Live from the headquarters of Ramsey Solutions, broadcasting from the Dollars Car Rental Studios, it's the Dave Ramsey Show work that is done. Cash is king in the paid off home mortgage has taken the place of the BMW as the status symbol of choice. Rachel proves Remzi personality number one, best selling author several times over my daughter as well as my co-host.

Today here on the air, open phones at eight eight two five five two two five. That's triple eight eight two five five two to five.

Rachel has a new book coming out in January. We're on presale right now of it. It's called Know Yourself, Know Your Money. And what we've discovered around Ramsey over the years is that personal finance is really 80 percent behavior. It's only 20 percent had knowledge. And what causes our behaviors understanding those causes us to be able to have a better chance of winning with money, right? That's right. Yeah. The that bulk the behavior change is interesting because I feel like we talk about the how to a lot around here and needed how to budget, how to get out of debt, how to give, how to invest.

I mean all of it. But then sorry to ask the question. OK, so I know how to handle money, but why do I handle money the way I do. And when you start to really have some self awareness around your habits, around money, your behaviors, it kind of opens up this whole new lane for you to see yourself in a different way. And then on top of that, being able to change some habits, change some behaviors to help you with money faster.

And there's a lot of elements of this that come into play. It comes, you know, your personality, your money tendencies, your money fears. A lot of this drives why you handle money the way you do. And one of the big reasons why you do is from your childhood, how you grew up, the home you grew up in. Yeah, you have to face that.

Probably about a lot of issues. Yeah. Yeah. You know, different things. Why is it I you know, if you ever spoken to your child and you opened your mouth and your parent came out of your mouth, you know, that's obviously family of origin, the way you grew up, the way your mom spoke to your dad, spoke to you, you turn around, do that with your child. Exactly. Whether it's positive or negative.

Yes. And what's interesting is when I was writing the book, I interviewed a couple of psychologists and a lot of things that you read in that world, even like psych. When I went in college, I heard over and over again and read, you know, people did research that said, fifty percent of you as nature, fifty percent of you as nurture. So fifty percent of you is just your genetic make up. Fifty percent is nurture. But I was talking to John Boloney, Dr.

John Delaney this morning and we were talking about this whole concept. And he said he just read a study that came out, I think, of Berkeley. I'm not sure where, but talking about the relationships in your life and how they shape you so much greater than just that. Fifty percent like that that researchers are coming out now. And the behaviors that you have and the way you function in life has to so much to do with who you're around and how you grew up.

So it could be that when you do something stupid with money, we're not going to blame it on your parents. But it could be that it was dialed in to you to do that because that's how they handled money. That's right.

That's what you saw. So it's either that you mirrored what your parents did or talking to people. They do the complete opposite and their parents do something and they say, mom and dad, we're tightwads.

I never had any fun. So all I'm going to do is have. Yes, or my parents. All they did was have fun and they were totally irresponsible. So now I will be a saver no matter what. I'm not going to be broke like they are. I mean, yeah, you hear your wife or you just end up subconsciously just doing what your parents are doing if you don't really have a conscious thought about it. So if you didn't think about it on purpose.

Yes. So the way money is communicated in a household is really two ways. It's verbal communication and it's emotional communication. So the verbal communication can be open or closed and the emotional communication is stressed or calm. So what ends up happening is it creates this like beautiful little quadrant of the way of communication. So the first quadrant is the anxious classroom, and this is where it is verbally closed and emotionally stressed. So if you grow up in a home that your parents never talked about money, but anything around that subject, just there was a lot of tension, a lot of stress.

You couldn't pinpoint why? Because no one talked about it. But you felt that the second quadrant is the unstable money classroom. And this is when when it's verbally open and emotionally stressed. And so you are hearing conflict. You're probably hearing fights. You may hear your parents had the same fight about money over and over again. Maybe they fought with extended family about money. But you just heard it. It was there.

Well, they liked Bill wasn't paid in the House, just about we're about to be evicted. And those kinds of things happen. And it's and it's shout out loud in front of the kids.

That's right. You hear. That's right. Or it's a well off family, but they just bicker about money all the time. There's no plan. There's stress there. And it's just like, oh, we can't get on the same page and you just hear it over third money classroom is the unaware. I'm in a classroom and this is where it's verbally closed but emotionally calm. So this is kind of my classroom. Maybe your head was in the sand as a kid like you just didn't even think about money because it wasn't an issue.

It was. We talked about there was never tension around it, it was kind of this no, you had no clue. And then the fourth many classroom, which is the healthiest, is the stable, secure classroom. And this is where it's verbally open and emotionally calm. And in as my classroom, you don't have to have a ton of money to be in this classroom, but it means that the household is managed well. There's control. There's a plan over money.

And it's talked about it's open. It's not a shameful topic. It's not a taboo subject. It's not in the budget. It's not. That's not screeched. Yes. Yes. Instead of just we just don't have the money.

Honey, I'm sorry. That's right. That's right. So these four kind of money classrooms you can place yourself in. And it's so and it's so interesting because you can look back and say, oh, wow, I grew up in that environment. And now this is a lot of the reason why I do X, Y and Z, but with money.

Yeah. And it helps you once you address that, then you don't have to. It helps you want your self aware that you're in the classroom you grew up in is affecting your decisions. You can go, OK, that's either good or bad. I can just decide not to do that. It's just like you did about not doing something else your parents did or doing something else your parents did. Yes. Yes. But it's an intentional act then to say I'm going to align myself with that classroom or I'm going to realize it was there and it affected me, but not anymore.

Yeah.

And in every classroom, there's there's some weaknesses that come. So that anxious classroom where money was never talked about, it was very stressful. A lot of people I grew up in this classroom, they don't even know how to communicate about money like that. It's not that they're scared to. They almost just feel like I don't even know where to begin, like nothing was modeled. And that is that you really have to watch for that. The unstable classroom.

You may know how to communicate, but you don't want to communicate about money because that in your time you talk about money, you get anxious. Yeah, it's and it's just fighting a conflict. If I talk about money, it's just me conflict. So I just want to avoid that third money classroom. The unaware is I find a lot of these are the spouses that say, oh yeah, well, my husband just takes care of the money and I'm good.

Like, I don't even want to know. Ignorance is bliss because it was taking care of my whole life and it felt good. So I'm going to let that happen. Or my my wife just takes care of it. I'm not that worried about it. Right. It's this ignorance is bliss. And you're like you you have to engage it, you have to engage it.

And then that fourth money classroom, really the weakness there is that there can be a level of not realizing the sacrifices that your parents made in order to have a healthy, secure money classroom. It takes a lot of work, a lot of intentionality, a lot of boundaries, a lot of, you know, being communicating on purpose with your kids. There's a lot of work involved to create this. And if you grew up in that classroom, you may not have entitlement, but a little bit of like, oh, yeah, if my parents are money smart, I will be, too.

And that's not always the case. You have to learn how to do it yourself.

Hmm. Very good. Very good. The book is Know Yourself, Know Your Money. It's own presale right now and you can get it. It'll come out in January the 6th. We'll ship it to you if you buy it ahead of time.

Like today at Dave Ramsey, Dotcom, Rachel Cruise, Dotcom, either one, you'll get one hundred and fifty dollars worth of add ons, including the audio book, which you just finished recording the ebook and of course, a coaching session. All kinds of things. You need to check it all out of Dave Ramsey Dotcom. This book is gold. It is gold. It's going to be huge. This is The Dave Ramsey Show. Yes, folks, mortgage rates are really low, and while that's great news, watch out for mortgage lenders with a slick pitch claiming they have the lowest rates.

Those deals often come with bad advice and hidden fees. Instead, I want you to call Churchill Mortgage to buy a new home or refinance because they think, like I do call today, triple A loan, 200 or Churchill Mortgage Dotcom.

This is a paid advertisement in MLS Idee one five nine one in the malaise consumer access dog, equal housing lender 1749 Mallory Lane Sweet 100. Brentwood, Tennessee three seven zero two seven. Thanks for joining us, America. This is The Dave Ramsey Show, Rachel Cruze Ramsey personality is my co-host today. Jonathans in Tulsa, Oklahoma. Hi, Jonathan. How are you? Hi, Dave. Hi, Rachel. How are you guys doing today? Great.

How can we help? So trying to condense this got notified of a sheriff's sale in 2006, December. So in order to save the House, filed for Chapter 13 in January 2017. Since then, early this year, my wife and I, we discovered the Ramsey plan and we've really turned everything around. We've almost doubled our annual income this year. Wow. And over the last three months have been able to save a little bit of money. Now, my question is, on four years at the end of the fourth year of my 59 month plan and my Chapter 13.

So my monthly payment to the trustee is 4000. And but currently we have an ample income take home. And I'm also cash rolling my daughters, my youngest daughter's college. So that's not an issue. And we still have money left over. And I'm wondering, should I should I take that money and give it to the trustees to try to get the discharge on the Chapter 13 sooner or because they rolled the mortgage payment into the Chapter 13 to the tune of two hundred and twenty four thousand dollars at the end of the bankruptcy next December and twenty twenty one, I should have a balance of about sixty thousand on the mortgage and I would do that with the lifestyle changes that my wife and I have made the income increase through promotions.

My wife has to say to households, I have one side hustle. I mean, we've really done a nice recovery, brother. Well done.

Yeah, we we've done I think I can actually make that payment.

So how much cash do you have currently?

I have four thousand dollars because oh you know, you don't have a big corporations, you don't have a big pile of cash, you've just got that extra.

Feels like a big pile to me. I know.

But it wasn't like you've got enough to pay off the bankruptcy through the end of the year. No, no, I don't know.

I don't. So I'm going to have to continue making those payments.

I thought you said you had piled up a bunch of savings. Well, that to me. Three thousand dollars. Oh, OK. Well, it is after.

It is after being in bankruptcy. So, yeah, I get it. I'm sorry. I just because I was visualizing we're almost into the bankruptcy. Maybe we pay a little but.

Well I got twelve months left. Yeah. And so what is your household income today. Right now it's at one fifty seven. OK, what I would do is just ride it for right now and pile up cash, pile of cash, and then at the end of the bankruptcy you have you get down and there's four months left and you want to go ahead and send them the final four months.

Just call the trustees office and arrange that because it'll confuse them. OK, there are so many things do, yeah. Seventy eight percent of the Chapter 13 fail and turn into Chapter seven. Most people don't make it the 59 months, the 60 months, OK? And so it does confuse them. The trustees, the Chapter 13 trustees in general are fairly competent.

Some of them are excellent. They're one of the few bright spots in the entire bankruptcy community. And so if you call it, you may have to work to get past the first secretary or paralegal. But if you can get to somebody that has a decent decision making or analytical skills, you can convince them that they can accept your final four payments in bulk and be done with this and go ahead and advance the discharge, because I don't think you're going to get there much faster than that, are you?

No, I don't think so, I mean, I may be able to save six months off, yeah, that's just sick for four to six months, you could just do in one lump.

And that's not super confusing. And then they could just discharge you early. And it's really not rocket science.

You just got to. But I wouldn't just generally I wouldn't just send the check and hope they figured it out. Right.

Right. And because my my plan was is to get out of bankruptcy and pay off the mortgage. Same same time frame.

Well, you don't you're not going to have 60000 thousand plus six months of the bankruptcy.

But do you know that's why you have to go to the end of the bankruptcy to pile up that cash?

Yeah, we'll wait on that to finish the bankruptcy, get the discharge and get the discharge in your hand before you write the check for the balance on the mortgage, OK? Because I don't want somebody rolling back up something out of that 13. And again, the mortgage company now is confused because they think you're still in a thirteen. By the way, they're not even supposed to talk to you while you're in the 13. Right. You're trouble getting information out of them.

Yeah, well, they won't talk. They go through the attorney. Yeah. So, yeah. So, yeah, let's let's get let's just get the discharge. And if it takes three more months to pay off the House to get all the smoke out of the air from the bankruptcy and get everything solidified, I think that's going to be safer for you. And so, yeah, six months out, go ahead and do an advance payment, having arranged that with a thirteen.

And then once you get the discharge in your hand, wait a couple of months, talk to your mortgage company and then write him a check and pay them off.

Way to go. That's awesome. That's amazing. OK, walk through Chapter 13, Chapter 11, Chapter seven, all the the the main major bankruptcies.

There's only one other Chapter twelve, which is for farms for farmers. And there's not almost none of those are that.

So Chapter 13 is where you pay payments for five years and you pay, you can pay, you can pay a reduced amount on unsecured debt, like for not not student loans, but like a credit card. If you owe ten thousand dollars, you could do twenty percent of that. And so those payments would knock off two thousand dollars over that five years. And then there's. But you're in there for five years. You anything that is a secured debt, like a car payment, you have to pay the full payment.

Plus if you're behind, you got to pay something on the back of the car. Unsecured debt gets 100 percent of their money some time during that five years.

Or you have to give up the item so you don't get out of car payments by going into bankruptcy. You don't get out of house payments by going into bankruptcy. Student loans are not big.

Student loans are not bankruptcy. So anywhere you can control them and the IRS is not bankrupted on child support and alimony is not bankrupt yet. You can control it, though.

But it's not 15. It's your five years. Yeah. So if the IRS is coming at you for 100 grand and they're putting liens on everything, sometimes people step into a 13 to put that on payments because they weren't able to negotiate with the KGB. Gotcha. OK, so they use that tool sometimes to do that.

Now, the Chapter seven is the atom bomb. It's the scorched earth. After you drop that nothing's left. No dad has left anywhere except again, those that we just said that aren't being corruptible. Student loans, alimony, child support, IRS, they're not bankrupt, but everything else gets zero.

Now, again, if it is a secured item like a car or a boat, a house, whatever, you do not get to keep that in a Chapter seven unless you agree to make the payments.

So did you no good to file Chapter seven and keep your stupid car payment. Yep. And keep, you know, but and you have to catch up if you're behind in order to reaffirm resign for that debt in a Chapter seven.

Chapter 11 is for a super large personal bankruptcy, mainly used in business, though. And the plan in a Chapter 11 is you make up the plan, it's just drawn. You just you just get creative and you go, this is what we want to do. And we get the judge to approve it. Interesting. And if the judge approves it, then it's done. So, for instance, if a big retailer goes bankrupt because they've got a bunch of underperforming stores, they may take out of their 500 stores that they've got out there, they may take 350 of the bad stores and say all those leases, we just want rid of them.

We're going to have those landlords the keys back. We're going to shut all those stores down and these creditors over here, we're going to pay them pennies on the dollar and they just make up plan interesting. And then they get to survive with what's left and try to run the business. Yeah, and that's the Chapter 11. You can do that with a very large personal bankruptcy.

But but very few people file seven, unit seven, not 13. Scorched earth, scorched earth 13 does you no good most of the real estate. Yeah. And you're saying you can't keep because if you keep all the crap, you keep all the payments. There was no point in 13. Yeah. And that's why most of them fail. Plus you keep all the bad habits to put you there in the first place. Right. The beauty of Jonathan's story was he changed his habits.

Yes. And he got on top of it. He got the Ramsey stuff. He got don't use common sense. And he got on top of it and he got his income way up. So he started jacking on the thing, turned his whole life around. What a stud. It's a great story. This is The Dave Ramsey Show. At Takeover's, we believe a great pair of cowboy boots should be comfortable right out of the box so you can stand with confidence no matter what the day throws at you.

We believe in the enduring quality of handmade boots, and we believe that your hard earned dollars should go far. So we only sell direct to, you know, retail markups, no middlemen to deal with, just amazingly handsome cowboy boots for men and women. That won't just make you look taller. They'll make you feel taller to find your spirit. Takeover's dotcom, slash Ramsey and walk taller.

Going back to The Dave Ramsey Show, Rachel Cruze Ramsey personality is my co-host on the air today. Open phones, a triple eight eight two five five two two five. Manney is with us on the debt free stage right here at Ramsey Solutions. Hi, Manny. How are you? How are you doing? Dave, Dave, Rachel. I'm sorry. I know it's a good time, but I know that works for me. You did good.

It's all just like Angelina and Brad had. All right. All right. Thanks, man. Congrats. Thank you. Where do you live? I live in Fort Walton Beach, Florida.

Cool. Good to have you. Thanks for being here. How much did you pay off?

Well, Dave, I've paid off two hundred and ninety six thousand six hundred and fourteen dollars.

Holy moly. How long did this take? It took six years and 11 months. Wow. And your range of income during that time?

Well, Dave, when I got on your program, I was at 65000 and I ended I just recently got a promotion in the Air Force and I'm at 140000. My goodness gracious. Amazing. Thank you for your service. Thank you.

What kind of debt was the two hundred thirty seven thousand? Well, David, it was a little bit left on my car, a Honda Civic 2008 still driving it. And then I had 17000 student loans and then the rest was on my house.

You paid off your house? Yes, sir, I did. Look at it when people. I love it. How old are you? 31 years old.

And you're a paid for house in Fort Walton Beach? Yes, sir, I do. Oh, nice. Believable. What's the house worth?

I actually checked it before I came up here, and it's a 280 right now.

I love it. Oh, man, that is so cool. Yes. So tell us a story. What happened six years and 11 months ago, man?

Well, sir.

So I graduated from the University of Alabama Roll Tide Academy in the Air Force. And I came out of there, you know, with the 8000 left to pay on my car. And I had 17000 student loans. And as a brand new officer in the Air Force, I was doing like most people and eating out all the time and and just, you know, living paycheck to paycheck. It was right about 2013. My best friend, Kenny, who's here to support me, he mentioned your name.

And and actually on my first deployment, I bought your Total Guide to money. And ever since I read that book, I was on fire coming out of that deployment. And, you know, I got on the ball pretty quick. I paid off that 25000 dollar twenty five thousand dollars total on December the 31st, 2014, and into the final payment boom.

I bought my ahead. And six years later, the house was gone. Yes, sir. I bought the house in May of 2010, 2014. And, you know, I was paying a little bit in principle here and there extra. But it just when I looked at the amortization table because I'm a nerd, I just saw how little was going towards the principal and how much I was going towards interest. And, you know, I was chipping away at it.

But it wasn't until I heard it was a young lady about my age, about my income and twenty eighteen. She called in to pay off and she, you know, announced that she pay off her house.

Like, I can totally do that to me to the beginning of last year was one of my twenty nineteen goals that I was going to have my house paid off before I turned 32. And so I threw, I threw the kitchen sink at it, paid off a hundred 11000 dollars last year and the rest this year.

Absolutely amazing. Wow. You got it baby. I love it.

It's so fun. That's a lot of sacrifice. Yeah. I mean what that last year you did. So was it worth it. Absolutely.

So I don't owe a single dime to anyone whatsoever. Every single day I go in already love what I do. I mean I plan on doing the full twenty years in the Air Force and and maybe then some will see. But I don't have to worry about a single thing in the world. I mean anything I want to go. Do you travel. I can do it. Wow. It's amazing.

You are in great shape man. And you got yourself there. Well done. Thank you both for your teaching. Seriously, I've taught three FPU classes myself. I'm a coordinator down at Destiny Worship Center in Miramar, Florida. Oh, thank you. Yes, sir. And I just got and taking my family through it. They're watching right now and we're online. So it's it's been amazing. Both of you and the rest of the Ramsey team truly is impacting so many people right now.

And I can't thank you both and for.

Wow. Very well. You did it, Manny. You were the one. I mean, six years to it was phenomenal. OK, so why? Because we're on the same page. And so honestly, I'm like, you know, the the amount of sacrifice because it's so it's so weird. Right. Like people don't live like this. And so what had it been. Hard elements of it for sure. So what would you say was probably the hardest thing in this process.

I would really say so, you know, I'm single, not married, and, you know, I've tell my FPU class this, that when you're married and you have that accountability, it's amazing because accountability piece is so huge. But going out this as someone who is single, I really had to be very intentional with where my money was going. I celebrate the milestones along the way because it's a huge chunk and you can get burnt out depending on, you know, your level of just motivation.

So I set milestones and then I wrote down the goals. I mean, that was that was one of the largest piece of it to help keep me accountable. And then, of course, I had an amazing support team and my girlfriend, my best friend, his lovely wife, my family back home. So it's it's it's been amazing.

A lot of people cheering you on when you're tired. And it's like there's a beautiful blonde with you earlier with a cute hat. I was like, we are sheep. Yeah. I guess I love a girlfriend. Alex That's awesome. Oh, well, that's amazing, Manny. Absolutely. Absolutely incredible.

Thank you so much. Very fun. Very fun. All right. You're leading the FP class and they go, my coordinators.

Thirty one and his house is paid for and they look at you and go, how did you do that? What have I got to do if I want to be like Manny, what's the key to getting out of debt?

Well, in addition to writing down the goals, celebrating the milestones you touch on all time, contentment is one of the biggest things being content.

What you have really, really questioning anything that that that comes into your mind in terms of I want to purchase this or that. Is that a need or is that a want? In addition to that, sticking with the budget? I mean, really having a plan for every single dollar, I mean, every dollar app has been amazing in my personal budget. And then just being intentional, I mean, it comes down to really being intentional. I mean, I had people left and right, you know, buying brand new cars, you know, live in the fancy rich lifestyle, but really and truly that, you know, I had friends come to me and say, hey, I want to get on the plane that you've been on.

I've been living paycheck to paycheck. I'm like, you're the one that bought the brand new vehicle, like, you know, two months ago. Yeah. Where did that money come from? Yeah. Yeah.

So those are those are some of the biggest items that I would I would say to someone, you know, my age or just anyone doing the journey right now.

And I love it because it was it's a mix of the emotional side. Right. The contentment and asking like, why do I need this thing? I wanted to buy it. What am I really wanting it for? Right. Asking those kind of questions. But then the tactical side of actually budgeting, writing down goals, having that, I mean, like it's a perfect mix of everything. You have to go with it with both the head in the heart.

And I feel like you just did that so well. So very well done.

Great job, young man. So proud of you, hero. Thank you, sir. I love it. I love it.

This is so well done. So awesome. All right. It's official. Manny has paid off everything, his house and everything, and he's thirty one. Shut up. This is amazing. Two hundred and ninety seven thousand dollars paid off in six months or six years. Eleven months making sixty five to 140 counted down.

Let's hear a debt free scream. All right. Glory to God. Three to one. I'm dead.

If you want, that guy is the coordinator of your class. Yes, yeah, man, that's amazing, incredible, incredible sharp young guy.

Very funny, because I'm like, you know, this debt free scream the one last hour. I'm like, these people, they're not superheroes. They're people that just decide. They're just, you know, just I'm going to just make a plan and I'm going to do it and I'm going to do it. They're not superheroes are just heroes.

No, but, you know, like, anyone can do this. So anyone listening that thinks, oh, there's something you know, there's something about those people that I don't have. No, they just decided to. That was it. They decided to. And so it's it's a lot of work. It's hard work, a lot of sacrifice. But anyone out there listening can be that because 31 and no mortgage is coming out of college and went straight into it.

This is also so cool and so great that the somebody in our military is doing the things. Yeah, we've got the classes all through the military, all over the world. And pretty cool stuff. Very, very well done. Man, oh, man.

House is paid for three hundred thousand dollar house in Fort Walton Beach. No slouch. That's awesome. Love it. Love it. Love it. This is the Dave Ramsey Show. This is the Dave Ramsey Show, Common sense for your dollars and cents. Rachel Kroos Ramsey, personality number one, best selling author, is my co-host today. Well, we get it. 20/20 has left a lot of people feeling off balance, stressed out, discouraged. But it's time to take a deep breath and hit the reset button.

Do not wait to until January to do your reset.

You need to do it right now. Halloween's over. The election's over, sorta.

And you and the you know, I hope it is whatever it is, it's time for you to hit the reset button. Time to say never again. Time to get your money under control, trying to get your life under control. And all you've got to do is make a decision to begin a journey to a smarter life.

And we've got some help. The Smart Conference, when you watch the smart conference, when you're involved in the smart conference, you get smarter for your marriage, your money, your parenting, your career, your goals, setting anything about it.

We're going to be doing the smart conference. Usually we do it for eight to ten thousand people in an arena. There will be 200 people here on Saturday and there will be tens of thousands of you watching it as a live stream life. Dave Ramsey, Chris Hogan, Rachel Kroos, Kristi Wright, Anthony O'Neal, Ken Coleman, Dr. John Boloney, Dr. Les Parrot, Dr. Mac Maker. No matter what your goals are in life, it's all day long.

This thing's incredible. Yeah, it's such a fun events. I love this event because it's it's an all day commitment. But you're a whole day you're getting content about every part of your life. And it's it's such a great line up. It's so fun. It's just incredible stuff. Yeah.

And the neat thing about it being a live stream is we don't have to run a venue because you're sitting on your couch and it's twenty nine dollars. And if you are a Remzi plus member, thousands of Remzi plus members have already signed up because it's free. And so you can jump in, join Ramsey plus or you can just pay twenty nine dollars. Watch the watch the smart conference all day this coming Saturday, November the 7th. It is live.

This is not something we pretaped in and we're popping up. A lot of these things are you're seeing right now that are, quote, live streams are no more live than fly to the moon. This is live. I'll be live on the stage. Rachel will be live on the stage. We're going to be talking to you live. If we mess up, it'll be live. So it is this coming Saturday, November the 7th, all day long.

Check it out at Dave Ramsey dot com slash events. Again, it's only twenty nine dollars. Open phones at eight eight two five five two two five. Carl is with us. Carl is in Chattanooga. Hi, Carl. Welcome to The Dave Ramsey Show.

Hey, Dave. This is my wife here with me. We both longtime listeners. Thanks. I'm sixty seven and just retired. We don't have any debt and my wife's retired at sixty two a few years back and but some of her, she put her forward into self directed IRA and we now have several rental properties but she has three hundred K in that self directed. All right. We need to do something, we need to roll it somewhere and I have a one hundred and eighty in all three B and I don't know anything about annuity.

I don't like to just put it that way. I'm going to be talking with a financial adviser but I'd like to hear your thoughts. OK, well, I am not far behind you guys on age and the variable annuities that are out there, the vast majority of them that now are in and out there are OK.

The main thing that people do them for is for three reasons. One is they'll give you a guarantee on the principal. They'll give you a guarantee on the interest. If you leave it alone so many years, you'll get in other words, I promise you, you're going to make at least a five percent right of return. And if the market dives, you know, they're going to give you principal protection if you leave it alone like five to seven years, depending on the product.

The other thing you can do is you can name a beneficiary.

So it goes straight to someone instead of through your will or through probate. So much like a life insurance policy, it transfers outside of the estate. So those are the benefits. The downside is to get all that you pay an extra fee.

I consequently have not done any variable annuities. I just invest in mutual funds and I buy real estate. And so I'd put the 300 Dekay to work in the in the self directed in another piece of real estate if I were in your shoes. But it's also OK if you want to roll that into a traditional IRA, it's OK to move portions of it out of that shelf. Director, there's no harm in that. And you could roll your 403 B into a traditional IRA as well with a good smart Vesterbro.

Pick some good mutual funds and you'll do. Just fine with that money, that's what I would do, I wouldn't use an annuity, I don't see any reason for you to the only time an annuity might work is if you have maxed out all your retirement. But this is all already in retirement.

If you Max, if you've maxed it all out and you can't keep the government's hands off, the growth in the annuity is a tax deferred. Growth like a 401k or something is like a tradition. But you've already got tax deferral on this. So you're it's redundant, right?

Right. Well, we've got seven pieces of rental property now. In fact, we're living in one. And that's the other problem. We want to buy a house. We've got a hundred and fifty cash for the house. But that's not quite a house in our area right now. I didn't know whether to use some of that or my wife feels like we're bringing in enough money that we could put a mortgage on the house that I'm dreading and get a mortgage.

We prayed that I wouldn't do that.

I would cash out enough of one of the either the 403 B or the IRA and pay taxes on it and pay cash for the house. If I were you, you're in good shape. You've done a great job with your money.

What do you sell a rental property versus cashing it out? I'm asking I'm asking Dave a question on your behalf, Carl. I'm just asking what caused you what was why why go into the investments versus selling one of the properties? Real estate?

The rental properties are inside of the self directed IRA, so you can't do anything with them without paying taxes as well. If you cash anything out of that, the the IRA owns them. He doesn't. I gotcha. And so if you catch them out, the profits or the proceeds, either one would be taxable in that, just like if you cash out the the mutual funds, either one. If it were if they were real estate that was outside that that'd be a valid question because you could do that without taxes are largely without taxes.

You might have a little bit of capital gains or something. But, yeah, that's that's a good idea. But the fact that you've trapped it in that shelf, direct it so you have to operate the rental property. If you don't get any of the money, even you don't get the rents. The rents are all inside the IRA. And if anything, you pull out of that out of that shelf, direct the benefits of the real estate in any way.

Once you pull them out of that self directed IRA, since the IRA owns it, you pay taxes on whatever you take out. And so it's not tax free in that regard. But you had a lot of money that you got to buy debt free real estate with. And so that's why people use the self directed IRA to buy real estate sometimes. And that's not a bad plan at all. So very, very well done. Very cool.

Good job, man. Good job. It sounds like they've done a great job. Incredible. Yep.

Melisa's on Instagram. I'm in Financial Peace University. I saved up my first thousand dollars for baby step one. Where do I keep this money?

Baby, step one thousand dollars, I mean, just a traditional savings account, money market account is fine. The idea behind the emergency fund is you kind of look at it as insurance, if you will. It's not an investment. So you're not looking to make money off that thousand dollars or even once you get to three to six months of expenses. So putting it somewhere where you can get to it is really important. I mean, you could stick it in your sock drawer if you really wanted to, but just putting it in a traditional money market account, as is where we keep our three to six months of expenses, our emergency fund, the thousand dollars doesn't matter much.

The main thing is put it where you can't get to it too easy so you don't buy pizza with it and put it to where it's easy enough to get to that you can have an emergency.

Yeah. And so, like one lady was kind of funny. She went to Wal-Mart and got a picture frame and put it in the picture frame and wrote across the bottom of it in case of emergency break glass. And so you know why you have to think about getting the money out.

But if you keep it in your sock drawer, that's where the pizza man can get it, if you know. But now there's just apps for pizza.

And it's amazing that to you are not going to be without pizza.

We know this about not getting the Papa John's app is like pizza just shows up. It's kind of shows up just like that. You just push buttons. It's just like Amazon technology, the Amazon, a pizza. Twenty. Funny. I love it. I love it. Very cool.

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