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[00:00:23]

Live from the headquarters of Ramsey Solutions, broadcasting from the car rental studios. It's the Dave Ramsey Show where debt is dumb. Cash is king and the pay it all home mortgage has taken the place of the BMW as the status symbol of the choice. My co-host on the air today on The Dave Ramsey Show, Prasow, Gordon Ramsay, personality number one bestselling author. And we are here to take your calls. The phone number eight eight two five five two two five.

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We'll talk about your life and your money. Triple eight eight two five five two two five. Gail is in Jacksonville, Florida. Hi, Gail.

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Your question for Chris to me, my question is with me and my husband are both on disability. I'm 56 and he's 58. We have all of our debt paid off and we have an income of about six thousand, almost six thousand a month. I want to know if I can invest. I don't know, with being on disability would prevent me from investing.

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It does not prevent you from investing. It does prevent you from doing an IRA, which requires earned income, quote unquote. Do you have any income that comes in outside of disability income?

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I have my pension, which is fifteen hundred a month and I have thirty thousand dollars in the bank.

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OK, now then you'd have to have income from doing something that create, you know, a wage earner income or self-employed income or something like that. So income off of investments or income off of disability does not allow you to do an IRA.

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However, there's anything keep you from investing. I mean, you just put money in a mutual fund. Hmm. OK, so that's what I want to know.

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I want to contact the milk. And I wanted to make sure that I was able to take that thirty grand while 20 grand a month, ten grand for an emergency fund and 20 grand and start my investment. The mutual fund industry. Yeah.

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So you are debt free right now. Yeah, we own our home. Our cars are both white owned.

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Everything that is fantastic. Now as you look at this, remember, take a look at your your smart dollar budget and understand three to six months of that. You want to keep that in an emergency fund, then you could look at investing the rest. So don't shortchange yourself right now, especially in these times, Dave, we're having that emergency fund. People have woke up and they're hearing it different now. Yeah, it's gone from a suggestion to now.

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People realize this is necessary in order to have some calm in your life.

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Now, if you have a six thousand on our month income, I'm not sure 10000 is enough. No, it's just saying you may want to top that a little bit. So look at your household expenses times three or six, and that's probably going to run you, you know, up to fifteen anyway at minimum. Yeah. And get with what? Click Smart Vestre at Dave Ramsey dot com. It'll drop down a little thing you fill out and then it'll drop down a list of the smart VESTER pros in your area to sit down with and they can help you get some investing going.

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And the only difference is the only difference in IRA in mutual funds or mutual or Roth IRA mutual funds is how the taxes off of the growth are treated.

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And so what you're going to want to look for, Gail, is what's called a low turnover mutual fund.

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And what that means is the stocks inside of the mutual funds don't turn over. They don't sell them very often. It's a buy hold strategy. And so there's hardly any taxes on it until you cash it out. Much like if you buy a share of stock for fifty dollars and it goes up to seventy dollars, you don't pay taxes on that twenty dollar increase until you sell it. Or if you buy a rental house for one hundred thousand dollars and it goes up to 150000 dollars, you don't pay taxes on that fifty thousand dollars until you sell it.

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And so it has the same effect mathematically as tax deferred growth like a traditional IRA does in that regard.

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So you're looking for low turnover, mutual fund.

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If you remember the fancy term for that. You remember in school they told us it's called a realized game.

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Exactly. Yeah. You realize more recognize. Yes, absolutely. Upon the sale of that item.

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Now you realize it when it goes up, you recognize it for tax purposes when you sell it. And so it's not it's not recognized for taxes until it sells because it's just an increase in value. It's a capital gain is what it is. And an easy way to find a low turnover mutual fund is just the S&P 500 funds.

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Most of those index funds have very low turnover ratios, and I'll use some of those to stock money and sometimes just park some money in. If I'm saving up for a piece of real estate or something, it can sit there. Lots of stats are more than one year. Whatever it goes up is only taxed at capital gains rate, which is, of course, less than ordinary income rate. So if I park X number of dollars in one of those and it cranks out for a year and I make, you know, good return on it, I don't pay as much taxes on that good return because it's a capital gains rather than ordinary income.

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Something you point out, too, that remember, when you invest, you're looking at doing that for five years or more, anything else you're saving for? And so that three year window, it totally works.

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Yeah, absolutely. So she she's going to be great. You're going to be fine. You're just not going to get the tax free growth that the Roth IRA has, right.

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If you don't if you and it's not a pre-tax investment that you're doing, it's an after tax investment.

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Why wouldn't the pension qualify? Because that's not earned income. It's not earned investment income doesn't qualify. Right. So if you're sitting there and you've got five hundred thousand dollars, you make a 50 grand off of that a year. That's that doesn't qualify you. That's not earned income. It's investment income.

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From an Irish standpoint, from a truck could still open up growth stock, mutual funds, always open up investments. There's nothing that ever prohibits you from opening up an investment.

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But the you have to have earned income, which is wage earner income or self-employed. And very simply, one of those two things. So you either get in a W2 or you're out there, you know, moving some money around. Now, here's the thing. If somebody in jail situation without messing up her disability and depending on the limitations by the physical disability, if she could go earn just a little bit like 6000 a year, you know, there's a little side job of some kind without messing up something, report that our taxes, obviously, and then that is earned income and that's enough to fund your Roth IRA.

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And that could look like babysitting. Yeah, I mean, waitressing, bookkeeping.

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I mean, there's a lot of options out there. It wouldn't require a lot to earn the six thousand six thousand no people to fund the Roth IRA. That's not a bad way to go at all. Well, we've gone through tough times.

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Chris talked about it. I went from a suggestion having an emergency fund to where now you understand it's like table stakes, man. If you just want to play, you got to be at the table. You got to get this done. And you might be struggling for different kind of table stakes. You might be trying to put food on the table. John Maxwell says change is inevitable. Growth is optional. So when you have a moment like this, like covid has done to a lot of people where it smacked you around financially, I got smacked around financially because of my own stupidity back in my 20s.

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Then you have to have a never again moment. If, say, never again am I going to be in debt. Never again am I going to have an emergency fund. Never again am I going to be living without a budget. And if you want to get rid of this being haunted by your financial stuff, we can help you. We just launched something new. It's huge. It's changed the trajectory of lives already.

[00:07:49]

It's called Ramsay. Plus, this is the all access membership that gives you access to all of our best money products. There are three sections you learn in Ramsay.

[00:08:00]

Plus, with all the nine lessons from Financial Peace University and the proven plan you budget with all the premium features on every dollar, you track your progress with the new Baby Steps app and you can get a free trial to Ramsey plus right now. So if you're looking around going I don't ever want to be like this again, I never want to be in this situation again. Never again. Well, we can help you text free or here to get your free trial text trial.

[00:08:31]

The thirty three 789. That's trial two three three seven eight nine. This is the Dave Ramsey Show. Check out this headline courtesy of Politico, Dotcom emergency relief screw up hits five million student loan borrowers, nearly five million student loan borrowers who got a break on their monthly payments from Congress have been hit with incorrect information on their credit reports. That's what happens when you just sit around and trust the government to take care of your money issues. Refinance your student loans today to take advantage of the historically low rates Splash is offering.

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Go to splash financial dotcom Ramzi. Chris Shogan Ramsey personality is my co-host today on the Dave Ramsey Show, Open Phones, a triple eight eight two five five two two five. That's Triple eight eight two five five two two five.

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Our Question of the day comes from Blind's Dotcom. Find out for yourself why Blind's Dotcom is the number one online retailer of custom window coverings. You get free samples, free shipping, and with the new promos they run every month, you'll save even more. Always use the magic word, the promo code. Ramsey Chrissa question. All right.

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This question comes from Casey, Missouri. She says on Dave Ramsey Dotcom, our six year old daughter has just got her first job. Should we have taxes withheld for her? She'll make less than the standard deduction so she won't owe any taxes. The reason I ask is I want to contribute to a Roth IRA for her now that she's employed. And I believe she has to file taxes in order to do so in order to file taxes. Does she have to have taxes taken out?

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Oh, well, in this day and age, Dave, with Social Security and Medicare, I'm going to say you want to file taxes? Oh, definitely. You want to make sure you have that withheld. You don't want that headache and that nightmare.

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Well, there shouldn't be. She's right, though. There won't be any taxes due. Right. There will be some payroll taxes and some other things to come out. So have the minimum withheld because you don't want to, but you don't want to wait on a big refund to come back. But you do want to file a tax return, right, in order to do the Roth, because that's what we're talking about with Gail in the last section, is that that's gives you the ability then to do the Roth IRA.

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And so if for you guys that are in baby steps seven, you're working on changing your family tree, this is this is something I did with the Ramsey kids when they were in their teens. Every year they worked and I filed a tax return on every penny, every possible penny up to the max on a Roth IRA that they would make.

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So up to six thousand dollars, I made sure every bit of income, whether it was at a place where they were withholding or whether cutting grass or babysitting or working for us, selling books on the back table or seminar, which they did.

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And so I'd file a tax return on as much as I could justify morally and accurately.

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And then that gave me the ability, not with their money, but with my money to fund them a Roth IRA. And so, I mean, if you start fund and sometimes Roth IRA, when they're 16, 15 years old, do that for five, six years before they get into college.

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And even if they're working a job through college, do the same thing all the way through college, then there they that alone could make them a millionaire.

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That's exactly right. I mean, because that kind of compound growth happening at such a young age is a great option. Now, Dave, do you have to be self-employed? You are self-employed. No, you don't have to. All you got to just have the money, which means you need baby step seven. Right. You don't need be doing that kind of stuff and not having your house paid off, you know, to be doing that kind of stuff and not having your own retirement underway.

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And where you the custodian of the account. Yes. OK, you have to be until you're 21. That's right. So put a mutual fund in a miner's name. And so as a parent, you retain control of this money. And so it's good just to be aware that you can jump started. It can be in their name, but you are the custodian has to be in their name because it's an IRA.

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Right. But you're the custodian because a mutual fund will not open an account for somebody under 21. Austin is not on that line. Austin is on that line in Cincinnati. Hi, Austin. How are you? Hey, Dave and Chris. Are you a great man? How can we help that?

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So I've been listen to you for about a year now and I say off about 20000 so far. I'm actually currently working on my car, paying that off. I ran into my first issue. I took it to the dealership and they were able to they said they were able to temporarily fix the issue, I guess is something to do with the computer. And my question is, should I sell this car and take what equity in it now or do I ride it out and take the chance of the computer going out?

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Was the dealership trying to sell you a new car? I don't think so.

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It's it's only worth about five thousand.

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So they weren't suggesting you upgrade with them? No, they didn't say that, no.

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OK, OK, listen, have you had an issue with this car before? No, no.

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It's been good so far. And you've had it. How long. It just hit 100000 miles. OK, I forgot to mention this. I drive about five hundred miles for work every week. So that's my concern is that the missiles are going to start really getting out there and my issues are going to come up. Yeah, well, I mean, what kind of car is it? It's a Chrysler 2015, Chrysler 200. OK, well, here's the thing.

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What I would do is do a little bit of research. I don't know much about that particular car and see if the computer programs, its problems with the computer are ongoing. And if you've got something that's going to blink out on you and you want to sell it and buy a car of equal or lesser value in order to keep getting the job done. Sure.

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If the and of course, the other thing you could do is get a mechanic that's not at a dealership to look at it because sometimes a dealership, not all of them, but some of them have been known to say, oh, this thing is a bum car.

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You need to walk right out here, son, and I'll show you another one. I mean, yeah, they'll try to upgrade you. That's why I was asking about that. Doesn't sound like that's what happened here. All your troubles behind you just get to know. Here's the reality, too. I'm with you. I would sell this thing, get something reliable that you can put these miles on less or more, not more money.

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Right.

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And then budget and set aside that dollar amount. That was one of the things that was a game changer for me. Dave, when I got plugged in on the envelope system, was starting to make a car payment to myself, saving up to be able to pay cash for a car. You sell the one you got, take your cash and you go get something new to you.

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And that's where it is when you start paying a car payment to yourself and you're looking at I'm saving up to buy something. You make you pay, you put more in the account. Yeah, you do. You don't end up going three hundred twenty three dollars and thirty six cents. You go I think about five hundred a month in there, you know, and you start chunking a lot more in there because you know, five hundred a month for ten months that's 5000 bucks.

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I can move up pretty much. Yeah. If that, that's a nice chunk up. But you, you're independent mechanics out there. There's tons of really, really good ones and just have somebody else look at it. Give you a second opinion. The most expensive place to work on a car is at the dealership. From a repair standpoint, they make more money per square foot. If you read National Auto Dealers Association's literature, the per square foot at the dealership that was there rent the most money they make per square foot is the finance office.

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When they sell you something on paper and they sell that paper to the bank, they make more on that than that is thinking car. And the second area they make the most money on is in the shop.

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It was department service arm. Yeah.

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And then all those acres and acres and acres of cars out there, they don't make that much money on. They sell in order to get you on payments and get you in the shop.

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Hmm. Where the money comes from, get the hooks into you. Follow the money. So I'm not mad at car dealers. A lot of my buddies are car dealers and I'm not afraid of you to buy a brand new car once you got a net worth of a million dollars. That's all fine. And I drive really nice vehicles and I take them to a dealership. But that's a highly unusual situation. So most of the time when I've been driving cars growing, you know, throughout my life and I'm sixty years old is I take them to a good independent mechanic and those guys will give you a good give you a good rundown on what's going on.

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So get a second opinion, then decide, do a little research, then decide if you want to sell it. Don't go into debt to move up and use this situation as rationalization.

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Yes.

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To do that and especially let me talk to especially single moms out there. I think they get preyed on the most talking about you want a safe vehicle for you and your children and this and that. And I'm telling you, don't fall for that. You know, be aware that. Keep your hand on your purse. Find a good mechanic throughout your church or in your community that can look over your car and shoot you straight about what's wrong and the cost of repairs.

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Don't ever hesitate to get a second opinion.

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What happens to all of us is when your car breaks down, two things activate. You get pissed off. Yep. And there's a sense of insecurity. I'm stuck. I can't get where, you know, fear. I can't get where I need to go. So it's cold weather or I'm out in the middle of no stinking hot air and I'm vulnerable. It doesn't matter who you are. Yeah. And you've got this hassle, this inconvenience and those emotions caused people to do some of the dumbest things financially ever.

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They'll be stuck out there on a five thousand dollar car and then go finance a twenty thousand dollars car on impulse because they get so angry or so afraid over the hassle factor and the sense of vulnerability of the car breaking down. Fix the car.

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Yeah, all cars break. There are no cars that don't break. Some of them break glass because they're newer. You know better, Bill, I get that. But all cars break there are reliable. I can't drive a used car. How have you been driving in six months. What do you call that used? That's what you call it. This is the Dave Ramsey Show. People all over the country are discovering a faith based and budget friendly way of meeting health care costs through Christian healthcare ministries, Christian health care ministries, or CHF, is a nonprofit organization that helps members carry one another's burdens with health care expenses.

[00:19:39]

And they have successfully shared each other's medical bills for nearly 40 years. CFC is right for you by visiting S.H. Ministries. Doug S.H. is a proud sponsor of Dave Ramsey Live Events.

[00:20:07]

Chris Hogan Ramsey personality, is my co-host today on the Dave Ramsey Show, Open Phones, a triple eight eight two five five two two five. He, along with the other Ramsey network personalities Ken Coleman, Rachel Crooge, Christy Wright, Anthony O'Neal, Dr. John Delany are now publishing a thing called the we are now publishing a thing called the Ramsey Call of the Day. It could be an inspirational story and knocking off that, it could be tips on how to deal with loss of income.

[00:20:35]

It could be career decisions. It could be anything that Ramsey personalities talk about. And the Ramsey call of the day will give you the life changing content you need. But under 10 minutes.

[00:20:45]

So you can subscribe on Spotify, Apple podcasts, Ramsey Network app or on your smart speaker by just saying Play Ramsey Call of the Day podcast. So the Ramsey Call of the Day is a new podcast we're putting out at the Ramsey network. And have you done any of these yet?

[00:21:03]

I have not, Dave, but I'm glad we're not letting you do it, OK, because you would hold all the space you need to learn to share. Ramsey Space Hall, you are a space hog and all the calls people would be just calling you all the time. You need to let us have some time to do some things. So, yes, you're not.

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And notice, my name is not on the front of it. We Rodley, we voted.

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We voted. I got voted off the island. I voted no personality.

[00:21:30]

I haven't done it yet, but I'm looking forward to it. Cool. Because we have a good group. You all I'm telling you, it is it is a unique opportunity to be a Ramsey personality. But the quality of people that we have with John Deloney, with Rachel, Cristie Anthony, Kim Coleman, it is Kristi. It's just fun. And so being able to plug in and do this with all those guys and gals, it's going to be a lot of fun.

[00:21:53]

All right.

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Julie is with us in Ann Arbor, Michigan. Hi, Julie. Welcome to The Dave Ramsey Show. Hi, Julie. Julie, did I push that wrong? I got it right, didn't I? Are you there, Julie?

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Apparently, Julie went for a walk.

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All right, Julie, I'll put you back on. Hope she's gone now, OK? That's how that works. So that's what happens.

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Leigh, I was with us in Atlanta. Hi, Leo. How are you? Hi, Dad. How are you doing? Better than I deserve. How can I help?

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Hey, Dave, I have a good problem being free, and I will see if you can kind of help me out on it, right. Twenty nine years old, have everything paid for, including my house, thanks to listen to your show. And everything is about 500000 dollars in our house while you and I have a business that I was able to pay everything off with, with all this Korona stuff going on. I'm very on the edge meeting with clients and I kind of want to go meet with clients because sometimes I feel like I don't need to expose myself, but I feel like I know this is going to end and a business to continue.

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And I just want to get your help kind of get me out of that mindset or your thoughts. What kind of clients do you have?

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I work in a landscaping business on the landscape business. And when the clients meet with the clients, the first thing that come approach me and I just get really ERGEG and kind of, you know, get near me and are, you know, not. OK, and so how old are you? Twenty nine. So you're a healthy 29 year old. Yes, OK, I would suggest you turn off your television. The fear porn has gotten you, it has.

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Yeah, and, you know, I don't know, I'm 60. I did the math. It's like a point 0001 one percent less than one percent chance I'm going to die from this. And so I if you all hug my neck, I'll hug you.

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If you're if you're scared and maybe you got somebody in your family and you want to wear a mask, that's fine, too. I'm good with that. If you want to shake my hand, I shake your hand. I'll go wash my hands. But that's what I did anyway, back when it was flu.

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So, I mean, but, you know, lots of people have lots of opinions about this. So I would be more concerned not about your health personally. I mean, you you got to decide, but I think you probably need to get some different inputs as my opinion. And you ask my opinion, which is dangerous. I'm an expert on that.

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But I think you get some different inputs on what the actual facts are, because there are people that their fear is based as if this is a as if you get it, you're going to die. And the death rate is so very low on this that that that, again, if you're if you've got an illness or you've got a susceptibility, I would never want anybody to be harmed. And certainly you would respect your customers.

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What they want to do. There's 100 people sitting outside the lobby or fifty people or whatever it is. And on the side in the lobby, some are wearing masks. They're my friends. Some of them aren't wearing masks. They're my friends. Some of them that didn't come because they were scared. They're my friends.

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That's right. So I respect you wherever you are, and you can do whatever you want to do with that stuff. But then but I think what you're describing is more of what's happening inside your head. And I think you just got to study some of the other information that's out there, because one of the things we have discovered through this whole thing is they don't teach math in med school. These people, the models and the stuff are just they're ludicrous and the data points on this thing is just it just silly?

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Well, you can you can honestly in the news, they find whatever it is you want to believe. Yeah, that's true. You truly can. And I think in Leo's situation, I'm going to let the customer determine that meaning as I contact them. And if he's obviously as a landscaper, then he said he gets a free customer. All right. I know, but but like you said, that psychological you just got to stop with that and just say, you know, you just stop it.

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You're a great counselor. You just stop because what you're doing is you're psyching yourself out. And that's called a self-fulfilling prophecy.

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It is. But but you know what your masters is what you believe is causing that. Right.

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And so you've got to decide if you truly believe you're going to become ill and die as a result of that than a normal human being would be shocked out. Oh, big time normal. I mean, that would be normal.

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No one no one that has good sense would walk into another human's presence if you thought as a result of that you were going to die. And so what's happening is, as I was being sarcastic, but not really turn off the TV news.

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Because it's fear porn is where it is. People are addicted to fear when they're addicted to porn and they're just feed me more fear, feed me more fear, feed me more fear, run my anxiety up, run my anxiety up, make me think the world is coming to an end and they can they can put it out there.

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Yeah, that's a it's a terrible way to live. And I really would I would talk to someone I really, you know, for yourself individually, but be honest about what is it you're scared of and what are your probabilities.

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Right. Because right. Actually, statistically, you're probably more at risk when you drove over there on the highway. Actually, if you actually look at the Amazon, I mean, it's not car wrecks are different than viruses.

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I understand I'm not a flat earth or shut up, but my God, but I mean, it's statistically, you know, we always use the thing, actual statistics, actual probability of statistics.

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When you're buying a lotto ticket, if you walk one mile to the market and one mile home, you are statistically more likely to be struck by lightning twice than by the lotto ticket that wins. Hmm. But in spite of that, people buy a lotto ticket. Why not? Because of the actual math and facts. Because anybody that looks at that goes the chances of me being struck by lightning twice on my walk over there and back is like so infinitesimal.

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But so is your chance of winning the lotto doofus, you know? And so in his case, you know, you look at your risk and you look at what the death rate of a healthy 29 year old is now in your state, the death rate that could you get the equivalent of the flu.

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We've had eight or 10 people here at the office have had it.

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And as one was really ill and the rest of them minium didn't.

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Mroz, they had it. And then all the testing issues come into play there. So you need to get information that you feel comfortable with and act on that in. Is your fear logical? John always says Dr. John always says facts are your friends. And so when I'm analyzing something like this, I'm not I'm not taking a poll.

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I'm not worried about social pressure. You can kiss my butt. I'm going to do what I want to do. I don't care about what you think about me. I'm way past that a long time ago. If you're offended. I'm sorry, but I'm not really sorry and sorry. Not sorry, you know, but what I do want to know is I really do want to know what the actual facts are and my bringing harm to someone or someone going to bring harm to me.

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Those are the only facts I'm really worried about. What are the real numbers?

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And when you look at the actual map, then it might help you with that fear. It's a good call. If it doesn't, then you may need to do something different until you get it straightened out on that. This is the Dave Ramsey Show. My co-host today on The Dave Ramsey Show, Ramsey personality, Kris Hogan, the voice of retirement and millionaires, pretty good. I like that. I might change that around. All right, John John with us in Detroit.

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Hey, John.

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How are you, Mr. Ramsey? Thanks for taking my call, sir. Sure. What's up? Well, I got a question for you due to a combination of many different things. My wife and I found ourselves in about one hundred and forty thousand dollars in debt. We owe approximately 140000 on our house. And I know we could turn around and sell it today for about three hundred, maybe a little bit more than that. My question to you is, would that be a smart move to sell the home, pay off of our pay off our debt and where we would be debt free and possibly rent for a year, where we would be able to save up?

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We probably would be able to save up about as much money that we have in equity right now over the course of the next year.

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Why don't you just pay off the debt over the course of next year?

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Yeah, that's I'm trying. That's kind of what I've been juggling. I, I.

[00:31:08]

So what is your household income?

[00:31:12]

Well, between the two of us, I would say right now it's about ten thousand dollars. Now it varies due to my job some sometimes I tend to ten thousand dollars a month which is one hundred twenty thousand dollars a year.

[00:31:25]

So you're going to pay taxes on 120 twenty next year.

[00:31:31]

Yes.

[00:31:32]

And you're not going to pay off 140000 in one year then. Or save 140000 in one year either.

[00:31:38]

We're only made 120, that's mathematically impossible, right, right. No, I understand that.

[00:31:44]

What were the unfortunate events, John, that caused you to take on 140000 in debt? About six years ago, I started a business, made some very stupid decisions that I've learned from. I tried selling the business over to my partner a few years back. He ran the business down. And in the process, I was stuck with about 65000 in loans that I had personally financed for the business. And I went to work for him during that time and I didn't get paid in about thirty five thousand dollars worth of work.

[00:32:23]

And before I went back to work for them, after I sold the business, I had an emergency back surgery where I was off work for 11 months with no income. OK, so IRA, very quickly.

[00:32:34]

So no wonder you like your house. We do like our house and we love the number two.

[00:32:40]

Let's sit down with 120000 dollar income and say, how fast could you pay off? One hundred and forty. My guess is the quickest would be about two years. I'd be 70000 out of 120, leaving you 50 to live on. OK, that sounds about right. Well, right now we're paying out about sixty eight hundred dollars a month in debt.

[00:33:03]

OK, but listen to me. If you make one hundred and twenty thousand, you live on 50. That leaves 70, 70 a year for two years is 140. Right.

[00:33:15]

And that includes what you're paying out in debt and so forth, that if you move, you don't have a house payment, you have rent. It would be about the same as your house payment, wouldn't it?

[00:33:26]

Correct. Yeah, so there's no gain in your cash flow by moving except paying off these debts really quickly. And so if you like your house, unless you hate your house, I would fight and live on beans and rice for two years and pay off your debts by living on a very tight budget. Otherwise, you have to look at your wife and say these stupid but business decisions I made that caused us to lose our home.

[00:33:49]

Right, and you will continue to hear that for years. No, no, potentially. But here here's the other thing, John, that concerns me.

[00:34:01]

I want you to revisit what caused you to get there, because I've had people that have sold the house and cleaned up the mess only to repeat the mess because it was the habit that caused them to get into that situation. So psychologically, I think you can stay in this house. I think you guys can get serious on paying this off. But you're going to have to make these sacrifices and they're not going to come easy to you right now. Have to sell the house as the quick fix.

[00:34:27]

That might not be the best overall fix for you and your family. Yeah, I agree.

[00:34:32]

The one thing that helps me make these kinds of decisions with folks or myself, for that matter, John, is I asked myself 10 years from today which of which of these was the best decision financially? Was it keeping the home and fighting my way through the debt or was it selling the home, getting rid of the debt and then using that the fact that the debt has gone to pile up some cash in another house, typically keeping the home or lead you to a bigger pile of money than moving all the costs involved at all.

[00:34:59]

Another potential screw up because you make a mistake on a real estate deal, you have a real mistake.

[00:35:05]

Tiffany is with us. Tiffany's in Seattle. Hi, Tiffany. How are you?

[00:35:10]

Hey, Chris. Hey, babe. How are you? Great. How can we help you? So my husband and I are having a hard time getting through the 50 percent for retirement. And so my husband, his company let them put up to eighteen thousand dollars a year in there. And then I saw myself the work. They take 12 percent of my income and but we still don't get to the 50 percent because we make about 250000 dollars a year.

[00:35:43]

And so we are wondering if my husband is not very comfortable putting money in the stock market. And I don't know why he he doesn't want to do a Roth IRA because he feels he is connected to the market. And what's happening?

[00:35:56]

What's he putting his 401k in? Well, that's the thing. For one key is connected in that he feels that that is enough and he's putting 18 technically eighteen thousand dollars in there a year. Mm hmm.

[00:36:10]

And now you can put 18000 in, but if you put 26000 and all of a sudden the market's a bad idea. It's completely a loss. Exactly. I completely agree.

[00:36:22]

But he does not he doesn't feel comfortable putting money in. And so I'm thinking that maybe he doesn't want to do that. Can we buy investment property instead? And capital? We're still investing that money, but it's not through the market, which I'd still be OK. No, because your Decision-Making skills are broken. OK? And if you can't make good, solid, critical thinking skill decisions on your investing, you're going to use the same broken system to buy real estate with.

[00:36:56]

And I mean, so what point does real estate become risky?

[00:37:00]

Past 500000 past a million are just short of 10 million, whereas real estate risky.

[00:37:06]

And so, you know, you have to be able to look at things logically and work your way through them.

[00:37:12]

So, no, I think you need I think you guys need to talk this through and and figure out what it is that makes 26000. By the way, you can do 19000 this year, not just 18000 is Max. But at what point does it become risky putting in 19000 versus putting in 25000?

[00:37:33]

And I'm going to tell you this. You know, just a reminder, Tiffany, you know, for us, if you go to invest in real estate, we're talking about you're doing 100 percent down money. Right? And so the money that you've got to have money to be able to do that. So he's got something going on. And I think talking about it and figuring it out, the goal is, again, to you all to have enough money to be able to live your dreams later.

[00:37:57]

And so I would talk about those high definition dreams all over again, about what it is you all want to do, the charities you want to give to, the things you want to go do as a family and then try to reengineer, reverse engineer that and look to see does this get you closer to where it is you want to be?

[00:38:13]

You know, as far as the market goes, what helps me a lot with investing in stock market and mutual funds is to understand and know the history. So sit down with the smart Vesterbro and let them look and show. Let them walk you through, like with this mutual fund that's 80 years old. Here's what has happened. When the market did this, the market did that. Here's what happened in 2008. Here's what happened when in 1957, when the Russians launched Sputnik and the stock market went down, they beat us into space.

[00:38:40]

Right. So the stock market went down. There's all these little events in history, global events that caused the stock market to go down. And there's other events caused it to go up. And so you can look at that.

[00:38:50]

And the more you understand, OK, here was the actual mathematical variants, not the emotions, but here was the mathematical variance.

[00:38:57]

And here's exactly what really occurred.

[00:39:01]

And the more you understand that, the more you're really analyzing the risk then and then if he's not comfortable, then it would be logical only to not put any money in.

[00:39:13]

That would be the thing. And if you can say that and then I OK, I hate the stock market. I only want to do real estate. OK, I can go with that. But say about 18000 is is all the risk I can stand.

[00:39:26]

But 25000, isn't that right. When I make 250 or flawed math they flatly illogical. So this is the Dave Ramsey Show.

[00:39:40]

Hey, it's Kelly, associate producer and phone screener for The Dave Ramsey Show. This episode is over. But if you heard about an event, product or service, it didn't have a chance to write it down. Don't worry. We lost everything you've heard about during this episode in the podcast show notes section or head over to Dave Ramsey dot com and click. Dave recommends. Thanks for listening.

[00:39:57]

Money isn't the only thing we talk about around here. Get life changing advice on your career from my good friend and career expert Ken Coleman. Oh, my Ken Coleman show. According to a recent Gallup poll, nearly 70 percent of Americans are disengaged at work. If you dread going into work every Monday morning and you're just trying to make it to the weekend, the Ken Coleman show is for you. Everyone has a sweet spot. Your sweet spot is at the intersection of your greatest talent and greatest passion.

[00:40:27]

We will help you discover what it is you were born to do, and then we'll help you create a plan to make your dream job a reality. You matter and you have what it takes. Join the conversation on the Ken Coleman show. Hear more from the Ramsey network, including the Ken Coleman Show. Wherever you listen to podcast.

[00:40:47]

Hey, it's James, producer of The Dave Ramsey Show. This episode is over, but check the episode notes for links to products and services you've heard about during this episode. Thanks for listening.