The Ramsey Show - App - You Need a Plan for Your Money (Hour 2)

Episode Date: August 29, 2022

George Kamel & Kristina Ellis discuss: How to best save for college, Applying for scholarships later in life, Selling your home, Advising family on their money situations, What to do with an old 401(k). Want a plan for your money? Find out where to start: https://bit.ly/3nInETX Listen to all The Ramsey Network podcasts: https://bit.ly/3GxiXm6 Learn more about your ad choices. https://www.megaphone.fm/adchoices Ramsey Solutions Privacy Policy

Девочка-пай From Ramsey Network, this is The Ramsey Show, where we help you get control of your money, get ahead in your career, and get on the path to living well. I'm George Camel, host of the Fine Print and Entree Leadership Podcast on The Ramsey Network, joined today by bestselling author Christina Ellis. And we are excited to take your calls about life, money, investing, emergency funds, paying off debt, how to pay for college, how to get rid of student loans, you name it, we are here for you, America. The number to call is 888-825-5225. Melody kicks us off in Miami. Melody, welcome to the show.

Hi, thank you so much for taking my call. We are happy to take it. You are so excited, and we love that for you. Awesome. So I'm on Baby Step, or we are on Baby Step 4, 5, and 6, and I'm trying to get more refined in how I do the paying for college. I've done a couple things or my husband and I have, uh, like doing prepaid tuition, which I know you don't recommend. And we're also within

spitting distance of, um, paying off our mortgage. So just trying to refine what I'm doing there. All right. How old are the kids? Uh, 12 and eight. All right. And what's your income? $320 before gross. Well, that's great news. Fantastic income. And where are you guys at currently with saving for college? Well, we have prepaid tuition, which is like a four-year university plan, which the value of that,

if we can take it out, is $26,000 and $27,000. This is about the same. And we've got a UTMA for my son that's like $10,000 and a cover bill, and then another $529,000, which I'm not sure exactly where that is because I didn't do it. That was my husband, but I got to look into that. And then for my daughter, who's the 8-year-old, we also have a UTMA and Everdill on 529. So total for my son, who's 12, we've got about 40, and then plus that prepaid tuition, and then for my daughter's 25 and the prepaid tuition. Awesome. Well, you guys are doing great. Yeah. Are you worried about not being able to afford it?

Yeah. I mean, because I've heard, you know, numbers like 180 for each kid and those kind of numbers. I'm wondering if we can even meet for the 12 year olds. And I'm just wondering if I'm being wise with, you know, three years ago, I thought, okay, babysit five, I'm just going to put it towards prepaid college and I'll be done. But well, that's not exactly, that's not going to pay for much. So with room and board and all that. Well, yeah, like Georgia, I think you guys are doing awesome. This is a great start. I'm kind of curious, what has been your process for planning for this? Have you all kind of sat down and projected about how much you think each college or each student will spend or what's your process look like? Well, it's pretty disorganized, as you can probably tell.

We've had various meetings, you know, what would you like to do, this, that, or the other thing, and we just kind of have done it all without the end goal in mind. And that's kind of where I think where I would start is I think you all are doing. And I think your heart's in the right place. I think you all are prepared to plan. But yeah, you said it kind of feels a bit disorganized. And I think that's where some of that anxiety is coming from kind of know it not knowing what the target is, but yet feeling this weight of a mountain of college costs in the near future. Well, how do you determine the target, though? I mean, I guess the SmartVestor Pro is the way to go, but, you know, just like... Yeah, so you can go with the SmartVestor Pro. They can help you figure out about exactly how

much you need to be saving monthly to get to around where you want to get, but you could also go online. There are a lot of calculators where you can type in, you know, if you think your student's going to go to public school, the cost cost of public school and then it'll break down about how much you need to be saving each year in order to meet that goal and you can do the same thing with private school but kind of you know it'll give you a ballpark so that you can kind of know how much you should be contributing monthly and if you're on track right so what about this prepaid tuition thing? Should I try to get out of that and try to be more proactive? Do you know if there's penalties with that exact plan to get out of it? There's no penalty.

There's no penalty. It's just you get what you put in as long as your kid hasn't gone to college yet. Yeah. Well, if you can move that over to some of these other ones, like the Coverdell 529 I would do that are y'all working with a smart investor pro right now you know I would I'm looking at your income and going wow that's impressive and amazing and with three hundred twenty thousand dollars to invest and kind of figure out what you want to do I would definitely sit down with somebody and

they can help you get organized with all these different accounts that you kind of have outstanding. They can help you figure out, you know, what's the best vehicle to save in? How much do I need to be saving, you know, each month and just kind of get organized in your finances? Because I think that's where some of this just like anxiety is coming from. I think you guys are on a great pace, especially with that income. I think you're going to be able to definitely reach a really good spot in your college savings. But I think it'd just be helpful to have a plan, a really clear, succinct plan. Melody, what's left on the mortgage? 50. 50. That's amazing. Yeah, I know. It's amazing. So just walk this out with me, Melody. You're going to have a paid-for house

within the next year. Yes. Okay. So then we still have another five years for the first kid to even start college and we're making $320,000 and it probably is only going to go up over the next few years. And you're telling me you wouldn't be able to cash flow the rest of school if you had, let's say, $100,000 in there and school was going to cost $120,000 for the four years. You guys could cash flow this easily. Really? Well, we were thinking with the mortgage being paid off that my husband could get a job that he would love more and that would kind of give us a little more. You'd take a pay cut, but he'd enjoy it.

Yeah, so he doesn't have to worry about, you know, making as much as he needs to. You know, he probably will. I mean, I don't know why he wouldn't, but I think that's just one of his, you know, just a little less stress. About how much of a pay cut are you looking at? Well, I mean, he could go, we make about the same,

but he makes a little more. Because, I mean, even if he took a 40 or 80,000 payments in the world and you're still making 250 or 220 yeah i mean you can still cash flow all of this or something i mean i i can't imagine still being in the field and still you know doing that because he's an engineer engineering manager manager. But, yeah, so you're thinking we can just cash flow the 12-year-olds? Absolutely. Oh. Whatever the gap is.

So, again, we don't know what college is going to cost. We don't know what the 12-year-old is going to do. And so let's say school is going to cost $160,000, and you guys have $100,000 by the time he's 18, right? Right. Well, at that point, we know the gap. It's 60 grand and we need to cover that over the next four years. So we need to come up with 20 grand, you know, for three years if we can cash flow the first. So I think we just come up with

a plan. I think a SmartVestor Pro is going to give you a lot of confidence in the plan. And right now, it seems like you're doing 17 things at once and just hoping for the best. And I want to give you a little more clarity in this is what the future is going to look like if we follow this plan. So get connected with one of ramsaysolutions.com. But you guys are doing great. With that kind of income and the fact that you're already saving and the kids are young, I think you can breathe easy and sleep well tonight. You guys have done really well. Great, great work. These are the kind of parents we need in the world, Christina. Right. Love it. This is The Ramsey Show. every time you hear someone do a debt-free scream on the show it's because at some point they said

enough i'm not living like this anymore. I've had it. And when you get mad like that and do what they did, your life will change too. And right now, inflation and stupid credit cards are killing you. You've started to believe that you're not in control of your money, but you'd be wrong. You get to decide to control what you can control. And that's you, the guy in the mirror, the lady in the mirror, your behavior. You have the power to change your future. And Financial Peace University will show you how. This is the same course I went through almost a decade ago now that changed the way I handled money, changed the way I looked at money. It's a proven

step-by-step plan that nearly 10 million people have used to beat debt, master budgeting, and build wealth. And you can do this too. Guys, stop letting debt and money stress control your life. Just say enough and take back your control. It's that simple and it's that hard. You can start Financial Peace University at ramsaysolutions.com slash enough. That's ramsaysolutions.com slash enough. All right, Christina, you know what time it is. It's time for our blinds.com question of the day. Their 100% satisfaction guarantee means even if you mismeasure or you pick the wrong color, they'll remake your blinds for free.

You get free samples, free shipping, and with the new promos they run every month, you'll save even more. Use the promo code Ramsey to get the best deal. Today's question comes from Gavin in Ohio. I'm 30 years old and I'm thinking about switching careers. I'm an HVAC technician but would like to jump into the nursing field. I like the trades but it's just hard on your body. I was wondering how a person trying to get back into college would go about applying for scholarships. It seems like there are very

few scholarships out there for people changing careers later in life My wife and I are out of debt and I don't want to go back into debt Well good for you for starting from that position I love that you've already put that line in the sand and you're saying hey I want to change but i'm not going to go crazy with and i'm not going to go into debt to do it um The cool thing is is while while it may be a little bit more challenging to find scholarships There are a lot of programs to help you go back to school. For example, here in Tennessee, there's a program called Tennessee Reconnect, where it offers help and funding and guidance for adults who maybe did

a different career and want to go back and get a four-year degree. So I would start looking there. I would also consider tuition assistance programs. So there are a lot of companies or hospitals or labs that offer assistance for you to go back and get a degree. So perhaps you can get it completely paid for by an employer while still earning some money. Absolutely. And I was just Googling, you know, nursing programs in Ohio and seeing what it actually costs. So that's part of the homework is going, what does this cost? Where is the most affordable place I can go? You don't need to go to the best nursing school in the country. And then know that it's not going to be a jump into the nursing field. This is going to take some time. You're going to have to really commit to this. And that might mean delaying this

dream by a few years. Keep working on HVAC. Kill it. You guys are out of debt, which is awesome. Let's start saving up as much cash as possible in order to cash flow this while we do our homework and look at all the programs and scholarships and tuition assistance that are out there. And that gives us a clear game plan. Christina, I feel like a lot of people just kind of wander in. They go, I don't really know what this is going to... I'll just take out loans. It'll be easier. Instead of just doing the hard work of going, okay, what is this going to cost? Let's make a plan to get there. And debt is off the table. It's not an option. And that means we're going to get creative and we're going to work really hard to figure out how we're going to pay cash for this.

Well, and it's a little bit of work on the front end. When you really think about it, it seems like it's just easier to just jump in and start figuring it out later. But it's like, actually, if you take a two hour planning session on a Saturday and you lay this out and you do the research and you see all the options out there, it can literally save you thousands and thousands of dollars in the long run. But I love that line in the sand. I think Gavin has a great position starting saying, hey, I want this, but I'm not going into debt to do this. That's awesome. It starts with that decision. We're rooting for you, man. Thank you so much for the question. All right. Open phones this hour, 888-825-5225. Kylie joins us up next in Salt Lake City. Kylie,

welcome to The Ramsey Show. Hi, thank you so much for taking my call. Absolutely. How can Christina and I help? Hey, I just have a question. We are completely debt-free except for our house. We owe about $140,000 on it. And my question is, would it be, we, my dad built me this house 10 years ago. And so we have emotional ties to it. He's since passed away, but I am wanting to not work anymore and stay home with my kids. And so we're wondering if we should sell, we, we have quite a bit of equity in it. We built it in 2012 and we're wondering if we should sell it and buy a house outright with cash and leave the community that we love and the house that my dad

built me and pay for a house in cash and be able to be a stay-at-home mom. How much equity do you have in this house? We have, well, it's currently appraised for about $750,000, so what would that be? That's awesome. So we're talking about $600,000. Yeah. And what's about the price point you're looking at for other houses in the community? You said it's in the same town? Oh, no. We would have to leave our community. Yeah. How much further out would you have to go? About 30, 20, 30 miles away. Okay. And does that affect work at all for your spouse? Well, I'm a hairstylist. I work out of my house, but the goal is to not work. And so I would be giving that up completely because my clientele is in my community, mostly, that I live. But for my husband, it wouldn't.

Is it an option for you guys to stay in the home and still cover the mortgage and have it be a reasonable portion of your take-home pay? Well, I would just have to work. We could stay stay in here you're saying you couldn't afford it just on your spouse's income correct uh okay how much does your husband make where we have young kids he makes he makes about 75 000 a year okay what's your mortgage payment 1300 okay and what's his uh take-home pay he brings home about seventeen hundred eighteen hundred every two weeks so every two weeks okay so close to four grand a month it doesn't seem like that's wildly out of the ballpark. Is that on a 30-year fixed rate mortgage or 15? That's on a 20.

On a 20. Okay. I'm wondering if we can make these numbers work. I assume that's after he's investing. You guys said you're out of debt with an emergency fund. Are you guys currently investing? Right. No, he just put 15% in his 401k.

Okay. Does that affect that take-home pay? Yeah. Well, that's what his checks are his 401k. Okay. Does that affect that take-home pay? Yeah. Well, that's what, I mean, that's what his checks are every two weeks. Okay. About $1,700. I think if we can get his income up just a little bit, we can stay in this house if this is the dream.

Well, and just even tightening the budget, because when I hear $75k and a $1,300 payment, that does seem doable. If you said the mortgage payment's $3,000, I'd go, oh my gosh gosh this is killing you guys or if he was making 40 but yeah i don't see this as a huge problem if we can just get his income up a little bit and get this house paid off because it sounds like you really want to stay there but you also really want to stay at home and that's a tough right you're trying to weigh those two going what's more important um right I mean, at some point you may have to leave this house. And so at some point we have to say goodbye and kind of grieve, you know, the emotional attachment of this very special home that your father built

and clearly did a great job. Yeah. And you said you want to stay home with the kids. Do you currently, is your salon outside of the home? No, it's inside of my home. I work about three full days a week. Do you think that you can... It's starting to cut into their sports and their extracurriculars. I wonder if you could kind of back things down kind of gradually, especially if you're kind of feeling uncomfortable with the idea of going from having your income to not,

and that's obviously making you consider the house situation and selling it. Could you kind of back it down slowly, maybe go down to like one day a week or even a half a day a week, just so you have a little bit more buffer room? How would that feel? Extra, yeah. Have you guys looked into refinancing to a 15-year and seeing if that actually lowers the payment because of how much equity you have? No, we haven't.

It might. Did we do that? I didn't know that that was. I would reach out to Churchill and just crunch some numbers with them and see if we can get that further down without extending the loan, without raising the interest rate on this. But that might be an option. I don't see this as a fire scenario where I'm going, you got to sell the house. That would be a worst, worst case scenario if this is really stressing you guys out and things are still too tight, that's when I'd start looking at that option. Yeah. I think there's a possibility for a lot of creative solutions. I

love that we look at this situation and it's like, you can do this, you can do this. You can try all these different scenarios before you have to sell this house that you love so much. That's a big move. It's costly. And I'd only recommend it if it really catapults you, you know, further in the baby steps. And right now it's not really doing that. And this house is really special. This is The Ramsey Show. I'm George Campbell, joined by Christina Ellis today. And we're taking your calls, 888-825-5225. Xavier joins us in Jacksonville, Florida. Xavier, welcome to the show.

Hey, how's it going? Thanks for having me. Absolutely. How can we help today? Hey, I just have a quick question. So I love everything you guys do and thank you very much. I appreciate it. I've learned so much from you guys that I wish they would have talked to us in high school. I'm 35. I'm actually calling on behalf of my mother. She came to me with a question about financial advice, and I really don't know what direction to send her or what advice to give her. My parents had to file for bankruptcy about 10 years ago. They bounced back from that, got better credit scores. Everything was good. My mom has kept a separate ledger. She's great on that. But unfortunately,

my dad did dive back into about $40,000 in credit card debt, including an auto loan. And she had asked me, she's thinking about, I think, refinancing her mortgage, their mortgage, and taking a cash out option to pay off his debt. Does that sound like a good idea? Because I don't really know anything about that. I don't own a home yet. But for some reason, I'm just getting bad vibes from it. It doesn't sound like a very smart financial decision. Well, you are a wise young man. And the fact that your mom came to you for financial advice tells me she knows that you have that kind of wisdom. And so you're right. We never advise a cash out refi unless there's a divorce situation where you have to let go of the money. So in that situation, I would say she's got to focus on paying off this debt.

That's the only way to pay off debt is to pay off debt. And the cash out refi is a shortcut, but what it does is set her on a path backwards to paying off her mortgage, which means she's not going to be able to retire with dignity. Right. And that's what I'm worried about. Cause you know, they're 55. So, you know, wanting to retire hopefully in the next 15 years, I just, I'm like, I feel like you're going to be eating into your retirement. It's just not a smart idea. And I personally have always worn away from credit cards. I have zero credit card debt. And so I'm still working on baby step two,

but all right. I just wanted to make sure I gave her the right advice on that. So I do appreciate that. What's the car loan? How much? Do you know? What, I paid off? Oh, you said they have a car loan? Oh, the auto loan, yeah. So my dad had an auto loan for about $10,000 on a truck.

I think, if I remember correctly, the bank offered him a settlement of $4,000 to pay it off because, unfortunately, he's been out of work for the last couple of years. And they were just, they're one, trying to repossess it, but two, they're like, listen, give us four grand and we'll call it even, you know, obviously settling for less than the full balance. And do they do it? I told him, I said, if she can get ahold of the bank, that would be the smartest option to go with that and then work on the credit cards later on. But I just felt like, you know, taking the cash out. I basically look at it as like a cash advance on your house. And it just doesn't make sense. You wouldn't do it on a credit card. Don't do it on your house. Hey, have they taken financial peace? No, they have not. No,

I personally have just stumbled upon the whole Ramsey Network in the last couple of months. I recently got into a new profession that I'm really loving and have quadrupled my income. And so I'm like, okay, I need to, you know, do everything the smart way and, and really, you know, make the right decisions for, for moving forward. And so I, I have no credit card debt. I actually just sold my car a couple of weeks ago. Cause I was my payments for like $900 a month. And I'm like, I don't want it anymore. I have, I have another truck that, you know, it's an old hooky, but you know, a hundred dollars every couple of weeks is nothing compared, you know, for a random part that might break versus the 900 that I have to pay every month. Well, I love your crazy. I love your enthusiasm. That's amazing. And I would just encourage you to take that raw, excited enthusiasm and share that with your

parents. Say, hey, I just found this plan. I am so excited about it. I'm just jazzed. This is how my life is changing. This is what I've done with my income. And just encourage them to take this journey with you. Because with your dad going out and taking that extra debt without your mom knowing, it does sound like there's kind of some mindset stuff going on. So, you know, the refinance, all these different things, you know, that could kind of be a quick solution. But I think what really needs to happen is some heart change and for him to really buy into a program alongside your mom, especially so they can work together in the next 10 to 15 years and really make deep progress versus your mom kind of having that fear of, you know, is he really on board or are we just trying to figure out something really quick so we don't, you know, we're not in debt in the immediate term? Yeah. Do you live near them? Yes, yes. I actually ended up having to move back in with them just before COVID hit because they both lost their jobs.

And so I was covering the mortgage. I was in school at the time. I had to drop out of school to work over time to cover the mortgage. And so I'm hoping that one day I can go back. But for right now, I just got my CDL and things have been, and that was the big thing that worried me. I'm like, okay, what if you refinance? What if you do this? What if you do this? And what if something happens where you're in the hospital? I'm like, this doesn't make any sense. You guys, like, I know I'm younger than you, and I know parents know best, but it just doesn't make sense, like the numbers are the numbers. Yeah.

Well, Xavier, I'm going to do you a solid here. We're going to gift you Financial Peace University to go through with your parents. I want you to sit down every week, or if you guys want to watch more than that, sit down, watch all nine lessons with them, have some hard conversations and be their cheerleader. Be that supportive voice that says, you guys can do this. We're going to get back to work. We're going to get our incomes up when we can. Obviously your mom's health plays a huge part in this. And so it might take longer, but if they want to retire and not be stressed about money and instead be able to focus on getting your health in order, then this is a

huge step, getting them completely debt free. So hang on the line. Austin will pick up and we'll hook you up with Financial Peace University as well as our budgeting tool, EveryDollar. Well, I think it's so cool that you're doing it in this spot where you're actually going through it with them. This isn't a spot where you're on baby step seven and you're coming back and going, this is how you do it. And the parents feel shame and guilt and it becomes this uncomfortable conversation. You are walking through this right now. You are jazzed. You are on fire. And I think if you're just authentic with that, that's a whole different approach. I think they're way more likely to get on board when it's coming from this spot of genuine heart

change where you're going through it yourself. You're motivated. You're excited. And they can just jump on board with you. Way to go, Xavier. All right. Stephen joins us up next in Dallas, Texas. Stephen, welcome to the show. Hey there. How are you? Doing great. What's going on with you? So I'm trying to determine if I should, I've got a taxable investment account that I was set up with that I've contributed to for the past few years. And it's almost enough to clear out the mortgage. Oh, it's awesome. Now, obviously, there's some tax implications, right? Because it's, you know, the growth, anything that has growth on it would be taxable.

But I'm just kind of trying to figure out, okay, should I do this? It's, you know, it's a substantial amount, enough amount where I'm just uneasy about it, right, to lose that money that's sitting there available. How much is in that account? $200. And how much is in that account? $200. And how much is left on your mortgage? $242. And I have the other amount in my checking. Does that include your emergency fund,

or could you clear this without touching the emergency fund? Without. Wow. The emergency fund would be separate. How long have these investments been in there? Would you be looking at long-term capital gain rates? They started in, I started it in 2017. Oh, great. When's your last contribution? It's monthly. It comes out every person. So you'd have a lot less capital gains because of how long it's been sitting in there, which makes me feel better. And so it really depends on what's your income that you file taxes with? It fluctuates, but I would say it's safe to say $240. And that's single or do you have a spouse?

Single. I mean, I have a spouse, but that's a single income. So you're probably looking at a 15% rate on the capital gains there. Okay. So I'd connect with a tax pro and crunch the numbers of what you're going to owe. But as long as you have that amount set aside and you pay the taxes on that, dude, pay off the mortgage. That's amazing. Okay. Well, I appreciate it. I appreciate the additional encouragement on it because it's hard to part with that. That's a lot of money sitting there, but you know what? Freedom's on the other side of you cashing that thing out and paying off that mortgage. And that is priceless. That's super exciting. And then you have a fantastic income and it all stays with you. Imagine that. It all stays with Steven and your hard work, man.

It has paid off. Your diligence, your consistency, your discipline in investing. That's inspiring. Way to go, man. We're so, so happy for you. Come and do a debt-free scream. Why won't you? I mean, that'll be fun, right?

Yeah, we'd love that. Even if you use the investment account. That's an incredible, incredible achievement that most Americans don't even get to. So we're proud of you, man. This is The Ramsey Show. Open phones, 888-825-5225. Lori joins us up next in Spokane, Washington. Lori, welcome to The Ramsey Show. First off, I want to thank you for taking my call and let you know you guys do a great job. Oh, thank you. My question is,

you're welcome. My question is, I live on Social Security, and I have a large amount of cash in my savings account. With the new law that's just come out with the IRS and everything, I'm kind of afraid of what's going to happen with that money. It's in a very low-interest account, so I'm not really making a lot. Should I take it out, buy gold? I'm afraid of the stock market, so I'm kind of lost and asking for your help. Well, we appreciate the call, Lori. How old are you? I'm 62.

Okay. And you're not working? No, I'm currently on Social Security Disability. Okay. What does that amount to every month? About $14.67. All right. And that's all the money you have coming in?

Yes. Are you able to survive and put food on the table and cover your bills? Yes. I sold my house last year, and I bought a fifth wheel, so I travel. But I'm afraid to leave that money in my account. I don't know what they're going to do with it with the digital currency thing they're talking about and the IRS stuff. How much money is in that account? I just make sure that my money's protected. A little over $100,000. All right. Well, I want to ease your fears.

A Roth IRA for about $900. $900 in the Roth IRA? Yeah. Okay. And this is just in a general savings account? The $100,000? Yes. Okay. Well, for starters, until we do something more drastic with it, you could put it in a high-yield online savings account, which would give you, you know, right now the interest rates are sitting at about 1.7%, 2%,

somewhere around there. What's your money making right now? Okay. 0.1%, I think. Okay. So we can do better than that. The long-term solution would be to connect with one of our SmartVestor pros and make this money work for you and get it into the stock market. I'm not talking about risky single stocks. We're not going to mess with gold.

We're not going to mess with digital currency. We're going to put it in mutual funds and index funds that are diversified. And what that means is we're not investing in one single company or one single thing. We're investing across a whole lot of things that have a proven track record. Okay. But I would not put it in precious metals. Gold's got a terrible rate of return. That's not going to get you through retirement. And the best way to do it is to create some cash flow off of that $100,000. And it could, you know, with a 10% return in the market, let's say,

that could create $10,000 worth of income for you for a while. And, Lori, I'm wondering, what's kind of the long-term plan in terms of housing? You said you sold your house and you're in a fifth wheel now. Is that – how long do you think you sold your house and you're in a fifth wheel now. Is that, how long do you think you plan on living there? Oh, you know, as long as I can, I'm sure enjoying the traveling. But there's going to come a point where I'm not going to be able to physically do this by myself. So I'm guessing, I guess another 10 to 15 years, maybe. Well, that's another spot you could put the money is in real estate.

I mean, at some point, if you're not going to be living in a fifth wheel, it might be great to buy a little condo somewhere. It may not be huge with $100,000, but you could buy somewhere that could be somewhere you could stay and live out, you know, the rest of your life, somewhere that's solid and you're not going to have to worry about it eating into the rest of your budget. How would you feel about buying property? Well, because I only make a limited income, I'm not sure if that's enough to even be able to buy property and have something left for emergencies or anything like that. Is that $100,000? Is that everything to your name, that $100,000?

Yes, sir. Okay. So we need to set aside three to six months of expenses. You don't have any debt of any kind? I have no debt. I just, my car insurance and my fifth wheel insurance. Okay, great. And fuel and food. So I would set aside at least $10,000 or $15,000 of that. And the rest, I would look at investing with one of our smart investor pros into good growth stock mutual funds index funds that can grow at a much higher rate than 0.01% because that sucks. Yes it does and so and do you have a suggestion of who I may contact or I mean it's hard to know anymore out there who you can trust. Well, I've got good news for you. We have an entire team here at Ramsey that vets investment professionals across the country, including in the Spokane area.

And so you can trust that they're going to take good care of you. I still want you to interview a few of them and work with the one that you have the best chemistry with, that you trust the most. And their job is to not tell you what to do with this money. It's to educate you and make you feel confident in that decision. And so you can jump onto ramseysolutions.com and click on trusted pros and you'll just enter your zip code and it'll show you a list of about five pros in your area and give them a call or they'll contact you and we can start from there. But right now, you know, sitting on the sidelines in fear is not going to be a great plan to retire with dignity. And I want that for you. And you may need to look into affordable housing because of your situation and see what

the options are if we can't buy property. Well, I do fortunately have a friend that owns a duplex. And so she knows when I get old that the other house for me. So in that respect, I think I'm set. That's what friends are for. I'm not being homeless, but I do want to protect the assets that I do have and, if at all possible, have them grow. So that's kind of where I am. So you said RamseySolutions.com? Yes. I'll make sure Austin picks up,

and we'll get you connected over to one of our SmartVestor pros in your area who can walk you through all of this and make a plan for that money. Thanks so much for the call, Lori. I appreciate it. Manuel joins us up next in San Bernardino. Manuel, welcome to the show. Hey, thank you guys. Thanks for answering my call. Yeah, thanks for calling. Thank you. Yeah, I had a question. I recently changed jobs. It's closer to my house. They're paying me a little bit more. But my question is that I had a 401k and I had quite a bit of money, like about $18,000. But I have that money there, so I wanted to switch it to either a 401k if there's a way to do that. You said it's already in a 401k? Yeah, in my recent job.

Is that a traditional 401k that it was in? Yes. Not a Roth. Okay. So what you want to look into is a direct rollover. That's the key word there, direct rollover to a traditional IRA. Direct rollover? Yes.

And you can get in touch with one of our SmartVestor pros. They can walk you through that, help you do all of that. I did the same thing when I had an old 401k from a previous employer and they helped me roll that over into an IRA. And that's what you want to do because that puts you in control. You have way more investing options and it's not sitting with this old company over there. And that money can grow for you with no tax implications. That's why you want to do a direct rollover. You don't want to cash it out, put it in your bank, and then do a money move with it.

Yeah, because I was actually at an agency where I had my 401K. I could just withdraw a little. I mean, not to withdraw, but invest little by little or just the whole thing at all. But I don't know if there's like taxes deducted from there or stuff like that. I would just roll it over, do a direct roll over to that IRA. That's going to be your best bet. And if your new employer has a 401k, let's just start fresh and start investing future income into that. And if there's a Roth option, that's even better. Do you know if they have that? No, I don't know about that yet, but I know they

have a 401k, the traditional one, but I just didn't want to roll it over to them. I wanted actually, ever since I started listening to Ramsey, I wanted to open up a Roth IRA. I love it. Well, you can do that, but that's going to have tax implications. So you can open up a new Roth IRA and invest future income into that. And what we say is match beats Roth beats traditional. So if your workplace has a match in that 401k, let's start there. Then let's move to a Roth IRA. You can fund that. The max is about $6,000 this year. And then if you have money left over outside of that to get to that 15% number that we want to hit, you can go back to the 401k and invest there. Okay. Okay. So just directly just roll it over to, the thing is I don't really know,

or I understand the basics of actually how investing works out. I'm not too much of a pro. That's all right. And our smart investor pros will educate you. They'll walk you through what that process looks like. And if you invest 15% into that 401k at your age, you will be a millionaire, man. And that's the goal. It doesn't have to be complicated. You don't need to be in a Wolf of Wall Street to do this stuff. So go to RamseySolutions.com, get connected with one of our SmartVestor pros. They'll help you make a plan. They'll help you do the direct rollover. That's what they're there for. Thanks so much for the call. That puts this hour of the Ramsey Show in the books. I'm George Campbell, joined by Christina Ellis. Thank you guys so much. We'll

be back with you. Do you love a good day, Brandt? Want to see the latest Ramsey Show videos going viral? Check out your favorite moments from the Ramsey Show on YouTube. Go watch and subscribe to the Ramsey Show channel on YouTube.