May 13, 2014 • Page 2 shop online at www.missourivalleyshopper.com Dave Says Don’t Dump 401(k) To Pay Debt When old Ben died recently, the town was saddened, but probably not for the usual reasons. Ben had been widowed for nearly 20 years and had lived alone in the house where he and Judith had raised their boy, John. He’d had a lot of health problems, there at the last, too. Things weren’t easy for him. Sometimes when a guy is in that shape, people nod and smile slightly at his passing and say, “Well, in a way it’s a blessing, isn’t it.” But not with old Ben. There’s the sailboat, you see. After Judith died – and Judith was the most practical woman in town – Ben started buying and reading magazines about sailboats. Then he cut the front off the 1020 barn/garage out in back, and began building one. He drew crowds with his work for a while. Everyone stopped by from time to time, and we all know it is to be 32 feet long and a gaff-rigged – not Marconi-rigged – sloop. Said they look more like real sailboats. Eccentric? Well, maybe. Eccentricities last a year or two, but a 20-year project is a lot closer to being an obsession. When Ben could afford more of the special wood he was using, he bought it. Sometimes all he’d get were some of those little brass whatchits to put along the side. But each time something came, there was work going on out in that garage. Ben took pride in the project being pay-as-you-go, so he wouldn’t owe anybody when Food - Beverage 1020 Homegrown Chicken Fryers, $6.25. Maxwell Colony Call for appointment to meet in Yankton. (605)660-0997. PrairieSun Organic meat store went virtual. Visit us at www.prairiesunorganic.com. Or Call (605)624-1966. Need dirt work, tree removal, excavating? 605-638-0897 1405 East Highway 50 • Vermillion Brought to you by the new CD “Having Fun in New Mexico,” Fifteen stories by Slim Randles. www.slimrandles.com. Food - Beverage 1200 Please Recycle When Done Reading! rent the equipment to get the job done or hire us to do the work for you! he finally put it in the ocean. Ben died before that happened, and that saddened us greatly. We might chuckle a bit behind his back, but we also secretly envied him and admired him for building that boat. After Ben passed, his son John brought his wife and children to live in the little house. After a few weeks, we heard activity out in the garage, and we found John working on his dad’s boat. It would, he said, eventually sail. There is no statute of limitations on dreams. -------------- Cars 1966 Oldsmobile Cutlass 2-door, 60,000 miles, all original. Call (605)660-0060. Dear Dave, I'm 23, transitioning jobs, and I make $32,000 a year. I have $11,000 in a 401(k), and about $15,000 in debt. Should I cash out the 401(k) to pay down my debt? — Cody Dear Cody, I don't think so. When you take money out of a 401(k) they charge you a 10 percent penalty, plus your tax rate. Your tax rate is about 20 percent, so that means you're going to take a 30 percent hit. While I love dumping debt, your idea would be kind of like saying, "I want to borrow $11,000 at 30 percent interest to pay off my debt." That doesn't make a lot of sense, does it? I never tell folks to cash out a 401(k) or IRA to pay off debt, unless it's the only way to avoid foreclosure or bankruptcy. You're not facing either one of those situations, Cody. So my answer is no. — Dave YOU CAN DO IT WITH NO FEES 2003 6 cyl. Dodge Caravan Sport, dual climate, remote start, seats 7, 24 mpg highway, 130,000 plus miles, $4,000. 402-649-3100. Dear Dave, What do you think about making bi-weekly mortgage payments? — Jeremiah Buying junk cars, pickups, Dear Jeremiah, vans, running or not. Instant I think it's an awesome quote & free pickup. idea. By doing that, you can McLean Auto Salvage. pay off a 30-year mortgage in (402)360-0756 about 22.8 years, on average, CARS/TRUCKS WANTED! depending on the interest Top $$$$$ PAID! Running or rate. However, I would never pay someone a fee to set up bi-weekly mortgage payments. All you do on a biweekly schedule is make half a payment every two weeks. Since Dave there are 26 two-week periods per year, that equals 13 whole payments. It's nothing magical, and it's not difficult. Go for it, Jeremiah. Get rid of that house payment as fast as you can. Just don't pay extra fees to make it happen! — Dave RAMSEY MOVE TO THE HEAD OF THE LINE! Dear Dave, I owe the IRS $6,000, and currently I'm making monthly payments. Should I roll this debt into my debt snowball, and then really attack it when it gets to the top of the list? — Jared Dear Jared, My advice would be to put the IRS at the very top of your debt snowball. Usually, when it comes to paying off debt, I advise people to arrange their debt snowball from smallest to largest, then start with the smallest one and work their way up. Not, All Years, Makes, Models. Free Towing! We're Local! 7 Days/Week. Call Toll Free: 1-888-416-2330 nani * Dave Ramsey is America's trusted voice on money and business. He has authored four New York Times best-selling books: Financial Peace, More Than Enough, The Total Money Makeover and EntreLeadership. His newest book, written with his daughter Rachel Cruze, is titled Smart Money Smart Kids. It was released April 22nd. The Dave Ramsey Show is heard by more than 8 million listeners each week on more than 500 radio stations. Follow Dave on Twitter at @DaveRamsey and on the web at daveramsey.com. 1200 www.missourivalleyshopper.com and save now with rebates up to $2300 26th plus ask about our Bonus Discount EARLY DEADLINES for May 27th Issues Broadcaster Press HEATING & COOLING 920 Broadway, Yankton • 665-9461 • 1-800-491-9461 This doesn't always seem to make mathematical sense, but the truth is personal finance is 80 percent behavior and only 20 percent head knowledge. Paying off some small debts quickly energizes you and gives you motivation. It makes you feel like you can really do it. Besides, if you were such a math genius you wouldn't have debt in the first place. But the IRS is a different animal altogether. Their interest rates and penalties are ridiculously high. Plus, they have virtually unlimited power to collect. So put them at the top of the list, and get them paid off as fast as you can! — Dave Deadline: Noon Thursday, May 22 Deadline: 11am Thursday, May 22 Regular deadlines the week before & after Cars CASH FOR CARS: Any Make, Model or Year. We Pay MORE! Running or Not Sell your Car or Truck TODAY Free Towing! Instant Offer: 1-888-420-3805 (MCN) GET CASH TODAY for any car/truck. I will buy your car today. Any Condition. Call 1-800-864-5796 or nani www.carbuyguy.com Town Square Town Square I & II o Apartments 505-507 W. 505 507 W. ermillion, Main St. Ve Vermillion, SD 57069. 1 BR apartments for anyone 55 years of age or older, or persons with older, disabilities. Please call 605-624-5218 or visit www.oakleafpm.com. www.oakleafpm.com. Utilities are included and friendly. we are pet friendly. Rental assistance available to qualify. those who qualify. Equal Housing Opportunity Equal Housing Opportunity COUNTRY FORD Service Dept. 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