid off during that time um and you know your house will go up in value and you make a move then with that equity and you know with whatever else you're able to save. Or move and rent and get your debts cleaned up, get your emergency fund in place,

you can build up your down payment and buy again. Either one would be fine with me. Would I move and buy again? No, I would not. Not in your situation. I don't think that's wise. And I think then you're just stacking up rationalizations to buy something you're not really in a position to buy right now. Open phones at 888-825-5225.

Tanya is in Atlanta. Hi, Tanya. How are you? Hi, Dave. Fine. How are you? Better than I deserve. What's up?

Okay. So I've been dying to talk to you. I'm going to do it really quick. I'm kind of nervous. But my husband and I, we have a house with two kids, and we're thinking of selling. We have outstanding debt. We took out a second mortgage, so it's totaling about $204,000,

and then we have other debt, which is totaling about $60,000. So we weren't sure if we should sell and just roll it all over and then pay. What is your home worth? Right now, I don't even know how much it's worth. Roughly, roughly. Roughly, what's it worth? I don't know, $360,000. Okay.

And what do you owe on the first mortgage? $190,000. And what do you owe on the second mortgage? $50,000. Okay. And what do you owe on the first mortgage? $190,000. And what do you owe on the second mortgage? $50,000. Okay. So that's the $240,000 against $360,000. All right. I got you.

Right. And then you've got another $60,000 in debt. Is that what you said? Correct. And that's on what? That's on car. How much is the car? How much do you owe on the car roughly is about maybe 19

okay um we have a credit card debt was about 10 and we have uh like a home depot loan that we can log a kitchen with which is about 11 and then a 20 for my000 for my parents. $20,000 to your parents? Yes, yes. Okay. All right. And what's your household income? Between me and my husband, monthly is about $5,400, roughly. That's your take-home pay?

Yeah, a month between the both of us. Okay, so you're making about $85,000 a year probably? Probably, yes. Okay, all right, cool. All right, do you like your house? We do. Okay, I would keep it. And I would get in the business of paying off my debts. If you pay off $30,000, if you get on beans and rice, rice and beans,

and you pay off $30,000 worth of debts per year, you would be debt-free in two years. Debt-free in two years. Okay. My goal was three, but we can do it in two. Well, 85 minus 30 leaves 55. Not counting taxes. Okay.

Right. And that's the numbers I'm using. I'm not doing anything super, you know, brilliant here. I'm just looking at the big numbers. Is this doable? Yeah. You stop all of your 401k contributions you stop doing anything you put your life on beans and rice rice and beans because we want to keep this wonderful home and we're not going to sell it to pay off all these stupid debts that we have we're going to cut up our credit cards and we're going to get after it that's what we're going to do.

And that's the plan to do here. So, hey, thanks for the call. We appreciate you joining us. Open phones at 888-825-5225. You know, I get asked all the time, at what age should I buy life insurance? Let me be clear. If you have a family, if there are people depending on your income, now is the time to have term life insurance. I don't care if you're 20, 30, 40, 50, or whatever. Your age is less important than your financial situation.

If you have debt and a lack of savings, it makes no sense to risk your family's financial well-being based on the cost of a term life policy. Term life rates are just plain cheap, even if you're not in perfect health. And the best way to compare those rates is through Zander Insurance. Zander only sells the plans I recommend and shops among the top companies to find the best rates and the right coverage for you. Call 800-356-4282 or visit zander.com. You got no excuse to put this off, folks. Bad things happen to people all the time, regardless of age.

And it's your responsibility to deal with this. That's Zander.com or 800-356-4282. Chris is in Tucson, Arizona. Hi, Chris. Welcome to the Dave Ramsey Show. Hey, Dave. How are you doing? Better than I deserve. What's up?

So I've got a question for you. Our situation right now is currently I'm working full-time, but my job has allowed me the opportunity to go part-time and go back to school full-time. We're in the area here in Tucson. We're not really sure if we're going to be staying more than the next four or five years after I finish school. So right now we're on baby step 3B and also on baby step 4. So we're saving for a house and also putting our 15 percent into retirement so i was just calling to see which is going to be the better investment for us since we don't know for sure uh when we're going to buy a house we know that we want to

but i just wanted to get your input on just where we're at right now um when in doubt on a house don't um i love owning a home i think it's a great part of your long-term wealth building plan real estate is an essential part of millionaire data that we find owning a home and getting it paid off is an essential part of the data but where you're jumping in and out and about buying and selling buying and selling or not sure causing you to buy and sell buy and sell, buy and sell, you can end up losing more money on real estate than you would ever make on it. And it's not a thing to play with when you don't have any money, number one.

Number two, it's not a thing to play with when you don't have any time. And so I think I would let the dust settle a little bit on your career stuff here where you actually know what you're going to be doing and where you're going to be doing it and what you're going to be making. And then you're going to make a much wiser decision. It's the hardest thing. It's what we call in the investment world illiquid, meaning it's hard to turn into money fast. Real estate.

Go ahead. Oh, I'm sorry. So my question is because we are saving for a house, we know for sure that we don't want to buy in the next two years. Okay. Until, you're right, the dust settles. So we know for sure that that's not what we want to do. I just want to know, am I better off splitting into a house savings fund

for five years down the road and also putting into retirement or dumping into only one or the other? Well, I would put my 15% into retirement if I had five years. Okay. And then above that, what you can save towards a house, the more you can save towards a house, the better house you're going to get. Okay. Perfect.

That's where we're at. Yeah, it's both. I'd do both, but I would not reduce my 15%. And I would just call your house savings account kind of your baby step six right now. Pay off the house early. You know, the bigger your your down payment the faster you're going to pay it off and that's kind of you're working your baby step six even though you're renting until you get clear of you know these adjustments and the dust is settled and so forth joel is with us in fort

worth texas welcome to the dave ramsey show joel hey dave thanks for all you do, sir. Thank you. How can I help? Well, I just became debt-free about a month ago. Got lucky. Yay. Yeah, it's awesome. I got stationed in Fort Worth, Texas in 2014, built a home there, sold three and a half years later, and netted $90,000. Wow. Boom.

Yeah, that market is crazy. Very, very fortunate. So paid everything off completely, cars, card, student loan, even the cell phone, everything. I got zero debt whatsoever. College is kind of we're good to go. I've got a son who just graduated high school. His grandma's going to help with community college, and we'll pay cash for that too. And then he'll have some GI Bill benefits to go to finish up his bachelor's.

That's taken care of. We're going to do the same thing for my daughter here in about eight or nine years. So what I'm wondering is kind of what now? So I'm literally on the road transferring to San Diego, California right now. Um, and just kind of wondering what's, what's left. Should I stack three to six months of expenses? I'm going to retire from the, from the Navy in about, uh, three and a half years. Um have a nice little emergency fund and start saving on a down payment. I would have a nice emergency fund save on a down payment

because San Diego is another market where you can do what you did in Fort Worth. It's a quick-turn, high-increase market. Right. And so, you know, the problem with the military is sometimes you're stationed in a wonderful place like Fort Worth or San Diego where, by wonderful place, I mean the real estate market is wonderful. It grows fast and it sells fast. If it grows fast and it sells fast, you don't get stuck with it. But when you come out of the military, you may or may not stay in San Diego after three and a half years.

And if you don't stay, that house needs to be sold. And the good news is in San Diego, you can sell it. But if you're out in the cornfield somewhere and there's nothing out there but a military base, sometimes those houses are harder to sell. And so people get stuck with them in different markets depending on, you know, which branch of the military they were serving and where they were stationed and so forth. But if you're in a hot market like you just came out of, you know. Well, and I kind of, so I got into that market when it was nice and low, and then it just took off. And that's what I'm wondering about in San Diego right now is it's up to, you know, what is it in 2005 and 2006. Yeah, but the problem is it's not about where it used to be.

It's about where it's going in real estate. And the problem is right now in major metro markets there is a tremendous shortage. There's three buyers for every seller right now. If you're selling a house out there, folks, right now is the best time in probably the last 15 years to sell a house. Okay. the supply and if you remember economics from the seventh grade or whenever you took it when there is higher demand than there is supply that drives prices up and that's where you put people have people have their houses going on the market and it turns into an auction and they're getting 20 offers over the weekend and that kind of stuff um and so and that's not true in every market but major metro markets where the economy is booming, that's what we're seeing everywhere. I would not sweat it.

Now, if these interest rates jump up two points, it could freeze the whole thing like a deer in the headlights. That could slow it way down. But right now, man, it's as hot as I have ever seen it. I wouldn't worry about what it's done in the past. I'd be more concerned about where we're going in the future. And if I were you, I'd buy a house in San Diego. Okay. And thank you for your service to the country, by the way.

I appreciate you joining us. Folks, if you are thinking about buying or selling, right now you need a real estate agent more than ever before. What? The market's hot. I can sell it. Yeah, you can sell it, but you don't have any idea whether you sold it for the right price. And you have no idea what you're doing negotiating multiple offers at the same time you know how difficult that is to do that is to do without without an intermediary that knows what they're doing it's very difficult what if you got 18 offers how are you going to handle 18 different people back and forth only an experienced high

dollar high quality real estate agent can do that um what if you can put your house on the market right now and you don't know what to price it at i mean comps i looked at zillow what's that mean anybody try to use map quest back in the day yeah i'm not a fan of zillow they're not horrible they're just not good um and i wouldn't i wouldn't take my largest asset and base it on the internet Zillow equation. I would have a high-dollar, high-octane, high-protein real estate agent in my corner listing my house right now. If you're going to list a house, that's what you ought to do. Somebody that sells several hundred houses a year, 50 to 100 to 200 houses a year,

somebody that really knows what they're doing because, you know, a friend of mine put their house on the market the other day for 800 grand. It ended up bringing almost 900 by the time they finished the auction. It's crazy. But you really got to have somebody who knows how to dance that jig when it's coming up, man. That tune gets played. You got to know how to play it. And you got to look at all the different variations and look at the net.

And if you don't know how to net that offer out, the different possibilities of paying closing costs, paying closing costs whether you stay in the house for a while rent it back whatever the deal is you don't know how to net that out you will lose your behind people yeah you need to don't let a monkey sell your house monkey can sell a house right now that doesn't mean you got it sold right so don't let a monkey sell your house jump on dayramsey.com jump Jump on ELP for Real Estate. Click on ELP for Real Estate. You'll get somebody there to help you as a buyer navigate this, help you as a seller navigate this.

But for sure right now as a seller, I'd be scared to death to sell a house by myself right now if I didn't know what I was doing. This is the Dave Ramsey Show. Thank you. In the lobby of Ramsey Solutions, Angel and Johanna are with us. Hey, guys, how are you? Hi, David. How are you? Welcome. Where are you guys from? We're from New City, New York.

It's about 30 minutes north of New York City. Perfect. Well, good to have you in Nashville. Thanks for joining us. And all the way down here to do a debt-free screen. Yes, sir. Love it. How much have you paid off?

We paid off $70,128 in 12 months. In 12 months. Good for you. And your range of income during that time? We started at around $270, a little north of $300. Good for you. What do you guys do for a living? I'm a nurse practitioner.

I also was doing health and fitness at the time. I'm a New York City police officer for 23 years. Very cool. Good for you guys. Well, great incomes and careers. So what was the $70,000 worth of debt? $30,000 was a small mortgage, one of those balloon mortgages. The rest was cars, credit cards, and PayPal.

Okay. All right. So what happened 12 months ago that lit you guys on fire? Because you went after it. Yes, yes. So about five years ago, I heard of your name and your baby steps through one of the physicians I worked with at the time. And I went home and Googled your name and kind of created my own version of your program. I decided that I was going to skip one, go to two, maybe do three and four together.

I also kind of blamed that we lived in New York City and that it was too expensive and that it wouldn't work for New Yorkers. So I kind of, like, didn't really do it. And last year when we did our W-2s and did our taxes, I couldn't believe all the money and where the money had gone and kind of went into panic mode knowing that we were pretty much we weren't being good stewards you know of what we were what we had and we weren't really saving for college the way we should or making sure that we would retire with dignity.

Make too much money to be this broke. Exactly. So we kind of, you know, I decided to listen to your podcast, and I was going to listen for 15 minutes, and I couldn't shut you down. It's been tried before. Yes. I thought I was going to get it in 15 minutes. So after four hours of listening to you, I came home super, super excited and told my husband, we're doing the Dave Ramsey baby steps. And he said, oh no, we're not. Oh man. Every time she mentioned her, I mentioned your name. I was like, oh, here she goes again with

the Dave Ramsey guy all over. Here we go. Cussing in the house again. Oh my gosh. So Dave, I needed a strategy to bring him in. That night I downloaded your every dollar budgeting tool and input all of our income for the month and gave every dollar name like you recommend. And I couldn't believe we had an excess of $4,000. And I said, oh my God, we can pay off our car. And for the first time in our marriage, we won't have a car payment. So I show him that. That wasn't our smallest debt, but I knew it will give him the biggest impact. And so we did, and he agreed. And next month, we signed in for Financial Peace University.

Oh, just like that. Just like that. Boom. So you hooked him. Big time. Big time, Dave. Well, not really, because the first six months of the process, he really still didn't want to do it. He wouldn't want to do the budget with me. Uh-oh.

Well, you know what it is, Dave? You said something that really struck a chord with me. And you said, those who are in debt, you're robbing the kid's future. And I was driving home one night, and when you said that, I couldn't believe it. It really struck a chord with me. And that's when we kicked it into high gear. And actually, the last six months is when we really started just gazelle intensity. Yeah, we were getting ready to coordinate Financial Peace University, and I said to him, we can't stand in front of our church members

and preach something that you're not really doing. Oh, yeah. Well, teaching it will make you do it. That's for sure. For sure. And understanding the nobility of your kids, taking care of your kids and changing your family tree, that calls a man out. That really does.

Yeah, it sure does. Good for you guys. I'm proud of you guys. Well done. Thank you. Thank you. We both come from low-income families, so we knew that we have an opportunity to really change the legacy of our children.

So did you have people cheering you on while you were doing this? I don't know. I think most people, especially from New York, they thought it was a completely different idea they'd never heard of, not having a credit card or being debt-free. That would be true everywhere. That's not unique to New York. So I think after a while and they

saw that we were consistent, most people will come back and ask for the name of the program we were following. But for the most part, I think people were neutral. Yeah, they were neutral. Some people thought, you know, they thought this was a scam or anything. Absolutely not. This is if you follow the steps, it'll work for you.

Yeah, absolutely. Well done, you guys. Very, very well done. Thank you, Dave. What do you tell people the key to getting out of debt is? I think it's for couples not only dreaming together but executing together. You have to really put it into action together because when he locked arm with me

and we did it together, we really kicked it up the last six months because we were both on the same path. We were clear about our why. So I think that's key. And budgeting, you have to respect the budget. I always did the budgeting, but I never respected the budget. So respecting those numbers and really taking, you know those little decisions that you make every day that compound over time those are those small decisions that can come on and bite you so deciding whether we were going out to dinner or we were going to put it you know towards the debt little things like that for me was it was uh you got to trust the process you have to trust the process you cannot cherry pick step one and then go all the way to baby step four.

And then, okay, I'm going to revisit baby step one again. It just doesn't work that way. You have to be consistent and stay with the process. It works. Perfect. Prayer works as well. Amen. Amen.

That's a big deal, yeah. Very well done, you guys. Thank you, sir. Good job. Very proud of you. Congratulations. How does it feel? Great.

Fantastic. It feels good to know that our kids, you know, we won't have to have a conversation with them a couple of years from now that, hey, remember those vacations we took? There goes your college money. That's where you went. Hey, remember those dinners we took? So knowing that we're planning for their future and being able to launch them properly, debt-free, it feels amazing to be in control for sure.

Amen, amen. Well, we've got a copy of Chris Hogan's book for you, Retire Inspired. I want that to be the next chapter in your story where you're not only debt-free, but now you work towards being millionaires. You're well on your way. You've got a great income. You've got control. You learn to work together.

You've got all the elements of what you need to do. Very well done. You guys are heroes. Thank you, sir. Congratulations. Thank you, Dave. I want to say something. When we took Financial Peace University, we had a couple from New Jersey.

They were very vulnerable in their story and very transparent. And every Sunday when I went there, I felt, like, so inspired that if they were doing it, we could do it, too. So for our class now, I hope you guys get here one day too. Amen. Amen. So what are your kids' names and ages? Alejandro, he's 12 and Isabella, she's 10. All right. Very cool. All right. It's Angel and Johanna. $70,000 paid off in 12 months, making $270,000 to $300,000. Count it down. Let's hear a debt-free scream. You guys ready?

Three, two, one. We're debt-free! That's just love right there, man. I love it. Way to go, you guys. Wow. Wow. So you can do it. Way to go, you guys. Wow. Wow. So you can do it.

I mean, if you live in New York City or you live in California, you don't get a pass on math. Math works in those places, too. You've just got to decide how you're going to live. And, you know, most of you listening to this show, there's exceptions, I understand, but most of you make too this show, there's exceptions, I understand, but most of you make too much money to be broke. You're just not handling it well. I did the same thing. I tried to out-earn my stupidity for a long time. But when I started controlling where the dollars were going and making every dollar behave, making every dollar have a mission, making every dollar have an assignment. That's when everything changed.

Everything changed. It doesn't change until then. And like she said, you've got to use every dollar. You've got to get on the Every Dollar Budgeting Program. It takes about 10 minutes to set up. It's free. Did I mention that every dollar is free? Go to everydollar.com.

You can download it for your iPhone or your Android. You can use it on your desktop, whatever you want to do. It's amazing. But if you don't start making your money behave, you're going to always wonder where it went. You're either going to tell it what to do, your money, or you're going to wonder where it went. This is the Dave Ramsey Show. I'm Steve Schaff. Nick is with us in Asheville, North Carolina. Hi, Nick. Welcome to the Dave Ramsey Show. Hi, Nick. Hi, Dave. God bless you.

Thank you, sir. Thanks for having me on. Sure. My question would be very simple. Would it ever be a good idea, and I know your stance on loans and I respect it, would it ever be a good idea to take on a student loan if and only if your employer promised to pay it off for you after 10 years of service? No.

Okay. Because you could go to work for that employer and find out they're unethical and be gone in three months. I see. You could go to that work, work for that employer, and then get an offer to work someplace else for double the money. I see. You could go to work for that employer,

and how many times do I have to fill out the possible negative scenarios in this story? Yes, sir. You follow me? Yes, sir. Ten years is a long time being dead, Nick. The average person today has 14 jobs from the time they graduate from college until they retire, and four careers. Holy cow. That's the average.

And so 10 years on the job is highly unusual. Now, some people do. That's cool. There's nothing wrong with it. It's not to indict either direction, but that's not a strategy with those data points that you would want to entail. Hey, thanks for the call. Daniel is with us in Tulsa, Oklahoma. Hi, Daniel. How are

you? Oh, doing great. Thanks, Dave. So my question for you is, me and my wife, we have our house paid for. We're saving 15% toward retirement. Same for kids' college. We've been on your plan for several years, and we're seeing the benefits of that already. But at some point, as I look in the future here, most of my money that I've set aside already. But at some point as I look in the future here, most of my money that I've set aside is all in retirement accounts. And when I look at possible investments I want to do in the future, whether it be real estate or something else, I can't use my retirement money. And so when, if ever, is a good time to begin saving some money outside of retirement accounts

so that I can use that before retirement age. Gotcha. That's a good plan. It's called a gap plan, the gap between the time you actually retire, quote, unquote, and 59 1⁄2, you know, before you can get to stuff. So how old are you? 33. Okay.

Did you say your house is paid for? Yes. Way to go, man. Good for you? 33. Okay. Did you say your house is paid for? Yes. Way to go, man. Good for you. What's your household income? About $70,000, $75,000. Well done. Okay.

And how much is in retirement now? Somewhere between $150,000 and $200,000. I don't know. I've got a bunch in there for my kids, too. Yeah. You're killing it. Well done. Very well done at 33. Congratulations.

Well, so, yeah, we say at baby step four, you're at seven. But at baby step four, you're putting 15% of your income for retirement. Now, really, what retirement means when I say that is wealth. We're trying to build wealth so that we leave an inheritance to our children's children, so we put ourselves in a position to be outrageously generous. We're managing God's money for him. We're trying to build wealth, and that's what we're doing. So it doesn't matter to me really where it is.

It just becomes a strategy of how much of it we want to keep the government's hands off of. So I'm certainly going to max out Roth IRAs because that's going to grow tax-free. Is your 401K at work, Roth? Yes, it is. Okay. And I probably want to max that out, but maybe not. I mean, it's up to you.

If you want to back down a little bit on it at some point and say, I'm going to put some money over here in something simple, like maybe just an index fund, maybe an S&P 500 no-load, okay? Nothing wrong with that. And I'm going to park enough money there. And now that I already, you know, I'm already putting 15% away with my Roths and other stuff, but I want to crank it up a little more.

I'm going to put a little more in, and I'm not going to put that in a retirement account. And instead, it's just going to build up in that index fund, and I'll pay cash for a rental house later with it, or something like that. If that becomes your game plan, then, you know, that makes sense to me. There's no problem with that. Would I divert half of your retirement savings that direction? No, I would not.

No. But some, yeah, I think you would put some there because, you know, if you're already where you are at 33, at age 50, you're going to be in a different position. I don't predict that you will quit producing an income early, but you will be in a position where you don't have to produce an income. There's a difference.

Sure. Sure. You know, I've seen whether it's a vacation home or a rental property or whatever it is that I can't get because the funds are all different times. But I guess my point is that let's say that you didn't want to do what you're doing now at age 45 and you had enough money set aside to live off of the money you see that's what we're worried about here do you want to get there yeah but that doesn't mean you're going to just quit and do nothing you'll probably also create an income as a matter of

fact you'll probably create the greatest income of your life at that point um but you know it's not always doesn't always happen that way but but it often does. So the point of planning for retirement really is to build wealth. It's not necessarily to never create an income again. I haven't had a need, a financial need, to create an income for many, many years. But I continue to do it because I enjoy what I do, number one, and it's having an impact. Number two, I do it because it enables me to give more generously with bigger zeros on uh and so i work for that now that's why i work now and um and i enjoy my life you know i don't i have no desire to spend 24 7 on a golf course or fishing at the lake i i want to produce something

i get more joy out of that than i do recreation yeah i want to recreate too and recreate in style but uh i want you know i want to do cheap i want to do it great right but but that's not my reason for building wealth it's not a hedonistic reason where i'm just building enough wealth that i don't have to that all i can think about is me you know that's not the goal there's no joy in that long term but all of that to say yes you need some gap stuff you're doing very very well and i would do some stuff that was not in a retirement plan right along the lines of what you're talking about uh theresa is with us in canada hi theresa welcome to the dave ramsey show yes hello wow i'm speaking to you i can't believe it anyways um my question is i'm trying to decide whether I should take my pension early.

I'm currently not self-employed. Listening to you, we've decided we took consideration of it since I had left. This is a government pension that I thought I'd see if I could roll it into some pension investment here. But I called them them and they said, no, I can't roll it at this point anywhere. My only option is I will have to take the pension. Now, the interesting thing is I get the full pension at age 60, but I actually become 50 this year and I can start taking the pension this year,

but that's a 5% penalty per year on that. Yeah, I would take it. Yeah. And invest it. Okay. That was going to be my next question. We're in Baby Step 2. Should I start just investing that, or should I go on?

Well, I would throw it at Baby Step 2. Take it as extra income. Throw it at Baby Step 2. But basically, from an investment standpoint uh when you die that money's gone yes and so any money you can get out of their hands any any money you get out of their hands before you die into your name survives you right and so i'm going to take it early and often unless the penalty is just astronomical this is a very high penalty it would make me it would give me pause you may want to sit down with an investment professional and actually get you know someone to crunch some numbers with you and

see five percent a year for 10 years is 50 percent uh does that mean we're cutting your pension from 60 on by 50 percent because you started taking it now hey that one's a question you know that's one to look at and really look at you know know, have somebody that's in that's an investment advisor sit down, help you crunch those numbers and look at it. But generally speaking, yeah, we're going to take the investments as early as we can or the pensions as early as we can, preferably in a lump sum. You can't do that so that we get the money out of the pension's hands because it dies when you do. And you've got more use for it while you're alive. And if you don't use it in some way while you're alive, it survives you this way. And that's why we do that.

So good question. Thank you for joining us. Colin is on Twitter with today's constant data breaches. Is identity theft insurance a smart move or a bad idea? Well, Colin, I endorse identity theft protection from Zander Insurance, and I have for many years because of that.

I think it's a necessary idea. You want to be sure if you're buying ID theft insurance that you are getting the kind that assigns someone to do the work to clean up the problem of having your identity theft, having your identity stolen, because that's the problem. It's not that you owe money.

It takes 100 hours to get one of these accounts cleared, and it wasn't even your fault. And so that's what you need, and that's why I endorse Zander Insurance and why I have Zander Insurance's identity theft on all of my employees and all of my family and me. This is The Dave Ramsey Show. This is James Childs, producer of The Dave Ramsey Show. Did you know you can now listen to The Dave Ramsey Show on Pandora and Spotify? For all the ways to watch and listen, check out our show page at Dave Ramsey.com slash show.