The Ramsey Show - App - Your Why Needs to Be Bigger Than Your "But" (Hour 2)

Episode Date: June 5, 2019

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Live from the headquarters of Ramsey Solutions, broadcasting from the Dollar Car Rental Studios, it's the Dave Ramsey Show, where debt is dumb, cash is king, and the paid-off home mortgage has taken the place of the BMW as the status symbol of choice. I am Dave Ramsey, your host. You jump in, we'll talk about your life, your money. It is a free call at 888-825-5225 that's 888-825-5225 oscar is with us to start this hour in lubbock texas hi oscar how are you i'm doing well mr mv how are you better than i deserve what's up well um so my wife and I are going to be debt-free in about 24 hours, and so

our question is, when we look for an investment pro, is it okay for us to interview them like you would if you're hiring someone? That's exactly what you should do. Okay. How should we go about doing that, and what should we be looking for then? The main thing you're looking for is you ask them questions like about their investment philosophy and what types of investments they use and how long they've been doing it.

I mean, you're hiring a consultant, and so if you were going to interview a consultant a marketing consultant you'd want to know they've done some marketing and what's some of their track record in marketing right if you were hiring a real estate agent that's the same thing you would interview several real estate agents the main thing i'm looking for um is their ability to teach you and the fact that they have more of a heart of a teacher than the heart of a salesman. In the financial world, that's really only the two buckets they fall in is one of those two buckets. And about 85% of the people are sales slimers.

You'll feel slimed like I need a shower after you met with them, right? And you know what I'm talking about. They're transactional. You feel that they're there for what they can get rather than what they can give. You know people like that, don't you? Yes, sir. Your wife will smell that a mile away, by the way. Okay?

Ladies have slime antennas that are unbelievable. They can sense a slime ball a mile away. And so you listen to her input, how she feels about having met with this professional, whether it's a man or a lady that's the investment professional. So you're looking for someone with the heart of a teacher. And you will know they have the heart of a teacher if you leave having met with them and you know something you didn't know before you came in you just got taught right right right you got schooled and that's a good thing you want to be schooled that's what we're here for because you're not there to do stuff if they if they adopt

a position a body language a tone a head tilt arrogance, like you're supposed to do this because I have all these letters after my name and I know a lot, and they drop their glasses down on the end of their nose, fire their butt. You do not use people like that. And they're all over this business. They're all over the business. Because they work really hard to get all these designations, and then they think they're smart.

And I don't really care. I've got an estate planning attorney, for instance, that's one of the most brilliant estate planning attorneys in the United States of America. And he's very expensive. But the interesting thing about the guy is even though he's one of the smartest guys in the entire space he's really humble and he's really concerned that i understand what we're doing with this ridiculously complicated estate plan that we have to keep the government's hands off the money that i've already paid taxes on when i die and so um you know that kind of stuff right and so but his job is to explain to me that's his job his job is not to be the brilliant estate planner his job is to explain to me so that's his job. His job is not to be the brilliant estate planner. His job is to explain it to me

so that I can have a brilliant estate plan. Because I'm not putting something in place I don't understand. Your job is don't put money in something you don't understand because somebody had a good suit and you felt like they were smart. Oh, that's how you lose your money. Okay. Does that make sense to you? Yes, sir. Yes, sir.

Absolutely. And that's one of the ways that we vet our smart investor pros we want them to have that heart of a teacher and we want them to give investment advice that's consistent with what you hear around here and they do and they do um and so and if they don't we don't you know we don't keep them as a smart investor pro or we don't hire them in the first place we don't hire them we don't hire them they don't hire them. We don't hire them. They don't work for us, but we don't agree to endorse them, and they pay us an endorsement fee. So if you want to meet with more than one SmartVestor Pro of ours, you can do that,

and you can meet with other people that aren't. That's fine. And just interview. That's a good idea, you know? Just click SmartVestor at DaveRamsey.com and then put your stuff in, your information, and it'll drop down a whole list of the SmartVestor Pros in your area, and you can meet with three or four of them if you want. And then you choose. I'd rather you do that than you go, Dave Ramsey said, you know,

and don't do it because Dave Ramsey said do it either. Do it because you understand it and you're plugging into that data. And that's how you make your decision. Later on when things get rough, when you made the decision, you will be comfortable with your decision. If someone else made your decision the decision, you will be comfortable with your decision. If someone else made your decision for you, you will be uncomfortable and stressed out. Tom is in Greensboro, North Carolina. Hey, Tom, how are you?

Hi, Dave. Great to talk to you. You too. Sure. How can I help? My wife had a lot of things with credit cards and whatever growing up. She thought that's the way it's supposed to be. And we started dating, and she was concerned that I might have a problem with her finances and whatever.

So we went to Financial Peace University, and it literally saved her life. And she credits you with helping her be happily married. Wow. Literally. So fast forward into now we have a good problem to have. In about three years, we're going to be able to comfortably pay off what student loan debt she has left in our house. Great. And so I have a financial planner, and we're putting the money all over the place.

And so we're not having a heated argument. We're having a discussion. The discussion is, I want to get out of debt, and they're telling me, you have a 3.5% fixed rate on your house, and we can make more money than that on your 3.5%. But I want to be at debt. So my wife and I were talking about this last night. She said, call Dave. Whatever Dave does, I'll do, literally, and that's why I called you.

Okay. Fire your financial planner. Fire them? Yeah. Okay. They're useless. So listen, here's what they're proposing. Okay, what do you owe on your home?

201. Okay, what's the home worth? Probably 350. Okay, based on the logic and the thought process that they're using, if you have the opportunity to borrow a million dollars on this $250,000 home at 3.5%, you should do it. Because they can take it and invest it and make more. Right.

That doesn't feel comfortable, does it? No. Because in this drama-based, crazy, whacked-out example I gave that's not reality-based at all, what I did by putting all those extra numbers on it is I made you feel what this guy has completely left out of the equation, and that's risk. Correct. Borrowed money equals risk. And he left that out of his little equation.

Based on the fact that you don't measure risk at all, you should borrow all you can, no limits, at three and a half, because he can invest it and make more. That's an absurd but statement. Correct. That's why absurd but statement. Correct. That's why I think you ought to fire him. And I think you ought to pay off your house. And by the way, I don't think you ought to be investing right now. Do you get your student loans paid off?

You remember that part in Financial Peace University? You shouldn't be putting money in investments until you get through Baby Step 2 and get your emergency fund in place. And you shouldn't have your emergency fund fully funded until you get out of Baby Step 2. You remember the Baby Steps? So, that's what Dave would do is follow the Baby Steps and I would get my house

paid off and I would get an investment advisor that was aligned with the system and the process that I was using. There's logic to this. This is the Dave Ramsey Show. This is big news, guys. You need to stop and listen. The Fed decided not to raise interest rates.

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Their team of experts will give you more clarity about your options and more peace, knowing you're saving significant money in the long run. Call 888-LOAN-200. That's 888-562-6200 or churchillmortgage.com. Sandra's in New York City. Hey, Sandra, welcome to The Dave Ramsey Show. Hello. Hi. How are you? Better than I deserve. What's up in your world? I have a quick questionsey Show. Hello. Hi. How are you? Better than I deserve. What's up in your world? I have a quick question for you.

Okay. At my job, I have a 401k that matches me at 4%. Awesome. And last year, I got a pension, which I rolled over into a rollover IRA. Good. Now, I was wondering if I should open a Roth IRA and slowly transfer some of that rollover IRA into the Roth because I can't, you know, pay for the full amount. So I figured maybe I could do a little bit at a time.

How much is in there? Or currently a little over $18,000. Okay. It costs you about $5,000 roughly or a little less, maybe $4,000 to $5,000 in taxes to convert the whole thing into Roth. Okay. And so you would need to have an extra $4,000 or $5,000 laying around that year if you do the whole thing. If you do half of it one year, it would be $2,000 or whatever. I would want you to be out of debt have your emergency fund in place be putting 15 of your

income into retirement getting that match and doing new roth iras or whatever up to 15 of your income before i fooled with this do you have a home no okay um then extra money beyond 15 going into your retirement if you want to do some more investing, an effective way to do that would be to roll this to Roth and pay the taxes, or a portion of it to Roth and pay the taxes, and a portion of it next to pay the taxes, and so on. Just go right down the line like that. But, yeah, you're exactly right. I would start moving it to Roth, but there's no emergency.

And it's not a matter of opening a Roth. It's a matter of converting a portion of this into a Roth. It doesn't keep you from doing a new Roth that year for $5,500. So you can do $5,500 into a Roth IRA and roll this too if you want to. But it's going to create taxes, and you need to have the extra money in cash without using this money that's in the account to pay the taxes. And that's what I would do. Martha's in Los Angeles.

Hey, Martha, welcome to the Dave Ramsey Show. Hi, thank you for taking my call. Sure, what's up? Okay, so here's my question for you. I have around $350,000 in my 401k currently. I also have an additional $250,000 in life insurance that's offered through my work. I always figured that those two amounts together would be enough to leave money for my daughter. But now I'm starting, since I started listening to your show, I'm wondering what happens to the money that's in the 401K. Does that money automatically go to her dad if I wanted to,

or is it going to be just like small payments? No, it has a beneficiary on it, and it will go to the person that is the beneficiary. And you've already filled out that paperwork if you have a 401K. Her dad is not your husband no um you divorced yes okay um do you want him to handle the money yes he doesn't have no problem with him okay yeah no i know he doesn't have to i have no problem with him having him we already discussed that he would take her if anything happens to me,

or I would take her and we have each other set up as a beneficiary on our life insurances for that reason because we do trust each other. Our relationship just wasn't in that place at the time. Okay, I would suggest that both of you change that and accomplish the same thing a different way. Here's what I would do. I would set the beneficiary on your life insurance, your 401K, and the same for him, as a trust for the child. So upon your death, both of those sets of payments go into a trust for the child. Name your ex-husband as the trustee of that trust.

And then the money in the trust has to be managed according to the terms of the trust that you put in place. And they can say, then you can dictate what they're there. That keeps him from using the money under any circumstances for anything except for the good of the child. If he just decides to go crazy or he married a crazy person and they decided to spend his money, which, by the way, is in his name because you left it to him, you didn't leave it to the kid the way you're doing it now. Oh, okay. And that bothers me. So I would rather the whole, you got $800-something thousand here we're talking about,

going into a trust for the good of the child, and usually that trust would not be formed unless you die, and it's formed instantly upon your death, and the beneficiary for the life insurance is the name of that trust, your child's trust, you know, Anna's trust or whatever you call it, right? And then you can say things in that trust like the money has, you know, the income off of this $800,000 can be used for the child support, so that could go into the household of your ex-husband to manage and take care of the kid.

Any of the principal could be used for stuff like a major medical problem or going to college or buying a car at 16 or something like that, but they shouldn't take the money out, only the income other than that. And then when the child graduates from college with whatever's left, or something like that, but they shouldn't take the money out, only the income, other than that. And then when the child graduates from college, with whatever's left, it would go to them or could go to them at certain ages, some at 21, some at 25, some at 30. You can do whatever you want to do in that. But that's a part of putting your will together. Your will forms that trust upon your death, and you name the beneficiary of each of those as the trust.

And that just keeps everybody honest because then if your husband, ex-husband, or if you misuse the money other than for the good of the child, as the trustee, you're in violation of that trust and you get your tail sued off by that kid when they grow up and get yourself in a real mess. So you have to manage that for the good of the kid which is what this is all about it's taking care of the kid this whole discussion is so good for you mom well done that's a my it's not a big thing to do what i'm talking about you ought to have a will anyway and you ought to just leave the beneficiary but it just keeps everybody honest um 20 years

later 15 years later 10 years, and that kind of stuff. That's how ours was set up. Now, when our children were no longer minors, we changed to that. And our estate plan, you know, just started being the stuff was just left to these grown people that are our kids, you know. And so it changes at that point. But it was left to a trust with a relative being the trustee. And obviously, guardianship was also addressed in the will upon our death and that kind of thing. So it's all laid out.

We're not waiting on the government to figure out what's happening with your kids or your ex to take care of the kids' money. It's all told what to do, how to do it, and they have to follow that. And if they don't, they can really get themselves in a pinch, and that's really what you want. You want that fiduciary responsibility, it's called, to take care of that. So good. Good question. Thanks for calling in. Will is in Houston. Hey, Will, welcome to the Dave Ramsey Show.

Dave, pleasure to visit with you on a Wednesday. How are you doing? Better than I deserve, sir. What's up? Good deal. Wife and I are working through steps four, five, and six, thanks to you guys and your teachings. My question is, where is the best spot to put the emergency fund money?

Is it just better to leave it in a checking account that's making one and a quarter, or can you put it in like a small index fund or tied up with some bonds that you have access to within a couple of days? What's the best thought process on that? I keep mine in a simple money market account. It's probably earning a little over one somewhere in there. It might be getting up a little above one right now, but I'm not worried about what that money makes

it's insurance it's not an investment i don't look at that money as insurance as an investment i look for it to make me rich it's there to protect the other things that are making me rich like 401ks you don't have to get into them to fix your transmission because you got an emergency fund and so that's that's really what it's for. And I have always just used a money market account. In my case, my local bank, because we've got a big business relationship with them as well, treats me very well on the local money market account there. I've also got one open with a mutual fund company. But it's just a floating money market rate.

No, I would not put it in bonds for sure. And I haven't put any of my emergency fund in any index funds, never. I don't put any of it at risk. I don't make any of it hard to get to. I wouldn't put it in a checking account unless it's a checking account you don't use. If it's your operating account, I wouldn't let it float in there because the temptation would be to let it slip out and go buy a couch, which is not an emergency, by the way, if you didn't know.

Hey, thanks for calling in, man. This is the Dave Ramsey Solutions, Kyle and Jordan are with us. Hey, guys, how are you? Hey, Dave. Hey, we're good. How are with us. Hey, guys. How are you? Hey, Dave. Hey, we're good. How are you? Better than I deserve. Where are you guys from?

We live in Woodstock, Georgia, which is close to Atlanta. Absolutely. Know it well. I actually spoke at Woodstock Baptist Church not long ago with Pastor Johnny Hunt. Good guy. Very cool. Well, welcome, you guys. And you're here to do a debt-free scream.

Yes, sir. Yes. Love it. And how much have you guys. And you're here to do a debt-free scream. Yes, sir. Yes. Love it. And how much have you paid off? $26,400. Good for you. And how long did that take? About 13 months.

Good for you. And your range of income during that time? Started at about $110,000 and we're up to about $119,000. Well done. Good. What do you guys do for a living? I work in IT for a managed service provider. And I am a high school English teacher and a competition cheerleading coach. Great. Good. What do you guys do for a living? I work in IT for a managed service provider.

And I am a high school English teacher and a competition cheerleading coach. Great. Cool. Where do you teach high school? Harrison High School in Kennesaw, Georgia. Yeah. Very fun. Good for you.

What kind of debt was the $26,400? It is a little bit of everything. It was a couple of cars. I had some student loans, credit cards, wedding, kid, all that stuff. You did it all? Mm-hmm. It's all your fault? No. You said I.

I was just going with you, dude. He at least had a used car. Mine was brand new. I made a... How long have you two been married? A little over two years. I like your answer to that. Yeah.

So about a year in, 13 months ago, something happened, and you guys go, game on. We're getting out of debt. What happened? We signed up to take FPU at North Metro Church. Oh, okay. Yep, that's our church. Kyle has been listening to your show forever and read all your books and wanted me to get on board, and it just took me a little while. It really took me getting into the class to realize that we needed to get gazelle intense.

And we were actually pregnant at the time with our son. So we started the class in October. He was born in December. So we followed your plan. We just stockpiled all of our cash and paid all of his medical bills in cash, which was great. That was about $6,500 on top of our debt. So then we brought him home at the end of December and then just threw it all at the debt. Got it.

And then game on. Yep. Okay. Perfect. Well, there's nothing like a little one coming along to make you get serious about life. Yes. Yeah. You get to do grown-up stuff on steroids then.

Yeah. I love it. Well, well well done you guys very very cool so that happens a lot that when a couple goes into financial peace university one or both of you see things differently than you did before because you get knowledge there knowledge always gives you a different set of eyes you know and you get uh wisdom which is knowledge that you get to apply in that case so what happened in the class that caused you to go okay we're gonna do this okay i'll go first um i think for me just seeing the value in doing a budget he wanted um kyle wanted us to do a budget together for our entire relationship, even before we got married. And I was just hesitant. I felt like I'm young. I work really hard. Life is never going to get easier for me than it is right now. So I should live it up, which sounds good. But for anybody listening, that is not what I would say now. So I think the written budget definitely got me on track. And then we both saw the value in tithing.

So our families have always tithed our entire lives, but we were hesitant when we started making our own income. But then finally we saw that when we really were trusting God with our finances and saying that this is your money, not us, we're just stewards of it. Then that's when we really started seeing changes in our lives, in our motivation, as well as our income. Very good. Well, Rachel says a budget is permission to spend. So a budget, you know, you can actually do the things you do with more joy because you don't have to, it doesn't have to be tight.

You can choose for it to be tight because everyone tends to get out of debt. But it's your choice. You're making the choice. And so somehow folks sometimes view a budget as some outside force that invades their life. And no, you're in charge of it. You get to tell it what to do. But then once you do it, it tells you what to do, right? Right.

Yeah. So well done, you guys. So what do you tell people the key to getting out of debt is now that you've done it? I tell people that just to know that doing this is a short-term fix to get out of debt. Just doing this doesn't mean you have to do it forever. It is painful and it does stink sometimes, but it's just a chapter in your life. It's not going to be like that forever. So live like no one else and later you can live like no one else. Yeah. Cool. What do you say on it, Jordan? I think the same thing. It took us about 10 years to get in this much debt. And so, you know, for me, I wanted just that immediate, okay, the problem is solved. Um,

and it took us longer, of course, than we would like, but you know, it didn't take us the 10 years it took us to get into debt. So that's good. It was still faster. And you did it in one year, basically 13 months. Yeah. Very good. Very cool. What was the hardest part for you? I think the hardest part for us was staying motivated, making these payments and stuff.

It's easy to lose faith and want to give up and be done with it. And I think the most significant change that we made was one night we got together and made a big poster chart with wheels and colors and milestones. And as we were making progress, we would update that and it would kind of give us an insight as to when all this mess would be over. And knowing that there was going to be an end date to that

and kind of visualizing and seeing that progress, I feel like really helped us, helped us out. But cheerleaders need a poster for the pep rally. Yeah. That makes sense. Definitely. It was so hard for me to say no to things. And I just, I love to eat out.

I love to go shopping. I love to, you know, just have a good time. But we had that visual up in our bedroom. And every time we made a payment, I just filled it up with a different color marker because that's my thing. And, yeah, it just really kept me motivated, and it showed me that there are so many ways that we can have fun that don't involve spending money. Right.

And there's always the light at the end of the tunnel. When this is done, we can spend some money. Exactly. We'll have some. Very cool, you guys. Very well done. Now, you had a baby, you said, a little boy? Yes.

Holden, is that right? Yes. That's it. Okay. Is he going to be in the picture, or are we going to leave him over there with the keeper? He's coming. He's coming. Okay.

Very cool. And we've got a copy of Chris Hogan's book for you, Retire Inspired. Great. Thank you. Who's this bringing for you, Retire Inspired. Great. Thank you. Who's this bringing him in? This is my mom, Lisa. Ah, okay. So was mom a cheerleader in the process?

For us, yes. Yeah? Okay. Definitely. Very cool. Very cool. Well, we've got a copy of Chris Hogan's book for you, Retire Inspired. And, of course, that's the next chapter for you guys to be millionaires and outrageously

generous as you go along. So very well done. Great story. I appreciate you sharing it. Kyle, Jordan, and Holden, 26,400 paid off in 13 months, making 110 to 119. Count it down. Let's hear a debt-free scream. Three, two, one.

We're debt-free! Yay! scream three two one we're dead free well done well done i love it congratulations you guys very well done man that's fun that's as good as it gets right there lots of young couples doing their debt-free screams right now we got old couples too and um we had some single ladies come on lately we had some 30 year old ladies this week coming in uh knocking it out as well and i mean this is uh had some guys coming in yeah it's everyone's doing this stuff and it's you know there's not a bad debt-free screen. There's no such thing. The idea that somebody stops and says, I'm going to take control of my life.

I'm going to make the choice and choices to win. See, the thing is, you're not stuck. You're not stuck. You may have a big mess. You may have a little mess. You may not have a stuck. You may have a big mess. You may have a little mess. You may not have a mess. You may just have some debt. But you're not stuck.

You get to decide when you're going to change. When are you going to change? When? I'm talking to you. When are you going to do this? When are you going to get on a budget, get yourself out of debt so you can invest and you can give like never before? When are you going to do this?

Broke people can't help other people. You're too broke. When are you going to do it? It's your turn. Ready? Set. Go! When are you going to do it? It's your turn. Ready? Set? Go! Thank you. Our question of the day comes from Blinds.com.

They have a 100% satisfaction guarantee. It means even if you mess up, if you mismeasure or you pick the wrong color, they're going to remake your window blind for free. With Blinds.com, you also get free samples, free shipping, and with the new promos they run every month, you're going to save money. Check out the promo code RAMSY at Blinds.com. Sandy is in Minnesota. Our financial advisor recommends nursing home insurance since we're 60 and 54 years old. In order to pay the premiums, he suggested we lower our investing.

Is this a good idea? Well, I don't know how much you're investing. I recommend strongly that you have long-term care insurance, nursing home insurance, once you're 60 years old. I wouldn't buy it at 54. I'd buy it at 60. And, you know, so if you want to wait on the 54-year-old a while, that will save you some money and you wouldn't have to lower your investing. Most households have the ability to continue to invest at 15% of their income if you're out of debt. Now, of course, we recommend you be out of debt, everything but your house, and have your emergency fund before you start investing. If that's where you are and putting 15% of your income into retirement with no payments

except a house payment, you should have room for long-term care insurance in that budget depending on your income. But most people can squeeze that in. So I definitely would buy it on the 60-year-old. I'd buy it on the 54-year-old when they turn 60. I don't know whether I would reduce investing to cause that to happen. I'm going to fit it into the budget, though. It's very, very, very important to get long-term care insurance in place.

Nursing homes are a big deal. And there's a lot of misunderstanding about nursing homes out there, by the way, and long-term care insurance issues. Thing to remember is this. The only government-funded nursing home is welfare. That's the only one there is. It's a welfare program. And so sometimes I hear people say, we're going to move everything out of my dad's name so he qualifies for government.

Welfare is what you're saying and by the way that's fraud and they will come back and look back up to five years on assets you moved out of his name in order to falsely qualify and act like he's poor people when he's not poor people so don't do that. Plus, have you noticed that subsidized housing is a different quality of housing than the house that you live in if you're not living in subsidized housing? Government program provided things generally are much lower quality. Would you agree? Yes. On almost everything. Nursing home is no exception. There's a few things, a few times you're in a setting where that's not true,

but most of the time you don't want to be on welfare. Hello. That's what it comes down to. Seventy percent of you listening, 70% of the people over 65 require some type of long-term care insurance needs, long-term care assistance. Now, the average time spent in a nursing home is only 2.4 years. And, you know, the average cost is around 50 grand a year. So, you know, you're not talking about a ton of money but you're talking about 250 000 bucks

it can be well that's not that much if you do 2.4 times 50 but i mean that's a hundred thousand dollars and some change you say 100 and 125 150 right but if you've saved 200 000 and papa goes in the nursing home and burns through 200 grand and and all you had was 200 grand, and he dies, and Mama is still healthy. Mama's got the rest of her life to live broke then because nursing homes. Well, the nursing home took all my money. No, you paid for a service. Nursing homes are not thieves. If you go to a restaurant and you buy a dinner,

you don't say, the restaurant took all my money. You say, I spent money on a restaurant. If you buy a car, you don't say, the car dealer took all my money. No, you bought a car. That's what you're doing when you're buying a nursing home. The good news is these days, the better policies, which is most of them that are still surviving, a lot of the companies have gone out of business, the better policies are providing in-home care as well, which is actually cheaper and, in most cases, a better quality of care because you get to live in your home. You have the dignity of staying with your stuff.

But it providing, you know, nursing home care, nursing care in the home to take care of things. So, you know, it's 70% of the claims, as a matter of fact, are now for home care. So it's a big deal. It's a big part of the business now to not actually send you to the nursing home. But the chances of you using a nursing home policy of any kind prior to age 60 are less than 1%. Isn't that amazing? That's why I don't recommend you buy it until you're 60 years old.

Yes, rates are cheaper as you buy younger, but you have no chance of using it. So it's not really cheaper. Think about that. The average age of a claimant taking this out is 79 so you're going to pay the bill for a few years on average before you use it on average you're going to stay in there 2.4 years or get care of some kind for 2.4 years out of the money that you spend but it's i tell you if you don't have at least $2 million saved, it's an essential part of financial planning to have long-term care insurance

beginning at age 60. Hunter is with us in Tucson, Arizona. Hey, Hunter, how are you? Man, Dave, it is an absolute pleasure to speak with you. You're a beast. Thank you so much for giving me and my wife the tools to change our family tree. We really appreciate it. Honored to speak with you, sir.

How can we help? Awesome. So my wife and I are on baby step seven right now. Our income is going to be dropping from $65,000 to $30,000 while my wife goes to nursing school. And then it's going to shoot up after that, obviously. Right now we have about $150,000 above our emergency fund in non-retirement investments. Way to go. Is it wise for me to max out my 401K and supplement our household income

with those non-retirement mutual funds until my wife gets out of nursing school in three years or until my income goes up? Is there a net gain there for us? Yeah, especially if it's a Roth IRA, because you're converting non-protected, non-sheltered mutual funds into tax-free growth mutual funds. Effectively is what you're doing. You're having to run it down through your household to do it.

But in a sense, you're saying you're going to max out your 401K. By doing that, you don't have enough money to operate your household to do it. But in a sense, you're saying you're going to max out your 401K. By doing that, you don't have enough money to operate your household, so you're going to move some of the money out of the non-retirement investments to cover that. So in a sense, you're running it through the household to get it into the 401K. Does that make sense? Yes, sir. That's crystal clear.

So it's kind of like it's not, but it's kind of like you were rolling the money into a 401k. You can't do that. So the way you're doing it is the only way to get in there. But, yeah, I think that's a really good idea because what that money turns into from your age until retirement age, growing tax-free, I'm saying if the 401k is a Roth 401k, particularly then, I would do that. Plus, if you've got a match, it gives you another reason to do it. Yeah, I would do that. You guys have done a got a match, it gives you another reason to do it. Yeah, I would do that. You guys have done a great job with your money, man.

You are killing it. Very, very well done. I love that. Just beautiful. Man, fabulous. Open phones at 888-825-5225. Michael on Twitter says, I recently paid off all my student loan debt. I'm single and 25 years old.

I want to save, but what do I save for? I don't need a car or a house. Well, I would just begin to build wealth then. Get your emergency fund in place of three to six months of expenses and begin to pile up cash cash you probably are saving for another house if you don't need a house today maybe that's true um maybe moving you maybe you know if you buy a house and then you end up marrying usually you've bought you find out you bought the wrong house so um but it can go up in value if you want to buy one now.

But anyway, if you want to just pile up money in some mutual funds, that's fine. And certainly start putting 15% of your income away for retirement in good growth stock mutual funds. I definitely would do that. But on the side, just start building you an investment account, maybe something like a no-load S&P to save up your down payment for the house, even if it's five years before you buy. Thanks for writing in.

This is The Dave Ramsey Show. This is James Child, producer of The Dave Ramsey Show. Once again, you made The Dave Ramsey Show one of the top five most downloaded podcasts last year. To get your daily dose of motivation and inspiration, subscribe today.