The Ramsey Show - App - You Need to Have Goals, Not Resolutions! (Hour 3)

Episode Date: January 27, 2020

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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. I'm Dave Ramsey, your host. Thank you for joining us, America. It's a free call at 888-825-5225. That's 888-825-5225. All right, Brian is in Michigan. Hey, Brian, how are you?

Good, sir. Thanks for taking my call. Sure, what's up? I have a retirement question for you. My wife and I are in baby step two. We've been very ish. You'd probably kick my butt if you knew just how ish we were, but we have a baby on the way in May and we are piling up some money and ready to get started once everyone comes home safe. Good. So my retirement question, through work, I have a 401k, Roth 401k, a 457 that are offered

to me and my wife has a pension plus and a 457 offered to her. She has no match option. I have an automatic into my traditional 401 and a 5% match to either traditional Roth or 457. I'm wondering when we get to Baby Step 4, how you would suggest funding those? Match is best up to the match. Roth is next best. And so a matching Roth is the best.

And then after Roth is traditional. So what I would do is take the match first. You've got a match at your place. She doesn't. And above that, I'd be putting yours into a Roth. Sounds like you've got a Roth 401k available with a match, right? Yes. Okay, so I'm going to put a ton there.

And she doesn't have Roth anything available, right? Correct. So I'm going to use your Roth 401K and two individual Roths after the match. If that does not get me to 15% of your household income, then I would do traditional in 401Ks or 403Bs where you can pick good mutual funds that mirror the other funds you're buying and the other stuff. And we always suggest spreading your mutual fund investments across four types,

growth, growth in income, aggressive growth, and international, and all with track records that outperform the S&P or don't buy them, and those are available. And that's what you're looking for, and you invest in that. And if you do that for your working lifetime, you will retire probably a multimillionaire, but at least a millionaire at that stage of the game. Kate is with us. Kate is in Illinois. Hi, Kate. Welcome to the Dave Ramsey Show. Hey, Dave. Happy Monday. Thanks so much

for taking my call. My pleasure. How can I help? So I'm 22 years old. I just graduated and got my first full-time job. I'm getting married this summer, so my fiance and I are currently in Financial Peace University. We're also paying for a wedding, but we're in baby step two and are trying to figure out our long-term goals. I'm currently our primary source of income, but it's always been my dream to be able to stay home with kids. So my question is, what do I need to do now if I want to be able to be a stay-at-home mom in like five or so years. He has to make enough money to run your house. Yeah. I mean, you're the primary source of income,

but that's probably not always going to be the case, right? Yeah. So right now I'm bringing in about $100,000 compared to his, like, two part-time jobs bringing in about $40,000. So it's a pretty big differential. So is he in school? So he is currently doing his firefighter certification to be a firefighter paramedic. So he can currently work part-time.

But hopefully after he has that certification, he should be able to get on to a good full-time department and be able to make a bit more. Okay. Yeah, he ought to make a lot more than what he's making now. Plus most firefighters only work three days a week right yeah yeah a lot of them have very successful businesses uh in their off days like i know a guy i know a guy that makes 120 a year painting houses and running a painting crew in his off days, and he's a fireman on the other three days a week.

So more jobs. Well, no, I mean, no, listen. Listen, if you work three days a week, I understand firefighting is strenuous and stressful. Yep. If you work three days a week, you need to do something the other time. That's not just more jobs. That's just reasonable use. What's he going to do, sit on his butt four days a week? That's not just more jobs. That's just reasonable use.

What's he going to do, sit on his butt four days a week? That's not a good plan. No. Okay. Yeah, and that's kind of the debate, too, is could he stay home with the kids. But, you know, when it's my dream to be able to just trying to figure out how we could financially do that. What do you do for a living?

I'm an engineer. Okay. Good for you. Good for you. Well, obviously, you know know what we've got the answer to your question is is uh clarifying and working towards a positive outcome on his career so that your family can prosper with you staying at home sure thing the second piece of that is as an engineer uh there's probably a lot of stuff as your children, as you start having kids,

and then as they get out of the baby stage. And the older they get, the more you can have a little bit of free time to work. And you can start a side hustle from home and just do some freelance engineering. And you could probably make some pretty good money doing that and still live your dream, you know, and supplement. But I really think the biggest part of the equation is we need to have more discussions about what his career aspirations are. Because it certainly doesn't end with his two part-time jobs, and then it doesn't end with him just being a fireman three days a week.

Because that's how most of them work. And a lot of guys run painting operations. Oh, they run all kinds of side businesses out of the firehouse and do really, really well at it. And I'm glad they do. I mean, again, firemen, hats off, admiration, lots of stress, lots of high-risk situations. But there's also a lot of downtime.

And you need to use that downtime to the benefit of your family, not be sitting around and, you know, playing gin rummy or something. So that's the deal. And the guys that do that make some serious bank for their family and have some legitimate side businesses that have come up. Well, we have a few cabins have opened for the Ramsey Live Like No One Else cruise. If you're on Baby Steps 4 through 7, this thing is jam-packed. It is an incredible brand-new ship.

It is seven days at sea, Holland America, one of the top lines, our very first Live Like No One Else cruise. It comes up this March the 20th, 20 minutes from now. We're in the last few days of this, and we had a couple people drop out, so we've got like 42 cabins open. Go to RamseyCruise.com. We are opening up those last-minute specials like cruise lines always do. We were sold out, but we had some people drop out,

so we want to fill up every little cabin, every single item, every person that can come, wants to come. So we're knocking off $250, or we're giving you $250 of onboard credit per person. So if there's like two of you in the room, that's $500 of shipboard credit to use. And that came out today because we're in the last run down to the end here. So RamseyCruise.com, a couple of you in a cabin, $500, $250 ahead, on-board credit to spend on the ship, and you can still come see Stephen Curtis Chapman, Jeff Foxworthy, Dave Ramsey, Chris Hogan, Christy Wright, Rachel Cruz, Anthony O'Neill, Ken Coleman,

they're all going to be there. All the Ramsey personalities are going to be with us. This is the Dave Ramsey Show. Okay, I need you to listen to this. When you're on Wi-Fi anywhere in public or at home, you're at risk of hackers easily seeing every site you visit and search that you're doing online. It doesn't matter if you're on your cell or laptop. Public Wi-Fi is a hacker's paradise. They can see you visiting websites, streaming, downloading, or uploading photos, uploading files, and more. I'm not telling you this to scare you. I don't operate in fear, but I want you to be aware and take action. You need to download an app called CyberGhost VPN on any device you access the internet with. CyberGhost VPN helps you keep your connection on your own Wi-Fi and any public

Wi-Fi secure and private. Over 34 million people worldwide have downloaded CyberGhost VPN. Download it now. Just search CyberGhost on iTunes or Google Play or go to CyberGhost.com. Well, January is almost over. You know, the average New Year's resolution lasts until Valentine's Day. The juice cleanse lasts two days, and then you hit the gym for a total of five times. It's over. Resolutions don't work. What you need are goals, not resolutions. You need a plan.

When I talk to people who change their lives, they always say, I had a reason for doing it. I had a big why. My friend Simon Sinek wrote the famous book, Start With Why. You have to have a reason. Otherwise, you won't suffer. You won't sacrifice. You have to have a reason. And when you have a reason, you've got a vision for your life.

It changes the energy and the commitment that you have for quote-unquote resolutions, and they become goals. Goals that work, we teach it all the time, must be five things. They must be measurable and specific. I want to lose weight. It's measurable, but it's not specific. How much weight do you want to lose? 30 pounds.

Okay, now we're on to something. I want to get out of debt. Good, that's measurable, but it's not specific. How much debt do you want to pay off? The third thing is, is it your goal? Is it a time limit? A time limit. And so you need to have only 30 pounds. When? Over 30 years? How many times do you want to lose 30 pounds? So you have something that's measurable, it's specific, and it has a time limit. And then it's relevant. And relevant?

Now, they're measurable, they're specific, it has a time limit. They have to be your goals, and you have to write them down. That's what they have to be, those five things. This is what we've always taught. And then there's seven areas of your life you need a goal for. It's financial, intellectual, family, spiritual goals, physical goals, career goals, and social goals. It's not too late to reach your money goals for 2020. The best way to take control of your money is Financial Peace University. The average family pays off $5,300

in debt and saves $2,700 in just the first 90 days. That's an $8,000 turnaround, but you have to have a reason for doing this. I want to be out of debt. It's really not a good enough reason. I am really sick and tired of being sick and tired. Now that'll work. I want to be out of debt, it's really not a good enough reason. I am really sick and tired of being sick and tired. Now, that'll work. I want to change my family tree. I don't want my kids to ever experience this. I want to retire with dignity because I'm scared that the current retirement system and the current things happening in Washington are not going to benefit me.

I need a plan for me. Those are good whys. You need a why. I want to be outrageously generous, and I can't do that when I'm broke. That's a great why. It gives you fuel for your tank on being able to do this. And then you get plugged into Financial Peace University. Go to DaveRamsey.com slash FPU. And if you're still not ready for Financial Peace University, we created a three and easy three-minute assessment to help you get started. Now your goals need to be specific and you'll get a free customized plan after you take this three-minute assessment that will show you exactly what you need to do to start turning things around.

Here's how you do it. It's easy. It's a free assessment. It takes three minutes to do, and it'll lay out a customized plan for you. DaveRamsey.com slash start. Dave, I don't know where to start. You do now. DaveRamsey.com slash start.

And if you're already ready to go, just click FPU at DaveRamsey.com. Get signed up for Financial Peace University. Find a class near you, and we'll work on it from there. Good stuff. All right, Margaret is with us in Colorado. Hey, Margaret, how are you? I'm great, Dave. Thanks for taking my call.

Sure, what's up? I'm 54 years old. My husband's 58. We still have a 13-year-old child at home. My husband's going to be discharged from a Chapter 7 bankruptcy when we make the settlement payment next month. He's still recovering emotionally from this reveal. And then after that, he has an IRS issue to deal with because he didn't pay payroll taxes to keep his business going the settlement and keeping the business

going has dissolved all of our retirement and on top of that I needed to take out a 30,000 personal loan to make the pay settlement pay off what do you keep talking about settlement in a chapter seven? We're an adversary. They pulled them into an adversary complaint. I was pulled into the adversary also because our trust attorney made a scrivener's error. So it looked like my husband transferred assets to me that actually are mine. So the damages for that are over $150,000 that will probably end up settling or his insurance company will probably end up settling with us. Fortunately, in 2015, I inherited an S corp, which I started growing in 2017. I have a household income of $160,000.

I started your Entrez Leadership Program last week, by the way. I own a home just by myself. It's worth $690,000. The first mortgage is $439,000. The second mortgage is $72,000. How long have you two been married? 15 years. Okay. And so when the settlement clears, and he's clear of the Chapter 13, he's broke at that point. He's used up everything that was his assets. You've still got all these other assets. Huh? Yeah. No, we're not all broke. You've got substantial assets.

Yeah. So my question is, so I owe $439 on the first mortgage and $72 on a HELOC. We're in Baby Step 2, and I'm wondering if I should sell this house so we can start Baby Step 3 and 4 earlier. You make $160? Yes. What do you do i own a business no doing what um we do uh commercial facility services for commercial sites what's he going to be doing after he recovers from this that's a good good question. So his business is gone. Yeah, gone. Hopefully we'll get to

a place where he can help me grow this, but it's not there yet. Yeah. He's not there yet. Well, I mean, he's been through the ringer. Yeah, yeah. It's not only go through losing everything,

but he had an adversarial miss in the middle of it, which is even worse, emotionally draining. And it just destroys your self-esteem. Yeah, you know, and like I listen to you talk, and you say when you went through that 30 years ago, and you're like, you and Sharon, I wanted to kill each other. That's kind of how it is sometimes now too. I would make sure that the two, let's just, I would make sure the two of you plugged into a good church and that I've got some people that give me a longer perspective, an eternal perspective in my life. Because this stuff right in front of your nose can bury you.

You're not as bad off as you feel like you are. Okay, well that's good because I feel terrible. If you took away his whole part of the story and you just called me up and you said, I'm 54, I have a 13-year-old, and I have a house with $439,000 plus a HELOC, and I make $160,000 a year, am I okay? I would say, yeah, you're okay. You make $160,000 a year. You've got a nice shovel. Shovel your way on out of the rest of that debt, and meanwhile, be building up your retirement.

Didn't you tell me you had a nest egg, too, in addition to this? shovel, shovel your way on out of the rest of that debt, and meanwhile be building up your retirement. Okay. Didn't you tell me you had a nest egg too in addition to this? I had to dissolve it to get him so he can get discharged. Okay. All right. So you don't have any 401K or anything left? We have nothing except for the equity in this house. Except for equity and a fabulous income.

If you guys can get emotionally turned around and out from under the PTSD of this, which is just destroying you, and that just makes you human, you're not bad people. I mean, you make enough income for the math to all work here once you believe it's going to again. But that's the issue. It's the hope factor. And remember this, nobody can take your hope. You have to surrender it. This is the Dave Ramsey Show. Are high health care costs getting you down? Are you confused trying to navigate your options? Do you wish you could find an affordable, biblical solution to your health care costs?

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Christian Healthcare Ministries is a proud sponsor of Dave Ramsey Live Events. chministries.org Akili is next on the Dave Ramsey Show from California. Hi, Akili. How are you? I'm doing well, sir. And yourself? Better than I deserve. What's up?

I just wanted to get your advice on something real quick. Basically, just to give you a little back story, I'm 22 years old. I work part-time at a retail store. I 16 bucks an hour 24 on sundays um i am one class away from transferring to a university and i uh still live at home with my parents but um our financial situation not the greatest right now we're unfortunately like one house payment away from possibly losing our house and um i'm desperately in need of a car and and it's just kind of a mess right now wait a minute is this your home or your parents home uh this is my parents home oh so it's not your responsibility okay yes um i've just been very you know burned out on my job and just everything you know everything i've been going through right now, it's just, um,

I feel like every day I wake up, my brain's autopilot. I just feel like I have no purpose. And for the longest time, I've been wanting to go on this mission trip. Um, it's a called YWAM youth with a mission. It's kind of a global, you know, missionary, um, Christian, uh, missionary thing. Yeah. I'm very familiar with, um, I've been, um, trying to, uh, you know, I, I'm going to have the money to go, but it's basically all that I have. And, um, I, I had a very, a couple of days ago, I had a very, uh, vivid dream, you know,

just a real dream that I was there and, you know, I felt like I was supposed to be there, but you know, if I, if I pay for this thing, it's literally going to be all that I have. And I'm not sure if, you know, every time I think about not going, I feel this just great weighted anxiety on me that, you know, if I don't go, I'm going to be stuck here forever.

And, you know, I just really need to find my purpose. And so my question basically is, do you think that I should, you know, spend all that I have to go on this trip and trust God and see what happens? Or do you think I should just not go? This is the only time I'm ever going to really have the opportunity because that, you know, that gap between transferring to university, you know, will give me some free time. And so I just wanted to, you know, get your thoughts on that. Yeah.

I would probably go ywam is um a very diverse organization and what that means is is there's uh the um the dts's are all disconnected uh and so there there's a vast array of experiences that you could have in YWAM. So all YWAM is not the same. So I can't say, but by and large, I've known a bunch of people that have been involved with YWAM for 40 years and have had, by and large, good experiences. And it's a godly endeavor, and I think it's not a bad thing for you to do at all. I do think you're making some statements that are ridiculous. Okay.

You know, I'm never going to get to serve God, and if I don't go do this, I've missed God. That's just crazy, okay? This is just a moment in time. You've got the money. It's a transitionary time in your life. You're young. You're free. You're going to trust God with faith to help you work things out when you get back.

But you're burned out at a $16 an hour job, so get a different one. I mean, you don't want to go on the mission field to escape your job. That's not good. Right. Okay? You're supposed to go on the mission field to serve, not to be served. This is not rehab. It's mission work.

And so it's not for your benefit. So it's not to help you with your burnout. It's not to help you with, you know, you're stressed out. It's not to help you with any of that. You don't go on the mission field to escape a bad life. That's a bad idea. It's not spiritually healthy either. And you're dramatizing this as if there's no other way you're ever going to get to do anything

in the service of the Lord the rest of your life. I never went to YWAM, and I've served God a whole bunch of different ways. And at different times, he's told me clearly what to do, and other times it was last night's pizza and i just thought it was god you know so you're going to have all of that so don't this is not so fatalistic that if you miss it one time at 22 years old that you're somehow unplugged from the holy spirit for the rest of your life so don't go because you're needy that's not good for the people you're going to serve, nor should missions be

an escape mechanism. So don't go because you're burnt out, you're needy. Don't go because you feel trapped. None of that's good, okay? And don't over-dramatize this as if you're stuck forever in this job because you didn't go to YWAM and God told you to. You think he's not going to forgive you for not going if you don't go? You'll get another job. You'll change your life. You move. Do something else, you know.

So let's not put so much drama on our spirituality, and it'll help you in your walk with this whole thing. But all of that said, I love your heart, and, you know, you're a good man, and you're thinking this, and you're a good man, and you're thinking this, and you're seeking to hear God's voice, and I want you to do that. I think you ought to go on the trip. But when you come home, dude, you need to grab this thing called life by the horns and get control of it because right now it's whipping your butt.

Right. So when you come home, you come home with big broad square shoulders in the spiritual realm and strengthened and ready to get back after it and i'm not a victim i'm not stuck in this bad job i'm not stuck in this situation because my family can't control money you're not stuck god's a big god and you can do all things through Christ who strengthens you, right? Yes, sir. So when you come, you know, I want this to be like spiritual boot camp for you while you're gone.

I want you to come home Superman. Yes, sir. Get away from the kryptonite. Okay? So I think you ought to go. But just, you know, just always remember, don't run to the mission field as an escape mechanism. Too many times people that are believers do that. And it makes really bad missionaries and really bad Christians.

So go in with strength. But I think you can do that, and I think God can give you that strength. So part of your discussion I really loved. Part of it I didn't, and I've addressed it. So all of that said, if I was your dad and you were asking me, I would tell you to go. And when you get home, you'll be broke, and you'll be ready to start life fresh. And that's cool, and you can make it. And God will work.

He'll work. You'll see some wonderful faith things happen. They always do around the YWAM process. It's part of the way YWAM works is you're right on the edge of everything, and so God just has to show up, and you get to see him work with his hands on. So all of that. Hey, you're a good man. You do a good job out there for the Lord,

and you come back and live this next chapter of your life in strength and in abundance right now. I love it. Good to talk to you, sir. Open phones at 888-825-5225. Daniel's in New York. Hey, Daniel, welcome to The Dave Ramsey Show. Hi, Dave. Good afternoon.

Thanks for taking the call. Sure. What's up? First thing, I just wanted to say that I actually called late last year, and after my conversation with you, I wrote a check and cleared off about $25,000 in student loan debt. Wow. So 30 minutes after our last call, I was debt-free. Cool.

So thank you for that. I had a question for you. I currently work in a bank, and obviously the culture here is that, you know, everyone's got a credit card, and there are so many benefits to using them. And, you know, I'm still early off in my career, and I'm trying to, you know, develop good habits early on that will help me manage my money effectively, you know, and allow myself to save as much of it as i can as i you know work throughout my career and growing my income so i want to get your take on um on why you believe that debit cards are a more effective

um are more effective than say using a credit card for day-to-day transactions if I pay it off on time every month. If you pay it off on time every month, there's no difference. A debit card's using the money in your account, or you're using the money in your account at the end of the month. There's no difference. The reason debit cards are more effective is you don't accidentally end up in debt. People accidentally, in quotes, end up in debt. It's kind of like an unexpected pregnancy. Say what? Yeah, that's what's going to happen. You carry this thing around in your pocket.

Not a pregnancy, but you're going to end up in debt. This is the Dave Ramsey Show. one of my favorite parts of this show is hearing your debt-free screams. You guys are our heroes. You've kicked debt to the curb and you've saved for the future. Now we want to celebrate with you. If you have lived like no one else and are currently in baby steps four through seven, well, it's time to enjoy some money. And the perfect place to do that is on board our first ever live like no one else cruise in March. That's right, just a couple of months away. But get this, it's not too late to book your cabin, so don't miss your chance. This Caribbean cruise is going to be an incredible seven days at sea on a stunning new ship with amazing experiences.

I'm talking all of our Ramsey personalities and other world-class entertainers. We're stopping in the Bahamas, Puerto Rico, St. Thomas, and Turks and Caicos. It's going to be an amazing, debt-free celebration designed just for you. Don't miss the boat. Head over to RamseyCruise.com today to reserve your room. Our scripture of the day, Matthew 5.16, In the same way, let your light shine before others, so that we may see your good works and give glory to your Father who is in heaven. Kelly did this to me today.

Our James did one. Kobe Bryant's passing, our quote of the day from Kobe. The most important thing is to try and to inspire people so that they can be great at whatever they want to do. Well, there you go. World-class dad. Lost one this weekend. Lost a couple of them this weekend in that one wreck.

All right. Chrissy is with us in South Carolina. Hi, Chrissy. Welcome to the Dave Ramsey Show. Hey, Dave. Thanks for the Dave Ramsey Show. Hey, Dave. Thanks for taking my call. Sure.

What's up? Well, I'm on BabySex 4 and 6, and then on top of my salary, I get a vehicle reimbursement for my job. Great. So I was wondering if I should be fully saving that for the next vehicle, which I drive 40,000 miles a year, so I'm going to get a used one. But so I didn't know if I should be fully saving for that or using 15% for retirement or what to do with it all. You need to be using 15% of all of your income into retirement. That's baby step four. And you need to be budgeting for a car replacement.

The budget, it could look like the reimbursement amount or not. You might need to save more or less than that. I don't really care what the reimbursement amount is. I care what the budget is and the timeline on the car. And so it sounds like this. When are you going to replace the car? How often are you going to replace a car? Every two years?

The one I have now I should be able to use for two years, and then we can use them for 200,000 miles or 10 years old. Okay, so you're going to buy a car about every two years. Yes. And you're going to spend a what on that car, roughly every two years? It looks like I can get a used one with high mileage for about $10,000 to $12,000. Okay, so you're going to spend $12,000 every two years, right? Yes.

And you've got a car that there's something left of value of it that you're going to sell each time. What would we estimate that to be? By the time it has 200,000 miles, maybe $2,000. Okay. All right. And so we say the formula is what you want to spend on the car minus what you get for your car divided by 24. 24 months.

And so if you said 12,000 divided by 24, that would be 500 bucks a month. And then just not worry about the value of the trade-in, right? Okay, yes. So that's pretty close. You see how I did that 12 000 divided by 24 yes so every two you just pay yourself a car payment into a savings account for a long time it's just part of your cost of doing business oddly enough your your reimbursement probably is pretty close to that isn't it uh no my reimbursement it's the fixed and variable

so it ends up being about 1200 to 1300200 to $1,300 a month. Oh, good. Okay, so you're coming out. Well, no, that counts gas and everything. Yeah, that counts gas and everything. Gas, insurance, and tires and oil changes and all that. Yeah, yeah. But basically, in terms of the asset, you're destroying a $12,000 asset roughly every two years.

Oh, absolutely. And so that's a $ 500 a month expense plus the expense of operating the vehicle so the operation side just comes into your budget the replacement fund is roughly 500 bucks a month you see i did that yes now if you raise the price of the car you're going to buy you would raise the amount you save if you lower the price of the car you're going to buy you lower the price you save or if you're going to get more out of your trade-in you would lower the amount that you're saving, and so on. But all I did was just simple goal setting.

I said, okay, I've got a two-year goal, and what's the goal? And I divided it by 24. Boom, there we go. It's just like a Christmas account almost, right? We're saving for Christmas. We now have 11 months until Christmas. Yep, they don't move it, so you need to get ready for it, that kind of thing. Todd is with us.

Todd is in Wisconsin. Hey, Todd, how are you? I'm doing well, Dave. Thank you. I have a question regarding 401K, Roth and regular pre-tax dollar investing. We have a discussion in the household that right now we're doing a majority of pre-tax investing through the 401k. And the logic behind that is right now we are in a pretty high income tax bracket so that we pay the taxes later when we retire, assuming we're not going to

be earning as much. I would assume you didn't do much of a job saving for your nest egg. No, we're doing a pretty good job. So if you've got $5 million in your 401K, your income is going to be up. So is that based on drawing that $5 million out? Yeah, you're going to be pulling the income off of it. It's going to be taxable as you pull it out. Right, but if we want to live, say, out of $150,000 a year. Yeah, but you have required minimum distributions beginning at $70,500.

So this idea that you're – I fully intend for my income to be up at retirement. Because my nest egg is – Our nest egg keeps going. Yeah, I want my net worth to be so stinking high everything out i want my assets producing so much income that that my tax bracket is higher so don't don't plan on being poor it's a bad set of assumptions yeah i guess i'm not planning on being poor i'm just not planning on needing to draw out whatever minimum requirements when you've reached that age yeah it's it's a false it's a

false premise that's people write on the internet is what i'm trying to attack here the bottom line is is the roth is going to come out better uh because you effectively mathematically have invested more because it takes more to get six6,000 in a Roth than it does $6,000 in a pre-tax, because you've got to make about $8,000 to get $6,000 in there. And so it creates an effective higher rate of investment, and it grows completely tax-free, and you have no tax problems of any kind, regardless of what you decide to do with the money when you get to retirement. So it's a false premise that you're, you know, you're saving high income dollars now, high tax rate dollars now, and you're not going to have a higher tax rate later, assuming you do a

great job investing. Now, if you have $500,000 and you used to make $120,000, well, you did a horrible job saving money. And so, yeah, your premise would be correct then. But I don't build our premises based on you failing. I build them based on you winning. And so you ought to have $5 million if you're in that big a tax bracket. I don't know how old you are when you're starting, but that's easily going to tell you then that you wished you'd done that. You can do whatever you want to do. It's all a bunch of theory anyway. Very few people actually live it out exactly the way people discuss it in a vacuum on all these math discussions. It's a bunch of math riddles. But at the end of the day, invest a pile of money and have a pile of money and we'll be okay either

way. But I'm doing 100% Roth and I'm 60 and I make a huge pile of money and I'm doing all Roth everything why? because I don't ever have to touch it I don't have required minimum distributions and if I want to touch it all the growth is completely tax free I don't have the government doing inspections on me to figure out

how my life is working it's all stand alone away from them which is where I want it. Thanks for the call. Open phones at 888-825-5225. Tiffany says, I bought a house and an insurance broker offered life insurance where I pay premiums for 20 to 30 years and get my money back at the end. I signed up for what he called return of premium and was told it was a smart decision. It is not a smart decision.

It was a smart decision for him. He made a lot of money on your... But no, don't do that. Return of premium is a ripoff. The extra money you paid for return of premium, had that been invested, would have returned your premium, whether you die or not.

And so it's a gimmick. It's a gimmick. You should buy term life insurance for 15 to 20 years, not just to cover your house, but to cover your loss of income if something happened to you, to the people that were depending on your income. And so if you are a single person, Tiffany,

and you bought a house, you may not need life insurance at all. That's possible. And so, no, I would cancel the garbage that you were sold, and I would get a different insurance provider that would give you better advice than what you were given here. Never buy return of premium. It is not a smart decision. Again, they charge you extra for that gimmick, for you to take the extra that you

pay, you could return your own premium, regardless of what happened. And just invest that. It's that simple. It's a very simple math formula. Hey, thank you for the following us there on Facebook. That puts us out of the Dave Ramsey Show and the books. We'll be back with you before you know it. In the meantime,

remember, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus. 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 DaveRamsey.com slash show.