Breaking down The Legacy Drawer

Dear Dave,
I've heard you talk about something you call The Legacy Drawer. What exactly is this, and what goes into it?
Lisa

Dear Lisa,
One of the best ways I know to tell your family how much you love them is by having your financial act together and organized in a central location. The Legacy Drawer is a collection of your essential financial documents in a safe place where they can find them when you die, or if you're sick or disabled.

All of the pieces of your financial life should be in this drawer. I'm talking about your will, living will, estate plan, investment statements, insurance policies, and property deeds. You should also include stuff like power of attorney statements, access information to lock boxes, and other instructions to family and loved ones.

Make sure it's really well-organized, too. It should be laid out simply enough that anyone who can read could open it up and find exactly what's needed in just a few minutes. The stress of having a loved one die or become seriously ill is bad enough. You don't want to make it any harder on them by leaving your finances in a mess!
- Dave

How much income do I put toward buying land?

Dear Dave,
My wife and I make about $85,000 a year. We're debt-free, and we have no kids. We'd like to start saving money to buy some land in the near future. What percentage of our savings should we put toward this?
Dennis

Dear Dennis,
I don't know if there's necessarily a specific percentage for this kind of thing. Since you guys are already debt-free you need to make sure that you've got a fully-funded emergency fund of three to six months of expenses in place, along with retirement funding. In your case, anything else you have sitting around after that is simply wealth.

If you've got $50,000 sitting in a savings account in addition to these things, and you'd rather have $50,000 worth of dirt instead of a bank account, I'm cool with that. It's really more a matter of ratios than percentages. Now, all this might change if you make $15,000 a year instead of $85,000 a year. I'm not going to put retirement on hold for 10 years to save up to buy dirt, either.

There needs to be a sensible balance, and you've got to make sure you have the important things covered first!
- Dave

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Balancing ambition and contentment

Dear Dave,
How do you balance ambition with contentment?
Fran

Dear Fran,
This is a really good question! To be honest, I don't believe they require balance. You thought ambition was the opposite of contentment, didn't you? I don't look at it that way. It's not like a teeter-totter. They don't have to balance out, because they're not on the same spectrum.

I'm content and ambitious. I'm content with what we have and what God has entrusted to us. On the other hand, I'm not content to sit around and do nothing just because we've been blessed. To me, that kind of attitude is not contentment, it's apathy. I do what I do because I'm passionate about helping people. You can have peace and contentment and at the same time be a real go-getter-the kind of person who still moves stuff around and makes things happen. They're not inconsistent concepts. I think problems are created when ambitious people are driven by a lack of contentment.

Let me ask you this: Do you think Jesus was content? Do you think He was ambitious? The answer to both questions is yes! You'd have to be pretty ambitious, I think, to take on the sins of the world. At the same time, do you know of anyone else who had more contentment than He did?

More than anything, I think it has to do with what's driving your ambition. If discontentment or a quest for "stuff" is the motivating factor, then maybe they are on the same spectrum. But I think that's a really bad way to live your life. You can get tons and tons of stuff, but no matter what you get or how much you get, you're still not going to really be happy until you find contentment!
-Dave

Debt freedom more important than marriage?

Dear Dave,
When does reaching the point of being debt-free become more important than marriage? We're following your plan and doing the debt snowball, but my husband's been working a second job, and it's really cutting into our together-time at night and straining our relationship. I'm afraid we're going to end up debt-free, but divorced. When does one outweigh the other?
Tracy

Dear Tracy,
When does one outweigh the other? Maybe when you stop whining?

Seriously, getting out of debt is never more important than your marriage. But families go through all kinds of stuff, and one of those things is cleaning up messes they've made. It's not always fun, but there's a price to pay if you want to win with your money or anything else.

It sounds to me like your husband has gone gazelle intense about getting out of debt, and in the process may have left you behind a little bit. I don't recommend that! He probably needs to take some time to come back and emotionally re-connect with you. And I'm sure some good, old-fashioned back rubs and words of encouragement from you are in order. Your man could use them if he's been working two jobs!

But there's plenty of time for snuggling and stuff later. Right now, you're trying to do something-something really important-for the good of your family. I know it can be difficult, but it won't last forever. And I can promise you this: Once you're done, you'll be very glad you toughed it out!
-Dave

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When I retired from Merrill Lynch in August of 2005, I was challenged by several people to write a book on Biblically Responsible Investing. After accepting the challenge, it dawned on me that I had never done this before and it was apparent that my learning curve took some time to process enthusiasm into content and structure. Over fifty interviews with theologians, pastors, and financial experts gave me the encouragement to press on with the project culminating in a manuscript of over 200 pages dedicated to teaching people about the value of applying Christian values and principles to one's investments. This all took place over a two year period from most of 2006 and 2007, at which time a very talented writer took my work and improved the approach to appeal to people from all walks of life. The final draft version Kingdom Gains was completed about August of 2008, and was offered to several publishers.

By September of last year, you may recall a meltdown was taking place in the financial markets and all of the publishers decided to pass on Kingdom Gains. The conclusion they have come to is that a book such as this has little appeal to the average Christian and that the only people who would find value in such a subject would be academics and advisors. In 2009 a similar response was given just a few weeks back after revisiting several publishers again for the second time. For the past several years, I would go on Amazon.com and search for books under the heading of "Biblically Responsible Investing" and either found no choices or for a while they suggested the latest Harry Potter book. So here is your chance to be part of a market survey! Please hit reply today and tell me what you think. Choose one of the listed responses or make up your own but I would like to hear from you about what you think.

A. The publishers are right, I would not buy a book on BRI or something describing how Christians should invest according to their faith and worldview unless I am a college professor or a financial advisor
B. The publishers are wrong, this is a subject that is long overdue to be discussed and debated by believers in all walks of their faith journey and is of interest to me
C. It depends on how boring the author has made the book! I might be interested if the price is right and the information is useful and interesting to read
D. Make up your own response and/or recommend a subject matter that would be of greater interest to you than BRI Read more

Prioritizing saving as an adult

Dear Dave,
I'm 20 years old, and I'm working my way through college. I've never been in debt, and I've already got a good emergency fund in place. But it seems like there are so many things to plan for down the road. How do you prioritize and manage saving for a better car, investing, marriage, kids and everything else in life? It all seems so overwhelming.
Eric

Dear Eric,
You've done a great job so far! I'm glad you're looking toward the future, too. You're right, it can be overwhelming if you look at all these things as if they have to be accomplished today. But here's the good news: You don't have to do everything right now. It's great to have a plan, but you're just 20 years old. You've got plenty of time to decide what's important to you and plan accordingly.

All the things you mentioned are great goals. But, in my mind, finishing college is your number one priority right now. Then, let's look at the other stuff. If you have a girl you're crazy about, marriage may be next on the list. If your car is about to roll over and die, the next step may be a better vehicle.

Don't be too intimidated, Eric. Things are often easier to deal with when you break them down into smaller components and address them individually. Nobody can do four or five things at once, and do them all to the best of their ability. Just decide what matters most, put it at the top, and list everything else in descending order of importance. Then just go down the list, and knock them out one after the other.

That's how you eat an elephant, Eric. One bite at a time!
- Dave

Using the emergency fund

Dear Dave,
My husband and I are debt-free, and we've got a fully funded, six-month emergency fund in place. The problem is that he lost his job last month. I'm still working part-time and bringing home $150 a week. But we're unsure if we should cut our budget down to bare bones or continue living like normal since we have so much saved?
Jennifer

Dear Jennifer,
You definitely want to live on as little as you can. This way, the money in your emergency fund will last longer. You may be bringing in $600 a month-and that's okay for a part-time job-but it's not nearly enough to run a household.

It's beans and rice time, girl. This means no vacations, no movies, no restaurants, and no $100 sneakers for the kids. In other words, no life until he finds another job and you guys are on your financial feet again. Keep the lights on and food in the pantry. Those are your priorities right now. I'd rather see you go into crunch time now without completely draining your emergency fund before he goes back to work.

This is the living, breathing definition of an emergency, Jennifer. Praise God you guys were smart enough to plan ahead. So yes, use it; but be wise. Spend only when it's absolutely necessary!
- Dave

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While recently in Brussels, we were just completing our visit to the Atomium and returning to the Grand Plaza for dinner when the sounds of Gershwin and American Country music were filling the air. It was to be our last day in Europe and we longed to be back in the good old USA but the music sounded like a hometown Fourth of July picnic. As we strolled thru the streets to find the source of this American celebration, we found all sorts of World War II military vehicles. What a great surprise to find all of this and hundreds of "our" soldiers just hanging out on the Grand Plaza!

We approached the soldiers as we looked inside the Army Jeeps, and officer's vehicles next to the tanks. All of them clearly had USA printed on them and the band of over a hundred musicians played on with song after song of familiar American tunes. We walked around in a rather stunned mode as we were not expecting such familiar sounds and sights in the capital of the European Union. We high fived the military men and women and finally I asked one of the Sergeants where he called home in the US? Oh we are not Americans he said, "We are Belgians just enjoying dressing up like Americans!" It was September 14, 2009, and fifty-nine years after the official D-Day of Belgium in World War II. This was a celebration of the liberation of Belgium from the Germans! The joy that still exists in many parts of the world because of the courage of American soldiers is the most muted sound in our land that takes freedom for granted. There was nothing muted however in Brussels on that day! Clearly, many Belgians still remember this day of deliverance and recognize the role America played in making that happen.

As I reflected on the Belgians who enjoyed dressing up like Americans, I wondered how many of us dress up like Americans and forget the privileges we have as citizens of this great country. This week, do something special and out of the ordinary when you see a man or woman wearing our county's uniform. Buy their lunch; shake their hand; salute them by saying thanks as you walk thru the airport but make sure you let them know that you are not an American dressed up in disguise.

John 15:12-13 (RSV) "This is my commandment, that you love one another as I have loved you. Greater love has no man than this, that a man lay down his life for his friends." Read more

Do I need pre-paid legal?

Dear Dave,
Do you have an opinion on whether or not pre-paid legal is a product worth purchasing?
Anika

Dear Anika,
I'm not mad about pre-paid legal. But a lot of folks who recommend and advocate it don't like me very much, because I tell people it's a bad idea. Here's why:  Pre-paid legal will cost you about $300 a year. If you take $300 a year, and multiply that out over 10 years, you're looking at $3,000. The truth is that the average American consumer doesn't spend $3,000 on legal bills in this amount of time.

Lots of people will tell you that you miss out on tons of opportunities by not having a lawyer ready to jump into things. That's a bunch of garbage! Once in a great while you may need the services of an attorney, but think about this: If the average person spent $3,000 or more over the course of 10 years on legal bills, while pre-paid legal took $3,000 from each of these people, pre-paid legal would go broke, wouldn't it? They'd be handing out more in legal services than they receive in fees!

On average, you'll come out better if you self-insure by having a good emergency fund in place. That way, you'll have the money to pay for legal services should the need arise. And part of the reason you'll have the money in place is because you didn't give it to someone else-like pre-paid legal!
- Dave

Obtaining the deed

Dear Dave,
We live in Missouri, and we just paid off our mortgage in July. Do we have to contact the mortgage company to get the deed?
Karen

Dear Karen,
It can vary depending on where you live, but I believe Missouri is a Deed of Trust and note state. The deed of trust is the lien against your house, and the mortgage company is supposed to file a release at the courthouse for that Deed of Trust. Next, they should send you a copy, but it's not unusual for things like this to take three or four months.

They'll also send you the original note you signed at closing. This should have "paid in full" stamped or written across it in big, bold letters. That note becomes your property. If they didn't signify that the deal is done, you should write "paid in full" on the front yourself, and keep it in a very safe file forever. The original note is the documentation that you owed money, and the Deed of Trust contains the lien against your house. Typically, they will also send you a copy of the release of lien on the Deed of Trust.

Just understand that most mortgage companies move slowly. But don't be afraid to start rattling a few cages if Christmas rolls around and you still haven't heard from these guys!
- Dave

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What term level should I buy?

Dear Dave,
My husband and I are both 37 years old, and we have two children, ages six and four. We follow your plan and we'll be debt-free, except for our house, by next May. How should we determine whether to get 20-year or 30-year level term life insurance plans?
Valerie

Dear Valerie,
Based on your current situation, I think a 20-year policy would work out fine. However, if you're planning on having more kids, you might want to look into a 30-year plan. Let's take a closer look at your situation.

Twenty years from now, your kids will be 26 years old and 24 years old. Hypothetically, they both should have finished college by that time and be grown and living on their own. If you continue to follow my plan, you should also have paid off your home and be completely debt-free, and you will have been saving 15 percent of your income per year over those twenty years. That alone, on average, will give you more than a half-million dollars for retirement.

Do you see where I'm going? Eventually, you become self-insured by getting out of debt, staying out of debt, and piling up cash. It's that simple! So, if you've got $500,000 or more in your retirement fund, no debt, and your children are grown and out of the house, even if you or your husband were to die at that point, the other would still be in great shape financially!
-Dave

When do I close the cards?

Dear Dave,
Do you recommend paying off credit card balances before or after you close the accounts?
Anonymous

Dear Anonymous,
Either way is fine. The point is to get rid of them, and stop using the stupid things! I like the idea and the finality of going ahead and closing the accounts, but doing that will sometimes spur credit card companies to do dumb, unfair things-like jack up the interest rates.

You're on the right track, though. Personal finance is 80 percent behavior, and getting credit cards and credit card debt out of your life is a great first step in learning to behave with your money. You don't build wealth or save money by using credit cards, and you're naïve if you think you're going to play around with a multi-billion-dollar industry and beat them at their own game. The only way to win against credit card companies is by refusing to play!
-Dave

Dave's start in financial counseling

Dear Dave,
In the beginning, how did you go about establishing yourself as a financial counselor that people could trust? Did you initially offer free counseling to help build a reputation?
Anonymous

Dear Anonymous,
I never worried about whether or not people could trust me. I think knowledge helped offset reputation (or lack of one, back then), and I knew in my heart that I was an honest guy who had the ability to help people with their money.

I began doing financial counseling free of charge as a ministry at my church, but I have a degree in finance, and I had bought and sold more than 1,000 foreclosures at that point. That taught me a lot about the business and the bankruptcy side of things. And experiencing them for myself when I went broke gave me a unique perspective into what happens in those situations.

But it's probably safe to say that people trust me more now than when I first started. There definitely wasn't a line of people backed up around the block to see me in those days!
-Dave

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This is a word to Christian leaders, particularly for leaders of leaders. These are tumultuous times. Things are being shaken that have never been shaken and there is a spirit of fatigue and even fear loose in our land and in the Church. There is no longer any security in things that had been thought to be secure and as I travel and speak to believers across the country I hear a cry for relief and a return for "the way things were." My brothers and sisters we are in danger of missing the point. These circumstances are no surprise to God and He's not going to give us a quick-fix return to prosperity and an ever-upward always improving life. In fact we grieve Him when we fail to realize that we have in fact been born for" just such a time as this." God planned for you and I to be His ambassadors in just these days before He made the earth. Rather than whining and crying for "the good old days we need to be rejoicing in the privilege of His call to these days and looking to Him for all we need to do all He wants, We are to be light in the darkness, and if we aren't , who will be? Should we be looking at the world for courage and confidence in the face of uncertainty? Nonsense! We are the containers of the only true "Hope of the world."

And what kind of leaders should we be and do those looking to us deserve? Should we be trembling and quaking with the world, fearful that our 401Ks will shrink further or that we may lack all we really need to care for our families, begging God for relief? No indeed, we have been called by the Almighty and Sovereign God of the Universe to represent Him here and now. We are called to be leaders that instill hope and confidence and even joy in the midst of turmoil. We need to be filled with faith like that of Daniel when he faced the lion's den and like Shadrach, Meshach, and Abednego when they faced the fire. God ordained and called them to the tests they faced and He has called and ordained us to ours. God is not surprised by the economic shaking we see, He knew it was coming and He knows what comes next, and He has called us to lead leaders In these times not out of them! Its gut check time leaders, time for us to show the world what we really believe. The circumstances of life don't make us what we are, they reveal what we are! Stand up! "Be strong and courageous...." Double down on your quiet time, focus on building intimacy with God, repent of the troubling sin, get help if you need it, but press on and press in! There will never be a better time for us to lead or a more critical need for us to be the leaders that God has called us to be.

There was a fourth man walking with the three in the fire. He was "like unto the Son of Man." He was there for them, He is here for us, but He won't be found by the fearful or those hoping for a compromised comfort of a return to Egypt. He walks with the faithful and the fearless. May it one day be said of us that we were among those who did not love their lives unto death. Lead leaders, lead! Lead!

Many of you have been asking how we did in our basketball games while on mission to France. Our official record was 5 wins and 1 loss, but one of our games was not counted in this statistic because it was officially called a scrimmage. For many years, our guide and spiritual leader from France, Gerard Lanniee had prayed about the possibility of an American team of Christian players coming to France and competing at the very highest level of competition. After racking up two lopsided wins, we ventured to one of the most prestigious teams in all of France, Paris Levellois_Perret. Levellois (pronounced, Leva Lu ah) is the team that Tony Parker played for when he was drafted by the Spurs and they are loaded with many talented players.

Coach Jean Marc Dupraz became a believer many years ago when his American teammate, Michael Young of Houston shared the Gospel with him. Today, Jean Marc is one of the most respected coaches among all of the French National teams. Gerard's dream was coming true and as the scrimmage began, the bigger, younger French team took command. Our own Michael (Watson in this case) hit two big threes back to back just before the end of the first 15 minutes and it was obvious that our team could hold its own against this formidable group of players from Paris. After, 30 minutes of play, our team was leading by two points and filled with confidence. At the 40 minute mark we were behind by a basket and looked forward to a final 10 minute period. Coach Dupraz felt his team had gotten in their intended workout and called the competition right there.

Gerard was in tears of joy that he had finally seen this event take place and our players not only faired well from a competitive standpoint, but when we invited all of their coaches and team to pray with us, every member of their team joined us. Long after the last whistle had blown, there were still players standing around talking about both basketball and their faith in Jesus Christ. Coach Dupraz was surprised at how competitive our players were and also how open and refreshing it was to see them share their faith with his players. There are not a lot of openly Christian athletes in France. In fact, there are not a lot of openly Christian witnesses in all walks of life in France. For the 18 members of Levellois's team, they have seen an example of how you don't need to be ashamed to share your faith in public. Will you pray for this team and for all of those believers who need our encouragement to be more open about their faith? Read more

Collecting receivables

Dear Dave,
My dad died earlier this year, and as a result my mom and I inherited his auto parts business. He had a lot of accounts receivable piled up, and we need to collect these to keep the business going. We live in a small town, where everyone knows each other. What's the best way to handle this?
Susan

Dear Susan,
I'm so sorry for your loss. It's never easy when a parent or spouse passes away. I'm glad that you and your mom are working together, though. Hopefully, it has helped you two make it through this rough time.

I would make a list of the accounts, and go visit them all personally. Just have a polite, sit-down conversation, where you explain your situation, and ask for their help in getting things current. See if they can take care of the bill today. If not, ask in a nice way if they can pay some of it today, and try to find out when they can pay the remainder.

Make sure you don't hire an outside person to handle this situation. You and your mom can work the phones and pound the pavement. Most of these accounts are probably local folks, and there's a good chance some friends and neighbors are in the bunch. You don't want to be confrontational or unkind, because you will need these people if the business is going to survive.

At the same time, you need to stop running so many accounts receivable going forward. It's a real pain having those things hanging over your head, and at some point it will become tough just to make a living. Otherwise, if you can't clear this up and get the business running on a cash basis, you may have to close up shop!
- Dave

Pay extra on debt with a separate check?

Dear Dave,
When paying extra on a car note or mortgage payment is it a good idea to write a separate check?
Scotty

Dear Scotty,
Absolutely! You can include the extra check in a separate envelope with the regular payment, but make sure you write "principle only" in big, bold letters on the envelope and on the check. Also, include the account number in the notation line at the bottom of the check.

Some companies use payment booklets that have a box specifically for entering any amount you want applied directly to the principle. This method is okay, too. Just make sure you keep a good, solid record of the monthly and overall amount you've designated to be applied only to the principle.

Trust me, follow these guidelines and you'll be much less likely to run into a sticky situation because some bozo threw the check into an escrow account or chalked it up as a pre-paid payment!
- Dave

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Many of us had just known each other for two days and we wound up a busy training camp by going to Lansing (Kansas) Correctional Facility to play against their team. One of our leaders, Brad Mann, who heads up the ministry known as "Livin-the-Dream" had played with his teams there before. Eight check points later and we are in the LCF gymnasium with 20 players on the prison team and 80 to 100 inmates who were watching in the stands. Our team started slowly and we were tied at halftime. One of our players, Alden, had missed training camp as he was taking four courses and was close to completing his degree requirements. All of our players assured me that Alden had game and I should not worry. In the first half however, Al looked lost out there but he assured me also that he would get his bearings.

In the second half we started to pull away on the scoreboard and Al returned to the lineup. He looked better but when he got the ball on our next possession, he started dribbling from the side of the court deep down the baseline behind the basket. He then started to jump into the air and I thought he was in no man's land and would have to throw a desperation pass to avoid a turnover. As I was wondering what Al would do, his elevation kept rising like the sun coming up in the morning. Somehow, he kept going higher and higher until being more than a foot above the rim, he slammed home a dunk that is still ringing in my ear. The entire gymnasium stood in awe and cheered one of the best plays I have seen in years. I knew our team had talent by this time!

That was not the greatest thing that happened that night. After the game, we were allowed to share our faith and one of our players asked if he could take that honor. As Michael started to talk, it was clear that the inmates were all listening. When he told them that he could just as easily be the one sitting in their chairs, they listened intently. When he told them that his brother in fact had sat in those very chairs for several years they listened even more intently. When he told them that knowing Jesus Christ in his life had made all the difference, they also received an even greater gift than seeing Al's dunk. The truth of the Gospel will always bring perspective. How thrilled we were to shake the hands of all of those men, many of whom came from the maximum security portion of the facility, and tell them that Jesus has a plan for their lives. Now I knew we had some courageous Christian men who were willing to stand up for the Lord! Read more

Know when to leave

Dear Dave,
I'm 25 years old and have served in the military for seven years. I'm not sure I like what I'm doing as much as I did a few years ago, plus I've had some pretty exciting opportunities come my way in another field. Do you think it would be worth it to stay in for another 13 years just to get full retirement benefits?
Wayne

Dear Wayne,
It's really simple. If you love it, stay in. If you don't love it, get out. Serving in the armed forces is voluntary in this country. In a sense, that makes it a lot like other jobs. Thirteen years is a long time to hold your nose and walk through a briar patch. If you're not excited anymore by what you're doing, then it's time to find another line of work.

There are people who absolutely love the military. It makes a great career for some folks, and I think that's awesome. God bless them for serving their country that way. But whether you're in the military or a civilian, I think you should do what you love. If you were just a few months away from retirement, I might tell you to ride this thing out. But hanging around for years in a job you don't like just to collect benefits is not a good plan!
- Dave

Taking stock in an emergency

Dear Dave,
I like your idea of having an emergency fund. Currently, I have $17,000 in General Mills stock. Can I use this as my emergency fund?
Anonymous

Dear Anonymous,
No, no, no! Stocks are long-term investments. The one and only purpose of an emergency fund is to have cash on hand in the event of an emergency. It is not an investment, and it's not designed to replace income. An emergency fund is there to cover unexpected expenses that result from life's unexpected events. Wow, just think if you had used General Motors stock as your emergency fund. Your entire life would be one big emergency right now!

I don't have a problem with General Mills, but if you want to call it an emergency fund, you need to cash out your $17,000 and park it in a good, easily accessible money market account with check-writing privileges. It's absolutely essential that you keep your emergency fund liquid and easy to reach. You wouldn't keep your umbrella locked in a safe in the trunk of your car, so why create a situation where it's a pain to access the money in your emergency fund?
- Dave

* For more financial help please visit daveramsey.com. Read more

More about France next week but some compelling stories are developing about ballot issues in Ohio that also speak to why it is important for investors to be serious about their holdings. The annual gathering of the American Roundtable highlighted many issues that reverberate with people who believe the Constitution still has a place in our decision making. A case in point is the battle over Issue # 3 in Ohio about casino gambling.

The people trying to defy 4 previous Ohio ballot issues denouncing casino gambling have indicated that there will be considerable revenue for Ohio since they believe there will be $700,000,000 in profits. What they do NOT include in that number is the amount of losses that their clients will sustain so that they can achieve that goal. Would you believe $2,100,000,000? That's 2.1 billion that will not be spent for food, clothing, or other goods or services. What a deal! If you don't mind losing a couple of billion, we can make 700 million in profits and look at the tax revenue!

Does your mutual fund or money manager have investments for you in the gaming industry? If you like this equation, trusting that it is smart business to invest in a business that counts on people losing three times as much as you will make in profits, then you may have checked your conscience at the door of the investment manager. I would guess you have also not considered the Biblical overtones of this relationship. As for me and my house, we will not be a partner with the gambling and gaming industry! Responsible investors would do well to check into their mutual funds and portfolio managers to see if they own companies that are counter to their faith. Read more

Invest above the requirement?

Dear Dave,
I'm a teacher, and the school system I work for puts 13.5 percent of my pay into a public teacher retirement fund. They also match this amount. I've read about your rule of investing 15 percent of your income toward retirement, so should I invest 1.5 percent into another retirement fund in order to max out my savings at 15 percent of my income? What do you think about the idea of opening another retirement account at a full 15 percent of what I make?
Patrick

Dear Patrick,
It sounds like you've got a pretty good pension plan through your school system. I can't help but wonder, though, what would happen to the money if the system were to take a big financial hit. I'm not predicting bad things, but the truth is that you just never know what might happen. In other words, there's no way I'd lean on this fund as my one and only source of retirement income. Never put all of your financial eggs in one basket!

I wouldn't go as far as to pour an additional 15 percent into a different retirement plan, but I'd definitely look at putting seven to 10 percent into a Roth IRA. I want you to have some money that's separate from the school system account just in case things go south with their retirement fund. If you're married, and your wife works and generates income, she needs to be putting 15 percent into a plan, also. You can never have too much money during retirement!
-Dave

Intellectual behavior and will

Dear Dave,
You talk a lot about delaying gratification in order to attain what you really want. This is such a difficult thing to do. What techniques do you use to make this happen?
Anonymous

Dear Anonymous,
You're right, it is hard. Sometimes it's very difficult to push away from that second piece of pie or get up off your tail and exercise. But learning to delay pleasure is part of the process when it comes to growing up emotionally.

I think when you've practiced it long enough your mind begins to grasp the concept that what's waiting down the road is much better than whatever happens to be sitting in front of you at the moment. I didn't want to get up and run this morning, but I know that I look and feel better when I do my roadwork. That's why I made myself get out of bed early and run three miles.

The whole process has to start in the brain, and drop from there to the heart, where it promotes understanding and mature actions. So really, it's an intellectual behavior that affects will. You have to logically and intellectually grasp the concept, then think about where you're going and where you'll end up as a result of your actions!
-Dave

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France is a unique place in the entire world as far as the secular emphasis of their society. We found this to be both a problem and an advantage in our work there with our basketball team. The problem is that you are constantly trying to make sure that the witness you leave behind is a positive one and that your actions help the workers who are left behind to follow-up on your efforts after you return to the USA. The advantage is that once you find something that works, it is so different from the status quo that people are interested and drawn to your ideas and witness.

Our team was able to share their witness at a prison near Valence where we organized a three on three tournament with a makeshift basket and our team members leading each team. We also offered Bibles to those who were interested in having one. There were six inmates who defied serious peer pressure and asked us if they could have a Bible. During a break in the action, one of the men named, Ahmad, asked me if I could help him to understand the Bible we had given him. He told me in his broken English that he had never seen or read this book before. I told him that my favorite book was Jean (John) and directed him to the 14th chapter trusting that when he returned to his cell that he would allow the Holy Spirit to teach him the truth of the scripture. We turned and marked the page as many eyes were following us from cells overlooking the commons where we sat together. This passage came to mind as I always love the book of John, and a recent sermon by Pastor Ken Whitten of Idlewild Church in Tampa impressed me as the way to help my new friend discover that Jesus is the way, the truth and the life.

This all took place as one of his fellow inmates tried to convince him to give the Bible back to me and not to read it. He did not listen to that man and asked me again why he should read it. I told Ahmad that I believed it to be the truth and was inspired by God for his benefit. He thanked me and the team for coming to spend the morning with him and others and especially for bringing him this new book. What a privilege for us to be able to share this day with these inmates who need Christ. He promised me he would read this book for himself and find out what it has to say. Will you help me pray for all of the men and women of Valence prison who are seeking answers in their lives? Read more

Recover first, plan later

Dear Dave,
My husband died four weeks ago. He was 52 years old and had a heart attack. We always lived on a budget and were careful with our money, so we were debt-free when he passed away. He had a 401(k) and an IRA worth about $500,000 along with $200,000 in life insurance. He always handled most of the money, so I don't know what to do about all this.
Nancy

Dear Nancy,
I am so sorry you have to go through this. Fifty-two is way too young an age at which to leave this world. I'm sure the suddenness of it all has your head spinning, too. Right now, you need to take some time to absorb what's happened. You've experienced a devastating loss, and you should never make major life decisions when you're hurting or your emotions are out of whack.

For now, I want you to roll the 401(k) and IRA into IRAs in your name. Then, just let them sit there. I'd also park the insurance money in a Certificate of Deposit for about six months. Take out enough to live on, but leave the rest alone for a while. Give yourself some space and time to cry until your brain gets used to things and can plug back into everyday life again. Then, after some time has passed, you can start thinking about what you want to do in the years ahead. You can also educate yourself in finance and how to handle your money once your mind has had some time to readjust.

Don't try to be super woman right now. I know you miss him a lot, but always remember that he loved you enough to make sure you'd be in great shape financially if something like this happened. God bless you, Nancy.
-Dave

Automobile pricing guide

Dear Dave,
What is the difference between NADA, Kelley Blue Book, and Edmunds.com? Is one more accurate than the others, and how would you use them in negotiating the sale or purchase of a car?
Anonymous

Dear Anonymous,
NADA stands for National Automobile Dealers Association. A lot of their information is based on loan value, which basically is nothing more than what a banker wants to lend on a particular vehicle. Plus, it seems to me that overall NADA is oriented more toward the dealer than the consumer. KBB and Edmunds are both pretty fair in terms of real world value, but you have to gather up pieces of information in order to get an accurate assessment.

I always look at the KBB private sale section when I buy or sell. Then, I'll print out the information and use it during the negotiation. You could also shop other car sites online and find out what they're asking for the same kind of vehicle. If you gather up several reference points of information you'll begin to see a pattern evolve, and you'll end up with a pretty good idea of fair market value.

Let's say one site lists a car at $12,000, and another says $13,000. You could turn around and honestly tell a buyer that you're offering a really good deal at $10,000. You could also toss out the high-end prices and the lowball numbers to come up with a good middle-ground figure that's fair to both parties!
-Dave

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Showing mercy

Dear Dave,
I have tenants who have been perfect in paying rent on time for almost a year. Last month, the woman lost her job, and when I went to collect the rent the other day, she said she didn't have any money. I'm pretty sure they used part of it for a car payment and the electric bill, and I know they need these things. Still, I'm torn over how to handle this and how much mercy to show.
Alex

Dear Alex,
You're right, what they spent the money on were things they needed. At the same time, they probably knew the rent was due and when it was due. Since you know about their situation, and you're their landlord, it might be a good idea to offer to try and formulate a plan that would help them get through this tough time.

If it were me, I'd sit down with them and make a budget and list of priorities. Food comes first, water and lights after that, then rent, and finally the car. Get into their business a little, and find out what else is going on in their lives. You have to be fair and firm to be a quality landlord. I'm all about helping people who need help, so I'd be willing to cut them some slack if they're cooperative and literally have to choose between feeding their kids and paying me. But if they insist on misbehaving with their money or having parties on the weekend, I'd have no problem telling them to check out and find another place to live.

The biggest thing is to treat them the way you would want to be treated if the roles were reversed. I think most people want to do what's right, but you want to feel good about extending mercy when, and if, it's appropriate.
- Dave

At what age do I need a living will?

Dear Dave,
My husband and I have been married for three years. I'm 25 and he's 29. We have no children yet, but we're trying to put our financial lives in order. At what age do you recommend getting a living will?
Denise

Dear Denise,
Every adult needs a last will and testament and a living will. They are not the same thing. A traditional will contains instructions for the disposal of your estate. In other words, it tells who gets what after you die.

A living will is sometimes called "the Terri Schiavo document." If you end up in a situation where you are unable to speak for yourself, such as a coma or a vegetative state, a living will dictates whether or not you want doctors to keep you alive using artificial means. This is not the kind of decision you want left to a doctor, family members, or a court!
- Dave

* For more great financial advice please visit daveramsey.com.

What's included?

Dear Dave,
I've heard you say that your mortgage payment shouldn't be more than 25 percent of your take-home pay. Does this figure include taxes and insurance, or just principal and interest?
Anonymous

Dear Anonymous,
That figure includes taxes and insurance. Just remember, the whole idea is to make sure your house payment is manageable. You don't want to have so much money going toward your mortgage every month that you can't enjoy life or take care of your other financial responsibilities.

I figured out a long time ago that I've got more money when I don't have debt. It's a pretty simple formula, isn't it? If you want to build wealth, you have to get out of the payment business. I don't beat people up for getting a 15-year, fixed-rate mortgage, but you don't want all of your income going toward your house payment, either. If half of what you make every month goes straight to the bank, you'll have less money for other stuff. Plus, after a while that great house will stop looking so great. It'll be a chain around your neck instead of a place you love to call home.

Don't try to figure out how much debt you can get into. Instead, figure out how much debt you can get out of!
-Dave

Missing out

Dear Dave,
I've only got a high school education, and I'm stuck in a dead-end job. I've always been a hard worker, so the 70-hour weeks don't bother me. However, I do miss getting to spend time with my kids. I feel like I'm missing out on their lives. Do you have any advice on how to change my situation?
Scott

Dear Scott,
I think you've already solved a lot of the problem by realizing that you're like a mouse stuck in a wheel. You know you're not getting anywhere, and you're ready for things to change. Identifying the problem is a huge step in solving the problem.

Now, mechanically and logistically, how do you make the change when you're handcuffed to a job that works you 70 hours a week? You've got a family to feed, so you can't just quit your job. But you can talk to your boss, and see if the company will back down on your hours a little bit. Let them know what's happening with your family, and that you'd like to take some classes and improve yourself and your value in the workplace.

But before you do any of that, you've got to have a definite direction in mind. The idea of making more money and working less isn't the answer. You need an in-depth, detailed game plan for where you want to be in the next three to five years and how to get there. It may involve going back to school for some classes, or even getting a full-blown degree. If you identify your long-term goal in detail, it will lead you to some of the short-term goals that will help you arrive at your final destination.

The best book I've ever read on this kind of thing is 48 Days to the Work You Love by Dan Miller. He's my all-time favorite career coach. He'll lay out the steps to discovering what it is you really love to do and how to get there.

God bless you, Scott!
-Dave

* Don't miss Dave Ramsey's Total Money Makeover LIVE! event - simulcasting at host locations throughout the country on September 19 from Atlanta. For more information visit www.daveramsey.com. Read more

Ready to buy?

Dear Dave,
I graduated from college in May, and I already have a job in my field. It was a part-time position that went full time, so I already have $15,000 in an IRA and about $23,000 in savings. I'm also debt-free, because scholarships paid for my education. Am I ready to buy a house?
Zack

Dear Zack,
You are the man! This is an awesome position you're in right now!

Financially, you're okay to buy a house. I do have one slight hesitation, though. There are going to be lots and lots of things happening in your world during the next few years, and there's a possibility you'll end up moving-maybe for a girl, or even another job-during this time period. It's going to be a time of transition, and having a piece of real estate tied around your neck could be a huge pain. But if you're sure that's where you want to be for a while, then it's not such a big deal.

Keep in mind that there's a word for real estate that sells quickly, and that word is cheap! Lots of times, the only way to get out from under something like that fast is to practically give it away. It's a great time now to buy a home, though. It's like they're on sale. Interest rates are low, too.

Don't use the entire $23,000 as a down payment on a place, and keep an emergency fund of three to six months of expenses set aside. Make sure you get a 15-year, fixed-rate mortgage, too. If you play this right, Zack, you're going to be sitting pretty!
-Dave

No experience, apply anyway?

Dear Dave,
Do you think it's a good idea to apply for a job if you have a degree in the proper field, but no real work experience in that area?
Denise

Dear Denise,
Absolutely! Does this mean you'll get the job? No, but I can promise you one thing: The only sure-fire way to make sure you miss out on a job is by not applying for the position in the first place.

Line up all the interviews you can for jobs for which you have a reasonable chance of being hired. Then, go in there with your head held high, and impress them with how articulate you are and how you carry yourself. Use your style, intelligence, education, and confidence to sell yourself and your ability to jump in, learn quickly, and get the job done!

I've met lots of people who say they have 20 years of experience, but it's really more like one year of experience 20 times. That kind of "experience" is useless. I've also met lots of sharp people without experience, but you can tell they're the kind who will put their minds to work, think outside the box, and figure out a way to get things done. As an employer, if I've got a choice between the two, that's the one I want to bring onto my team!
-Dave

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The sport that Americans spend time watching and playing in virtual computer games is back for a new season. Fall is a unique time of year in the Midwest and especially in Ohio, as the sport of football dominates the schedules for many families. The image of football coaches stalking the sidelines and masterminding offensive and defensive schemes brings the names of many icons to mind. In fact, the tougher the exterior and the meaner the look of a coach is often associated with greater success. Demanding standards for performance on the field is non-negotiable!

Bill Glass (Cleveland Browns Circle of Honor Defensive lineman for those who don't remember him) taught me a lesson at an important time in my development as a father. Bill has a ministry that reaches into prisons and continues to make an incredible difference in the lives of inmates. He compared the difference between those fathers who had invested in their children's lives by granting them their blessing and encouragement with those who found all fault and were disparaging in their attitude toward them.

If you want to put on your game face for the new football season, I would encourage you to look at the people in your life who crave for your blessing. It doesn't take much to be an encourager and a cheerleader compared to being a cold stone tough guy. Who is in need of your blessing today? Find them, call them, go up to them and tell them how blessed you are to know them and to see them do well. It just may be a comment that will last a lifetime for them! Read more