The Ramsey Show - App - You Need a Set Path for Your Career (Hour 1)

Episode Date: August 17, 2018

The show about you

🎵 Live from the headquarters of Ramsey Solutions, it's the Dave Ramsey Show, where debt is dumb, cash is king, and the paid-off home mortgage has taken the place of the BMW as the status symbol of choice. Joining me this segment, our own Ramsey personality, number one best-selling author of the book Retire Inspired, and the voice of Retiring Wisely, Chris Hogan joins us. Hey, Chris. Hello, sir.

Good to be with you. Welcome, man. It's good to have you back. So it's back to school time, folk, and that means you're thinking about actually being a grown-up again after the summer, and you're actually going to concentrate on what to do. And, you know, one of the reasons, I think, Chris, that we've had so much success with the stuff we talk about here on the show and you and i have had with the books we write and so forth is we always give this real clear plan a real clear path and i like a one two three step thing you know do these three things you win do these don't do these three things you

don't win i'm a real clean cut clear cut guy and so i think that's where the baby steps came from and it's become this thing where it's almost a second language for people that listen to us all the time the baby step baby stop i'm a baby step three or i'm on baby step four or whatever and as if everyone else knows what they're talking about right that's right it's a fantastic process dave i mean as you begin to look at it and you're right people want to follow a recipe they want a plan they want clear steps that know where is this going to lead me and where is this going to take me. And the Baby Steps has done that for many, many years for millions of people.

And it's an incredible process. But, Dave, it only works if you work it. That's exactly right. It's a money-back guarantee, too. If you work it, you won't want your money back. Plus, you didn't pay anything for it. So Baby Step 1 is $1,000 saved. 2 is paying off all your debt except the house using the debt snowball with gazelle intensity.

Three is saving three to six months of expenses in a fully funded emergency fund. Four, five, six are done simultaneously. Four is 15% of your income going into retirement and good mutual funds, good Roth IRAs. Five is kids, college, and six is paying off your house early. When that's done, there's nothing left to do but go back, fully fund all your investing, and build wealth and increase your generosity to outrageous levels. What happens, Chris, and it happens to all of us, even when you get that first $10,000 in your emergency fund, it happened to me and it happens to almost everyone. I want to start investing. I want to skip over the get out of debt part and I want to start investing because we know we've seen those charts that shows that that compound interest is going to make us rich.

We really want to start. And it's a big deal to get started, but it's a big deal to do it in order. It really is. I mean, it's one of those things where you don't want to don't overthink this process. Don't try to make it overcomplicated. Follow the recipe. Follow the plan. You can't do them out of order, folks.

You just can't. You've got to begin to walk through it and look at it and see it. I know you're excited. I know you want to invest. But we've got to get that thief out of your life first so you can move forward. And here's the thing. You and the team, our team here at Ramsey Solutions, have just completed the largest study of millionaires ever done. Over 10,000 millionaires.

And one of the common themes we found among millionaires, not among your broke brother-in-law. We didn't survey your broke brother-in-law. We surveyed millionaires. Was this idea that getting out of debt was a precursor. It was a prerequisite. Remember those classes you had to take so that you could take the other classes? Yes, yes. It was the prereq to building wealth.

Well, it really is. And I'm so excited, you all. We surveyed over 10,000 millionaires to begin to find out what do they really do? What are the truths behind where they are? And Dave's right. Getting out of debt is one of those big, big keys. But I want people to understand you've got the power to do extraordinary things. If you follow the process, you have to follow a plan that actually works. And Dave, I love for

years, you've been talking about your broke brother-in-law or don't listen to this person or that person, follow someone that's done it and you've done it. And you've been showing people how to do it for many years. So I'm very excited to introduce my brand new book, Everyday Millionaires, How Ordinary People Built Extraordinary Wealth and How You Can Too. In my book, you're going to figure out the exact plan. You're going to understand the steps. And you're going to figure this out, that building wealth has nothing to do with your income level and it has nothing to do with your background.

It has to deal with the plan. You see, millionaires live on less than they make. They avoid debt. They're disciplined. They're responsible. And they invest. So whether you're on Baby Step 1 or 4 or beyond, no matter what your money looks like today, you can become a millionaire. The American dream, Dave, is not dead.

Now, I want people to know you can preorder my brand new book for only $20 and get over $50 in free bonus items. Just go to DaveRamsey.com or ChrisHogan360.com, or you can give us a call at 888-22-PEACE. Drum roll, please. We've announced it, baby. It's on sale! Some of you, we've been teasing you so much, you didn't think we were ever going to sell the book. Well, we are. It actually publishes and will come to you in January.

But if you preorder it, you get $50 in free bonus items on top of that. Now, here's the proper way to do it, though. Don't miss. This is something we've never done before with a book launch. I'm so excited about this. A brand-new, all-inclusive bundle. Now, here's the deal. It goes on sale right now for $129 and this is

on top of that you're going to get the $50 in free bonus items. You're going to get the Millionaire Kickstarter giveaway. This includes Financial Peace University. So for the price of Financial Peace University basically we're throwing in the $50 worth of items and on top of that you're getting the new book, Millionaire, Everyday Millionaire. So you don't want to miss this. Now, what the Kickstarter thing is this. We're doing a giveaway on our website.

$5,500 in cash. There's no purchase necessary. You don't have to buy anything to be registered. You can just go there and register for the $5,500. Oddly enough, that's the amount of your Roth IRA to get you kick-started and get you going. You can enter once a day for that. So go sign up for the free money. But listen, the deal of deals is get the class, get the membership to Financial Peace University, and get the book together.

It shows you how to get out of debt and then how to become an everyday millionaire. It's a one-two punch. It really is. And as you start to step back and look at this, this is the thing you've been looking for. This is what you need. As you move forward and you want to get serious with your money, I know you're working hard. I know you're doing what's necessary to take care of your family, but I want you to have a plan. I want you to work the plan that's been helping millions of families.

So here's what you can do. Enter daily for your chance to win and purchase our brand new bundle at daveramsey.com or go to chrishogan360.com or give us a call today at 888-22-PEACE now you can walk the baby steps with perfect confidence knowing that it's going to take you into that millionaire status because you've read that the millionaires did almost the exact same thing and it's going to show you that it can be done. See, so many people thought that this was just about getting out of debt, but it's really about building wealth. Oh, no, it's not even about that.

It's really about outrageous generosity. And outrageous generosity requires outrageous amounts of money. And so you need outrageous amounts of money to be outrageously generous. And so you need to be a millionaire, multimillionaire, and put you in a position to help others and do things for your family that you never dreamed you would even get to do. So you go through the whole membership, the nine lessons at Financial Peace University. You get the Everyday Millionaire book to go along with this,

which is all of the details from this study, and it's all $129. You can get the book for $20 if you want, or you can get the bundle for $129. Just check it out at DaveRamsey.com, ChrisHogan360.com. Call Customer Care, 888-22-PEACE. It's here, folks. It's the Everyday Millionaires, How Ordinary People Built Extraordinary Wealth and How You Can Too. Proud of you, Chris.

Well done. Thank you, sir. This is big-time stuff. Big launch today, baby. Well done. Thank you, sir. This is big time stuff. Big launch today, baby. It's here. It's here. Don't miss it. Okay, I need you to listen to this, because one normal routine that everyone does can cause total chaos in your life.

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We're glad you are here. Thomas is with us in Tampa, Florida. Hey, Thomas, how are you? Hi, Dave. How are you doing today? Better than I deserve, sir. How can I help? Okay, I have a couple of problems. Okay, so I'm 20 years old, and my monthly income is about $1,500.

I have about $4,000 in debt, which are mainly like medical bills and stuff like that. I have no emergency fund, and I feel like I started off on the wrong track at about the age of 18. I did some smart things like buy my car cash, and I also rent an apartment for about $400 a month. Okay. I just feel stuck. Okay. Like, I can't do the things I want. I can't live the life I want, you know?

Mm-hmm. Okay. Well, what are you doing for a living? How do I start to tackle these problems? What do you do for a living? I work at Walmart. Okay. I'm a produce associate.

Good. How many hours a week? Range from about 35 to 40. Okay. All right. Well, the first thing I'm going to observe is it is not easy to make it on $1,500 a month. Yes. Okay.

You don't have a lot of wiggle room. And so part of what your struggle is is you've got an income struggle. That's part of it mathematically. And so, you know, if I'm in your shoes, I'm going to ask myself, okay, what do I want to be doing five years from now, ten years from now, that makes me, I don't know, five or ten times that amount of money? Where are you going with your career? I wanted to go to school, but I didn't want the whole student loan problem like some of my other friends are having that I know about. So I decided that wasn't really the best path. student loan problem like some of my other friends are having that I know about.

So I decided that wasn't really the best path. So I know there's a million ways to, you know, get out here and to make money and to do these crazy things like live the life you want and things like that. I just didn't think that was the best path for me. So what are you going to do with your career in the next five or ten years? In the next five or ten years, like I said, I did want to get a second job and just try to double my income, but I didn't really have a set path. Okay, that's what you need. You need a set path. You need to say five years from today when i'm 25 i want to be i

want to be one of those and by the time i'm 30 i want to be one of those and i don't care what those is once you know what that is then you will know the steps you need to take to be one of them and is what you're doing taking you towards that? If you want to be a Walmart store manager, that's fine. That's not a bad thing to be at all, by the way. So what are the steps in Walmart to move at 20 to be the youngest store manager in history at 25? I don't know if that's true or not. I just made that up. But you'd be a young one anyway if you did it that quick.

And what have I got to do to get there? What is the process to get that kind of promotion track within that organization or if they won't do it i'm going to go to work for target and be one of their store managers or i don't want to be in this world at all i want to be doing something else i just took this job so i don't care but here's the thing dude you need to decide what your desired future is that's what we call it around here. And you say, this is where I want to be. And then that will tell you almost automatically what the steps are to get there. Or at least you can start searching out and researching what the steps are to get to be

there. I mean, for instance, we know that if you're going to be a medical doctor, you would go to four years of undergrad and then you would get accepted and go to med school. We know that. We know if you're going to be a dentist, there are steps to go to do that. I'm not suggesting either one of those things, but I am saying that anything you choose, immediately there are steps you have to take to get to be one of those,

and that's going to walk you in that direction. But just, I'm working at Walmart, and I need some extra money, I'm going to work an extra job, and I'm going to still be doing that when i'm 30 probably a bad plan yeah need a better plan than that i need to go this is what i'm going to be i want to own my business own business doing this i want to i don't care i want to dot dot dot fill in the blank and then figure out what the steps are to get there and start taking those steps then you've got a reason to work two jobs three jobs while you you know get up the money to take that course and do that thing and get that certification in technology or whatever it is you want to do but you you you know but you can't just kind of it's not going to just happen and get to

live that crazy life you want to live it doesn't work that way um you work your butt off to live that crazy life you want to live. It doesn't work that way. You work your butt off to live your dreams. It takes a lot of work to get there and some steps to get there, but you've got to identify what it is. And then as soon as you identify where you want to go, if you identify, I'm sitting in Tampa, Florida. I want to drive to New York City. Once you decide what your destination is, then you go, well, okay, we'll get the map out.

We're going to take the interstate. We're going to take the back roads. We're going to drive up the beach. You know, what are we going to do? We're going to drive up the coastline. Are we going to do this in a car? We're going to do it in a motorcycle. I mean, how are we doing?

You know, you start making your decisions, and once your destination is there, then you figure out the process to get to the destination, and that's where you need to go today. I'm going to send you a book that's going to help you with that. It's called Start, and it will help you with that. Adrian is with us. Adrian is in St. Louis. Hi, Adrian.

How are you? Doing well, Dave. Thank you very much. Good afternoon to you, and thank you for taking my call. Certainly. How can I help? Well, I was looking over our debt here. Back in January of 2017, my wife was downsized,

and we went from approximately $147,000 to $150,000 household income down to about, it was $41,000, roughly between $35,000 and $41,000 that year, this year. And just this month, she began working again. So what that's going to do for our income within the first year has put us back to about $122,000 for the household income. Wow. And some of the debts that we have right now, the house is worth $150,000. We owe $140,000.

We've got $5,000, approximately $5,000, maybe a little bit less, owed on just one car. I've got 5,000, approximately 5,000, maybe a little bit less, owed on just one car. I've got student loan debt. We've got three student loans totaling about $84,000, 35 of which has been, one has been defaulted on, and credit cards at approximately about $14,000, which gives me a total debt somewhere about $393,000. About half of which is your house. Correct.

And what I was wondering was that I've heard you mention like, you know, poor house before and that's, you know, sometimes it's recommended that to eliminate some of the debt that what people will do is they will let go of an asset such as the house. And I was wondering should that be a first step?

And right now I'm doing some coursework also to change the type of work that I do. I'm doing some appraisal coursework. I'm only in my second class, so I'm looking to get into real estate as well. Good for you. Okay, that's cool. Well, I don't think in this situation you would need to necessarily sell your house unless you just don't like it anyway.

What I would do instead is sell your lifestyle. You guys spend money. You spend a lot of money. What I did totally, totally just foolish with was that student loan, and I overborrowed for a bachelor's degree. Everything. Yeah. Cars, credit cards. You make you make 120 000 a year you've reduced

no debt and you've spent it all and more before before she got laid off that's what was going on and so what you guys have got to do is drop an atom bomb on your lifestyle beans and rice rice and beans scorched earth man you don't see the inside of a restaurant unless you're working there and we're not talking about vacations you're broke people you don't need to go on vacation do you get to you're not broke people anymore you make too much money to be this broke and stressed out and you're going to have to really lay into this to tear it up and get rid of it that's what i would propose jump on every dollar.com download that budgeting app and i'm going to send you a copy of the book, The Total Money Makeover, and it's going to show you step by step by step what to do.

I want you to save $1,000 first, and then I want you to list your debts smallest to largest, everything but the house, and I want you to attack those debts like your hair was on fire. Like if you don't get them paid off, your mother-in-law is going to move in with you. I mean, you've got to get after it. You've got to get mad. I'm sick and tired of living like this. If you can't do that, man,

you can't sell enough assets to get out of that. Because it's all going to grow back. Because you're spending like you're in Congress around that, man. You make a lot of money. You've got nothing. Too much money to do that broke. This is the Dave time to buy life insurance? My answer is typically now. Life insurance is not part of the baby steps because it's needed when your family has debt and not enough savings to provide for their financial needs. That's when they're at the highest risk.

And no matter where you are in your baby steps, it's a necessity, not a choice. This includes working husbands and wives, as well as stay-at-home parents. It's pretty expensive to replace those stay-at-home parent responsibilities. I only recommend term life insurance, since it's the most affordable way to get the right amount of coverage and not break your budget. Go to Zander.com or call 800-356-4282. These are the guys I personally use. Term Life Insurance is inexpensive and your family needs this no matter where you are in your baby steps. That's Zander.com.

Or call 800-356-4282. Zander.com. Thanks for joining us, America. Isaac is with us in Hobbs, New Mexico. Hey, Isaac, how are you? I'm good, and you? Better than I deserve. Welcome to the Dave Ramsey Show.

How can I help? Well, I got this new job, and it came with a pretty good raise in income. But then they offered me this vehicle purchase program that pretty much raised my income from $75,000 to $113,000. But now I'm wondering if it was the best idea, because I did pretty much a stupid thing, and I purchased a Denali for $55,000. And it's kind of a big payment. But the reason I think it was a good move, I guess, is because I am making a profit off of it after insurance, truck payment, and diesel expense. I'm still making about $600 profit off of that vehicle. So I kind of don't see it as an expense,

but it's still something I have to pay for at the end of the month. Okay, so you're not working for a manufacturer, a car manufacturer, are you? No, no. I do outside sales for an oil field company. Okay. No, no, I do outside sales for an oil field company. Okay, so they offered you a car allowance for you to go get a car. Yes, sir. And the car allowance is how much? Okay, so the car allowance itself is about $11,500 a year, but they also pay me $0.35 a mile that I drive.

They would have paid you that anyway. Yeah. Whether you had a car or not. A gas card or something. Yeah, why don't they give you a car? Would they not give you? Why did they? You didn't have to buy a car to get the car allowance, did you? I did because at the time I had a Corvette, so that did not fit the requirement,

so I traded in the Corvette and got the truck. Yeah, but what is the requirement for the card in order to get the car allowance? It had to be a four-year or newer truck, four doors, and four-wheel drive. Okay. All right. And you don't have the money for any of that? Well, I mean, I could afford it. No, you didn't have the money to write a check and buy that car?

Oh, no, absolutely not. And you didn't have the money to buy a four-year-old four-door either, did you? Absolutely not. No. You don't have any money? No. Yeah. No,old four-door either, did you? Absolutely not. No. You don't have any money. Yeah. No, sir. And so you're how old?

I am 25. And you went $55,000 in debt for an SUV. You have lost your butt. You've lost your butt. Because by the time you put miles on this thing, this thing is going to go down in value so freaking fast that you're going to lose tens of thousands of dollars on this deal. Bad deal.

If you were asking, that's what I'm going to tell you. Yeah, and see, this was before I started listening to your show, so this was about two months before. Yeah. And I rationalized it by going, well, I'm going to be making about $600 profit. You're not making a profit. Let me help you with the math. $55,000 car is going to turn into a $25,000 car.

That $30,000 is not going to be offset by $600 a month spread. Because as you put miles on it, this thing is going to drop to $30,000 in about an eye blink. Okay? Oh, yeah. And so you've lost $30,000, and $600 a month does not offset $30,000 in loss over the next two years on this vehicle. So if you have the ability to get out of this mess, I would. If your company will let you stop

doing it upon the sale of the denali and i would sell the denali and i would buy the cheapest possible vehicle that you can get to work in even though it doesn't qualify for the car allowance and then i would work myself up to paying cash for the cheapest possible car that does qualify for the car allowance and if you pay cash for the cheapest possible car and then you put twelve fourteen thousand dollars in your pocket offset you might be coming out on that one because it's a car you probably would have been driving anyway but if you're if you're making seventy thousand dollars a year and you're driving a fifty five thousand dollar denali you're 25 years old dude this is under the stupid column it really is i mean you really that this is a mess and so you're you thought that for you called i'm just here to confirm it and let me help you with this i have done dumber so i ain't picking on you okay um but

you already knew it was dumb and i'm just going to help you confirm that so what would i do i would undo it to minimize the damage because you're going to lose 30 000 bucks that you can't afford to lose in this transaction and i it's just a bad idea so and here's the other problem if they lay you off because the oil and gas business is volatile oh shocking did anybody know that yeah let's just pretend you got laid off guess what general motors doesn't care they want their freaking 800 bucks a month or whatever the payment is on a 5555,000 denali. That's independent of your employment. And so you lose the car allowance when you get laid off. You know that, right?

And then you are stuck. And talk about up a creek. You'll be up a big creek then. So, yeah, you need to get rid of this mess, dude. I hope you can get out of it. I sure hope you can. Open phones at 888-825-5225. If you're new to this show, let me give you some clarification, okay?

We do not pick on our callers here for the entertainment value of you, the listener. You're just mean, Dave. No, I am absolutely the kindest guy you will ever meet because i will tell you the truth i'm not going to participate in your insanity that's going to bring you harm i won't be a truth teller in your life because i care about you i want you to win but this you know dancing around and acting like everything's okay and well i don't know if i agree with you i don't give a crap if you agree with it. You're what's known as wrong. You know? So there's a way to do stuff that works and a way to do the stuff that doesn't work.

And I'm just going to tell you what we're going to do. And it's not, but I'm not picking on you to hurt your feelings. I'm just going to be very, very unbelievably clear so you know what's going on. Sarah is with us. Sarah's in Toledo, Ohio. Hi, Sarah. How are you? Good, Dave.

How about yourself? Better than I deserve. How can I help? All right. My husband and I have just a minor disagreement, and we thought we will go to the horse himself. Be careful which end you get, right? He is self-employed, and he currently has a very well-paying job. Okay.

So right now we're going to make about 40,000 this year, where typically we make about 27. Wow. Okay. We have three debts, our mortgage, a student loan, and our equity loan. Um, we almost lost the house, and so it was turned over to an agency who has approached us in the past to take $30,000 and call it even. If we have the opportunity like that again... What's the actual balance? The actual balance is $66,000. Whoa, if you can settle $66,000 for $30,000, you'd do that immediately.

Okay, cool. Go borrow the money to do it. Okay. I just want to make sure, because I'm following your plan, trying to tell him, no, mortgage is last. Everything else is first. Well, mortgage is last, but if you can turn $66,000 into $30,000, you go put that on a credit card.

But we're not going to do a credit card. I know, but I'm just saying you already have sixty six thousand dollars in debt if we can turn it into thirty thousand dollars worth of stupid debt that's fine still you pay it off three times faster right okay cool yeah you just made me smile so much thank you get rid get rid of that if they come along and do that now if they don't come along and do that then we'll wait till they do. When you get down to your mortgage, if the offer hasn't popped back up, ask them for the offer again. Okay. He did approach them before, but we didn't have the amount they were asking for.

So, yeah, they turned us down. If you can scratch together the capital, whether you just run down the credit union, get you a little personal loan, right? Okay. You already have the debt. I'm not telling you to go borrow money. You already got debt. Right, right. All we're doing is reducing your debt by changing where it's still, you already have the debt. I'm not telling you to go borrow money. You already got debt. Right, right. All we're doing is reducing your debt by changing where it's owed.

Yeah. That's all we're doing. So it's not, you know, we're not increasing your debt. That's our deal. So, hey, thanks for the call. Good, good job. Stay on it. Stay on it.

Good stuff. You got this. This is the Dave Ramsey Show. Thank you for joining us, America. Adam is with us in St. Louis. Welcome to the Dave Ramsey Show, Adam. Hi, thank you for taking my us, America. Adam is with us in St. Louis. Welcome to the Dave Ramsey Show, Adam. Hi, thank you for taking my call, Dave. It's a pleasure to talk to you. You too.

What's up? Through my employer, my wife and I are both on Baby Step 7, and we're in our 30s. And through my employer, I have an unmatched deferred compensation account. Last week, I opened up an Edward Jones account. It's not an IRH. It's something that I can eventually draw an income off of. And in my deferred compensation account, we had a good lineup of funds. I did fairly well at it. But this past April, the fund lineup for stocks was reduced down to just two index funds. I contribute $800 a month to that, and to my Edward Jones account, I contribute $400 a month. My question is, is that given my

limited choices, should I move part or all of my contributions into my deferred comp account and move them over to not the balance itself, but just the contributions, over to my Edward Jones account. How old are you? 35. You told me that. Okay. So you can access the deferred comp at what, 55? Is that right?

I think it's one month after I retire. If I remember right, it's through T. Rowe Price, and again, it's through my employer. Yeah, that wouldn't be true if you retired at 40. No, I can't retire at 40. The minimum I can retire is 51. We both work for the state. It might be that. Some of them are shit.

Okay. You're 33. 35. 35, okay. And how much is going – you're maxing out 401ks and roth IRAs other than this right we don't have a 401k that's offered to us it's the deferred compensation account we do both contribute i contribute eight and a half percent of my gross income and my wife contributes eight percent of her income to the state employees retirement system do you have control over what

that's invested in no that we don we don't. That's mandatory. It is voluntary? No, it's involuntary. Involuntary. Okay, yeah. So that's a straight pension plan. Okay. Right.

I'm probably going to leave it like you are. Does she have anything at 401K? She's a state employee as well. That's right. We're both state employees. She does not contribute to her deferred compensation account. Altogether, we contribute. Minus the involuntary pension contributions out of our own pocket,

it's about $1,200 a month is what we're paying into them. The first thing I would do in addition to the involuntaries is two Roth IRAs and good growth stock mutual funds. That's $5,500 a year each, $ a year each 11 000 total you got to start there that's maxing everything out then comes the question of do we do uh you know i i if you've only got index funds available i'm probably just going to load index funds in an after-tax market. Here's the thing, okay? The index funds are going to grow. The growth is going to be tax-deferred, okay?

The only benefit to doing the deferred comp is it is pre-tax on the amount you're contributing. So every $1,000 you put in there, and by the time you get it home, it will be $650. And so you've got $650 going into an after-tax. Edward Jones, if you're doing an ETF or an index fund, or if you pick some mutual funds there with low turnover ratio, either way, that's going to grow without taxes much as long as it's low turnover until you cash it out, and then it'll be taxed at capital gains rate. The other one is more money going in, but it's going to be taxed at ordinary income when it all comes out.

I'm probably going to go about 50-50. Okay. Because also I'm thinking about you're going to need some money if you want to leave the state before uh retirement age and you've got no access to anything here and you're you're you're already on baby step 7 at 35 years old which means your house is paid for everything's paid for your emergency funds in place you're killing it way to go very well done you're a rock star but it's a complicated question you could do a there's three or four variables pulling at it one is the taxation going in one is the taxation coming out uh taxation coming out of an after tax with low turnover is at 15 percent uh meaning capital long-term capital gains rate the other one's going to be taxed at

your income because deferred comp is just simply deferring, putting off compensation. So it's completely taxed at ordinary income, plus all the growth is taxed at ordinary income when it comes out. So you're either investing with after-tax dollars with your growth at long-term capital gains rate, or you're doing before-tax dollars, which gives you more money in, but when you take it out, the whole thing is taxed at ordinary income over twice as

much maybe three times as much in terms of taxation half yeah so and the other third variable pulling out is you're going to want some money before 59 and a half or 51 and a half or 55 and a half or however this particular deferred comp is designed so um based on all of that i'm probably going to just mix it up and here's the other thing monitor it, and if you start looking like you're liking the after tax, your Edward Jones-type account, or if it was us, it would be the SmartVestor Pros that we send people to. If you're liking the after tax account there, the way it's growing, the way it's behaving more than you're liking the deferred comp in five years,

then you may just move it all over there from that point. It's not like you have to keep that mix forever. But for the next five years, I'd probably do 50-50. Okay. One other thing before I let you go. You had a phone call from a gentleman in San Antonio, Texas. He was a plumber named David, and he managed to save, since 1968, $1.8 million. I listen to that phone call every morning before I go to work. That's what keeps me motivated.

Way to go, David. I just want to say thank you. Millionaire theme hour. I love it. Very cool. That's a good one. Thanks, Adam. That's the best stories in the world are the real stories that happen here every day on the air, and you're one of them, man. You're baby step seven. You're killing it. Joshua's with us in Fort Worth, Texas. Hey, Joshua, how are you? I'm doing great. How are you?

Better than I deserve. What's up? So I'm recently married. I unfortunately played the debt game and lost real hard when I was 18. And so now kind of coming into this marriage with my wife, she has a little bit of debt between student loans and the car, and I have a car that has some student loans. And so I really want to get focused and gazelle intense.

And I just don't know the best way to talk to my wife about this. I do sales for a living, and I know sometimes we just kind of have to wait for the perfect opportunity and have the right thing, you know, to say. So I was just wondering if you could offer me some fresh perspective as far as how to come about this with my wife. Sure. How much debt do the two of you have total, not counting your house? So not counting our house, we have $40,000 in student loans

and then about $10,000 in consumer debt. What about the cars? Credit cards and such. On the cars, I owe $10,000 on mine, and she owes $9,000 on hers. So another $19,000. So $70,000. And what's your household income? Somewhere between $110,000 and $120,000.

Excellent income. Okay. How long have you guys been married? We've been married for about six months. And how old are you? 24. And she is? She's 24 as well. Okay. How long have you guys been married? We've been married for about six months. And how old are you? 24. And she is? She's 24 as well.

Okay. Cool. All right. Well, my son is 25. He's my youngest. Okay. And were he to sit down with his new wife, were he to have a new wife at that point, six months in, and ask me this exact question, here's exactly what I would tell him.

The first thing is, is you're a salesman and she knows that so she doesn't want to be sold yeah yeah i just read your mail dude okay and uh so just sit down with her and tell her the truth and the truth is baby i've been studying this stuff we got seventy thousand dollars in debt i'm worried about it and i have read that the number one cause of fights in marriage and the number one cause of divorce and marriage marriage is coming to an end is money fights and money problems and i would never want that to happen to us so i think it's very important that we get on the same page you and me and we make a lot of money for 24 years old. Your household income is incredible.

You guys are killing it, Joshua. We make a lot of money, honey, and it's kind of sad that we have this much debt. And I think if we were out of debt, we could enjoy our life more, we could save more, and we could give more. And I'd like to work towards that. And I want to know what your thoughts are. And just ask her to make a few statements like that. Ask a few questions.

Don't sell her. And don't wait for the perfect time. Just sit down and talk about it. This is one of the most important things you're going to deal with in your marriage. Not because money's important, but because it's attached to everything that is important. And walk your way through it. So hold on, I'm going to give you a copy of the book, The Total Money Makeover.

The two of you read through that together, and you'll have a proven step-by-step plan to getting the debt cleaned up, but more importantly, being on the same page in your marriage. This is The Dave Ramsey Show. Hey guys, this is Blake Thompson, Chief Production Officer for The Dave Ramsey Show. Here's a tip. To keep from missing Dave's classic facial expressions to some of those calls, make sure you watch him live. Just visit DaveRamsey.com slash show each day from 2 to 5 p.m. Eastern. Enjoy.