Build Your Foundation Before You Build Wealth

23:44George Kamel:But it's not a 401k anymore then, right? Did you roll it over to an IRA? Right. It's a Charles Schwab. Okay. Great. So you've got an IRA with 50K, 83K, and your employer 401K. You want to retire in 10 years. That's the goal. 11 years. Yes. Making up for lost time. We're willing to work until 74. Is that right? It's crazy. I could probably work until 80, but you know. Okay. You sound great. You sound like you're in great health. Well, we want you to work only because you want to, not because you must. Yeah. Yeah, well, I feel like I must because I never saved in all my life. Are you single? No, I'm married.

24:23But I really don't want to talk about my husband because we do everything so separately. I'm just really concerned about this account for me.

24:33George Kamel:So in retirement, you're only going to have access to your own money. He said, don't touch my pot. You guys split every bill? Well, if my husband passes away, he is 11 years older than me, then I would have something. I would have our house. What does he have? What about his retirement accounts? Can you tell us what he has in retirement, just so we know what passes to you and if it passes to you? Say that again. I'm sorry. Can you tell us what he has in his assets? Because if he does pass before you, we can have an idea of what would pass to you. Yes. Yes. I believe he has about$100 ,000. just that he does draw from monthly.

25:12He has a pension also that's separate. Do you know how much he gets for the pension? I think it's about$2 ,000, I want to say, plus Social Security. And do you know if it's structured in a way, you know, sometimes with school system, a pension can be structured in a way that you get more monthly, but when you die, it dies with you, or it can be structured in the way that you get less monthly, but when you die, it can pass to a spouse. do you know how his is structured? No, we, yes, I do. No, it just goes with him monthly and then when he passes, that's it. That's that. So just the$100 ,000 that he's drawing off in the pension?

25:50Yes. No, from a separate account to kind of help end me with the pension.

25:59$100 ,000 plus the$2 ,000 a month and what's the third thing? Social Security. Okay. And I think it's about$1 ,500, I believe. Is his Social Security more than yours will be?

26:16Mine will be close to$4 ,000. Okay, so you'll keep yours. If I take it up to$70-something, yes.

26:22George Kamel:Okay, so we at least have that on the horizon, plus whatever you have saved. So what is your current income for the year, your gross income? It's about$130, give or take with a bonus commission. Awesome. And do you have any debt? No. No home mortgage? No, my husband pays for that. He does that. Okay, but if something happened to him, would you be on the hook for the mortgage? Yes, because the house would go to me. Is it close to being paid off? I think it's about$400. Okay. So no. What I'm trying to factor in is you need a whole lot less for retirement if we're not needing a mortgage payment factored in there.

27:06George Kamel:So that's why i'm trying to figure out all the variables instead of just saying yeah, you should be good But based on your current income, right, you know, we recommend investing 15 until the house is paid off Which would be 19 ,500 for you And that's without a match So every month that would be 1625 going out So i'm going to add that I have our investment calculator up here I'm going to show you and you can watch this back on youtube or spotify You have 133 grand saved We're adding$16.25 a month over the next 11 years, and I'm going to go with a 10 % average rate of return. So when I hit calculate, it's showing me$785 ,000.

27:49George Kamel:How does that sound? 10 years or so. That sounds amazing. That's great. That's 11 years. If you're living just off of the interest that that's generating, I mean,$70 ,000 a year, that's not bad. Plus, you've got your$4 ,000 Social Security. and what I would be talking to your spouse about, I understand, I may not agree with it, but I understand that you wanna keep the money separate. That's your business. However, the conversation that I would be having with him is we're both gonna be retiring and there's things that affect both of us that we both need to have a clear idea of and a clear plan for and that's the house because that's gonna affect each of you.

28:24If you pass first, if he passes first. And so I would wanna know, are you guys going to create a plan together to get this mortgage paid off faster? Does he have a plan to do that? Is his plan, do you want to downsize? Start talking at least about that because that does affect both of you. And for you, it affects you greatly. If that house comes to you and you're used to living in it and now you've got a mortgage, well, now if you can't afford it, you've got to move, all of these things. And so you both deserve to have a really clear plan that makes you feel secure in retirement. Right, right.

28:59Okay. Okay. And George, right? Yes. So on the$16 ,25, is that 15 % of my income? That's what you calculated. That's where you got that number?

29:14George Kamel:Exactly. Gross income. Because$130 ,000, 15 % of that is$19 ,500. Divide it monthly, you get$16 ,25. And that's without any match. And I've got the calculator up on the screen now. We finally figured that out. And so that's if your income doesn't grow. So if it grows, if you get a match, this number will be even bigger. And to give you some perspective,$785 ,000, if you, let's say you had a withdrawal rate of about 6 % to 8%, you're talking$45 ,000 to$60 ,000 a year is what you could withdraw from that. So about$4 ,000 a month. So now if you tack that on with Social Security, okay, that's about$8 ,000 a month.

29:51George Kamel:Now we can figure out, is that enough to sustain our life and lifestyle, the mortgage, health care, all of that at that age? Right. And if I said, oh, I want to retire in five years, of course, that number will be way less. Yeah. At that point, you have a very high likelihood of running out of money. And again, I don't know your lifestyle. I see you're in the Los Angeles area. I know you have the mortgage still. That's probably not going to get paid off in the next five years based on the current trajectory. and so that's where this conversation with your husband, even if you guys have separate finances and I wish I could convince you guys to build this thing together because it feels crazy.

30:27George Kamel:You're building two different rocket ships and you're both trying to land on the moon. Let's just pool our efforts together. If you're the beneficiary, you're a part of his financial plan whether he likes it or not. So I want to know, am I the beneficiary on all these accounts? Can we make sure I's are dotted, T's are crossed because one of us is going to croak one day. Not to mention in a perfect world, there'd be life insurance on both of you so that if one of you passes away, there's a lump sum to carry, you know, at least cover costs for, you know, pay off the mortgage, cover a funeral cost.

30:55Absolutely. So working together is the best bet.

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32:42So if you're new to the Ramsey show, you'll hear us talk about the baby steps quite a bit. And that's because they are the framework that we use to answer every money question. You can learn more about that at the link below the seven baby steps, the key to a rich and satisfying life. All right. Let's go to Bryce, who is in Winnipeg, Canada. What's going on, Bryce? How can we help today? Hello. Hello. You can hear me clearly. For sure. Awesome, awesome. Okay, so my wife and I recently welcomed our baby boy into the world like about three months ago. And so my wife has become a stay at home mother in that time.

33:21And so we're kind of trying to navigate the transition to being a sole income. Last year, she had pulled in 60 ,000, pulled in about 55. And so with her now going to become a stay at home mom, our income is getting cut in half. for the next couple of months. She will be, what's it called, pulling in maternity leave, but that'll end kind of like April of next year. And so I have a bit of a window. I just want to catch it early and try to get the ball rolling to situate myself using the next couple of months to get as sturdy a foundation beneath us as possible. My income itself tends to be highly variable.

34:02And so I kind of want to use the slow season ahead of me to hopefully doubt out like kind of what I can do to potentially fortify ourselves or us in the best way going forward. Bryce, did you guys plan for her to stay at home ahead of time and you knew this was coming or is this kind of like we're figuring it out now as we go? It was like when we had first talked about having kids she did note that she wanted to have multiple and I said if I can make this possible like I would love to be able to step into the role of being that sole provider that is not um like that that'd be an absolute blessing if i'm able to fill those issues for sure um i'm just kind of terrified that i won't be able to and we kind of put ourselves into a precarious ish maybe so financial situation has she already put in her notice at work yeah she she's been away from work for the last three months like she should they

34:57George Kamel:she's not coming back yeah okay that's what i'm trying to figure out if there's still an option for her to go back to work for a season until you guys can figure this out. Because right now you're bringing home like$3 ,000 a month? Right now it's a busy season, so I'm actually close to bringing home$4 ,000 a month. Okay. And that is good for what I'm doing. And then obviously with her mat leave, Anna's closer to about$6 ,500 a month. And we are squirreling away every cent of her mat leave right now. Good. So you're figuring out how to live on your income alone? Yeah, pretty much is what we're trying to kind of figure out how to do.

35:30Have you put it in a budget and seen what the difference is? Like seeing, okay, if I make 4K a month and she brings in nothing, what is the difference? Are you in the red or are you in the green? There's just no margin. What are you finding? Right now, as far as I can tell, it should on paper be in the budget. We should be$200 in the green, which isn't great, but at least we're in the green. Okay. What's your renter mortgage payment? So in this, we actually have three mortgages, which is why this gets kind of wonky. So our first mortgage payment for our primary house is$950 a month. Okay. So we're good on that one.

36:18We're clear. The other two mortgages we have are rental properties, and they end up being net zero. So what they generate completely covers the cost. One of them is a seasonal cottage. It can only be rented out for half the year. and so that's the reason that it's net zero to bring it in just enough to um cover itself so we were like all right cool it's relatively safe um and then the other one yeah what do you have in savings how hold on before you go further how much do you have in savings i hope it's a lot i have uh twenty thousand dollars like basically three months emergency funds but if i brought in no income from the rentals or from myself um we would be completely clear for a minimum three months, probably closer to four.

36:58Oh, gosh. So why are you keeping net zero profit properties? Because it's kind of like a dream that we wanted to have was this cottage going into the future. And it kind of just stumbled into a lot. I know it sounds passive, but. Well, it's not that. It's just that I do think that some things have necessary endings. And I think that in this case, there has been a lot of change. You now have a wife who's not bringing in income. That's a major change. You have a baby. That's another major change. You have three properties and you only have$200 of margin. That's really, really, really, really, really tight.

37:38And then you have two rentals that are net zero. And if for whatever reason, you don't have a renter that month or that renter goes away and it takes you a while to re-rent.

37:47George Kamel:A big repair. A big repair. You're up a creek without a paddle, my friend. I don't have a feeling you probably kind of say that well it's not because I don't want you to it's not because I don't want you to have rentals and it's not because I don't want you to have your dream what I really do want for you Bryce and I know George feels the same way is we want you to feel secure and we want you to feel peace and whenever you bring a baby into the world that is invaluable to be able to lay your head on the pillow at night. Your priorities and dreams have changed right now the priority is she needs to stay home at all costs.

38:20George Kamel:That is the goal. That's the dream, which means the other dreams need to go away for now. And that might mean you sell these properties, take the equity, you have a bigger emergency fund, and long-term, we need to get your income up to make this work. What are these rentals worth? What do you owe on them and what are they worth? Okay. So the first rental, the seasonal cottage, is worth$200 ,000. And we currently owe remaining mortgage on it's$150 ,000. So we have$50 ,000 equity in it. And then the other one is a condo, which is worth$65 ,000 and we owe$50 ,000 for it. And that one was actually unforeseen.

38:58I wasn't planning on having that much risk, but a family member of mine was at risk of going homeless. And so my wife and I, we put our hand out, got the property to have that person put into it.

39:14George Kamel:Well, that's a problem because you have to evict them now if you sell this thing. I recognize that. What if you sold one and took the 50k and paid this one off? The second one off? I'm tempted. I'm quite tempted to do that for sure. It would bring more stability which would be definitely nice. It's just obviously it's hard to let go of kind of like a dream. well it's you're not letting go of it i want to i want to reframe your mind you're not letting go of it you're reframing it and you're restructuring it to where it's more solid right now what you've built has a horrible foundation and we're saying hey we really like real estate and we love the fact that you're trying to help family member we love the fact that you want to stay at home mom we love that let's do it with a firm foundation the the best way to go about this even if you just do this baby steps a little bit at a time the first thing let's sell this one rental that's earning you no money.

40:11Let's take the 50 ,000 and let's at least sure up this other thing. I understand you don't want a homeless family member. Buy yourself some time. Start having the conversation with the family member and saying, hey, we have a life here that we have to live. We're going to need you to start either paying rent or find another place to live. And then you can... They have them. That's the thing with regards to this other one. But it's just at cost. It's cost. You're not making anything. um it's cover right now it's uh what's that well i'm trying to have what looks like oh i'm sorry uh it's uh 900 um that that we're that we're charging them um because we're trying to shore up getting the the debt paid off to get that so we're going to be dropping the rent down to 650 to be at like the net zero um cost so that it's not so we don't run into weird like But here's the problem, Bryce.

41:06George Kamel:You're not in a place to be super generous like this. I hope one day you are. But right now, you guys are tight. You just lost half your income. You're trying to make this life work while trying to be generous over here, while trying to keep the dream alive with this cottage. And that baby changed things. And I think we need to own that, that we can't have the cake and eat it too. And that something's got to give. And if they can afford 900 bucks in rent, let's try to find them somewhere else they can rent for 900 bucks. That way you can sell this property, simplify your life, and be able to afford your life with just your income.

41:34Yeah, because then what if you sold that property, you got the$65 ,000, and what if you threw it towards your mortgage? What do you owe on your mortgage? Our current mortgage, we owe$175 ,000 left on it. Oh, my gosh. I mean, you're chopping that down hugely if you were to do something like that. So do you see what George and I are trying to do? We're trying to get you to some firm footing here. You're in the mud, my friend, and you're about to slip and fall. I don't think you see it the way we see it, but you've got so much risk on your hands right now. Gosh, please think about clearing these properties.

42:09And I don't think that you're going to be able to make this work in a pleasing way for either of you with$200 of margin a month. I think you've got to start thinking long-term about what that means for both of you.

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43:39Welcome back to The Ramsey Show here in the Fairwinds Credit Union studio. I'm still Jade, and he is still George. And Aaron is on the line in Columbus, Ohio. Hey, Aaron, how can we help today? Hi there. Can you guys hear me all right? Absolutely. Very good. Thank you. My question is around emergency funds. So currently I have about half my emergency fund in a high-yield savings account earning 3.8%, and then I have money just in regular checking accounts. I am wondering, what do you guys think about taking some of the money that is in my checking account and putting that into the 20-year treasury as a means of kind of holding some liquid cash but getting a better return on it?

44:30With the discounts, you know, the 20-year treasury is currently yielding about 5.5%. So I'm just wondering if that is a good way to hold some extra money and get a little bit better rate of return on it, but also keeping it kind of liquid and on hand.

44:47George Kamel:How liquid is that? You can buy and sell treasuries. You know, I use Charles Schwab, so you can buy and sell them, you know, pretty much instantly. You would just need to, you know, of course I would need to transfer money out of Charles Schwab into my regular checking if I needed it. But why is it in checking if you don't need it? Why not just move that to high-yield savings? I could. That's sort of part of the reason I'm calling. So I'm a little bit cautious with my money. I'm a father of four and my wife doesn't work. So I kind of keep maybe a little bit more cash on hand than I really need.

45:29But it's just sort of a little bit of how I am. So I have about$21 ,000 in my high yield savings and about$40 ,000 in checking. So I know I probably have a little bit too much in just regular checking. What's that equal for you? How many months of savings is that$61 ,000?

45:51Um, you know, I actually don't know the exact amount of months it would last, but certainly more than, certainly more than six. Okay. You know, if you just kind of go ahead. If you wanted to drop that down to six months and not have any extra, you could take what's left and you could invest it. I wouldn't invest it in bonds, but you could take it in investment because you don't need it in high yield, right? You don't need it in an emergency fund. But I'm going to sell you. I guess there's worse things that you could do.

46:27George Kamel:I don't think you're going to lose a bunch of money. Now, the price will fluctuate. Even the lender is safe. It's the government. So you're good there. But the prices will fluctuate and there's a settlement window and you're going to get less if you take it out before maturity. So it's not as liquid as I would like it to be if it's actually an emergency fund. And personally, I don't have any T-bills or anything like that. I just have a high yield savings account. I keep my six months in there, and then I have my checking account for monthly spending with a little buffer. So for you, you might say, hey, I want a couple thousand as a buffer.

46:57George Kamel:Everything above that is my monthly spending. Anything beyond that, on the first, I'm going to wipe away to high-yield savings and just keep it that simple. Right. Yeah, I think with the bonds, I mean I'm not looking at using that as a means of saving for retirement or anything, but just trying to get a little bit better return on my money that's sort of on hand. I think that's what you have to challenge. I think that's what you have to challenge is what the money is being used for and what it's truly for. With an emergency fund, the purpose of the money is to be there when you need it. You don't want any risk attached to it.

47:35You don't want it to dwindle. You certainly don't want it to go down in value in any way, shape, or form. So for that reason, I would keep it in the high yield savings. And then when you have money that you have it and the purpose is for it to grow quickly and the purpose is for it to be invested and multiplied, then that's the money that I'd want invested well in good growth stock mutual funds. So I think just it's placing it in your mind for what it actually is. And I think we can get hung up sometimes when we put the wrong purpose on what money is for when it's separated in our different accounts.

48:09Okay. Is that fair?

48:11George Kamel:And a good example, Erin, is 1 % spread. Let's say you could make 4.8 instead of 3.8 by getting the T-bills. On 20 grand sitting in there, you're talking about 200 bucks a year. So it's not nothing, but it's not something either. It's just a little over 10 bucks a month, 15 bucks a month is what you're gaining, but you're also losing some liquidity. and it's a lot of mental calories to try to sell it off, wait for the settlement window, access it a couple of days later if there was an emergency. And for that reason, like Fairwinds is great because the high yield savings is tied to checking. So if I really needed the money, I could transfer it to checking and then swipe my debit card right away and I'm done.

48:46George Kamel:And in my every dollar budget, what I do is just have my monthly spending money accounted for. I like to be a month ahead. That's kind of a different approach. But if you have all of your bills ready to go, locked and loaded on, let's say, October 1st, you just have a lot more peace of mind. And then I make sure it doesn't go below a floor. Let's say that's$2 ,000. If it goes below that, I'm going to refund it with savings. And if it goes above a certain amount, let's restock. So that just kind of simplifies it in my brain. I like that. I like that a lot. All right, let's go to Ryan in Nashville, Tennessee.

49:16Hey, Ryan, how can we help? Hey, guys, thank you for taking my call. I had a question about options. We're a little late to the game as far as it comes to investing. And right now we are currently maxing out her 401k Roth at work and then she's got a Roth and I've got a Roth and both of those are getting maxed out yearly as well. You're talking 401ks? Well her Roth 401k she had a regular 401k and we switched that over to the Roth at work because that's what they offer and then we're contributing the maximum to that and then I think they give her four percent so that that one's doing well and then she had a rollover from previous jobs and then we converted that to a Roth and then I trade that one.

49:59And then I have my personal Roth that I trade. But now she has an option. She has an option to buy options. So we don't I understand how they work. I just don't understand like the risk. You know, are you just betting the farm on how the company is going to do or what do you what's your opinion on buying options as an investment versus just maybe starting a new account and trading that?

50:26George Kamel:Now, when you say options, you're talking about, like an employee stock purchase program? Correct. Where she can buy the shares at a discount, like 20 % off? That's correct. Okay. Yeah. And what, is this a publicly traded company? It is not. Okay. That gives me a little bit of pause. Yeah, that would give me some pause because I don't know what it's worth and what it will be worth. And you're still putting your hard-earned money there instead of, let's say, a separate S &P 500 fund. Okay. So now you're making a little money right off the top because you get a discount. So it feels like, wow, this is free money.

51:01George Kamel:Why wouldn't I take it? But depending on the company, it may not be a good deal. And I would sort of look at it as something outside of your 15 % into retirement. If you want to put some fun money there, then you can just say, hey, we're going to budget 500 bucks a month and buy up some of these employee stock purchase program. When you guys max out the Roth IRAs and the 401ks, does that meet your 15 % of your gross income or is there still wiggle room there? Between everything, it's probably a little bit more than the 15%, but we're pretty comfortable with that. Can she sell the stocks as soon as she buys them, or is there a hold on that?

51:40George Kamel:No, there's not a hold. Yeah, you can turn it on and sell them, I do believe. That might be something I'd be interested in, is just buy it, get the discount, sell it, and then invest it on your own somewhere that's more diversified, like a mutual fund or an index fund. That I would do. Thank you.

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53:46let's go back to the phone lines where we have Sophia in Houston Texas hi Sophia George and I are here to help hi thank you for taking my call you bet what's going on So I just want to know a little help with how do I slow down my elderly mother who lives with us from spending her money on charities and political organizations so that she has money to take care of herself as she ages? Oh, man. What is she spending on this monthly ballpark? Well, in the last month, she spent about$1 ,100 on checks. It's like 41 checks went out,$27 approximately a piece. I mean, averaging. We're talking paper checks.

54:35She's writing checks. Paper checks. Hey, hide the checkbook. Problem solved. Right. I wish that would work, but we didn't even know how much money was going out. And then she's needing to order checks all the time. And we're like, wait a minute. Wait a minute. Every time you get checks, that's like 80 checks. What are you talking about? So we're trying to figure out what's going on. Is she all there mentally?

55:00George Kamel:Are faculties there? Like she's not just writing checks out of like a weird habit. She is forgetful. She is a little not quite, but she's not so far gone that she doesn't know what she's doing. Sure. Okay. But she is getting more and more forgetful over time. How much money does she have? She's got like – she sold her house because she couldn't afford the property tax. So she moved in with us with like a$400 ,000 check from the sale of her house. She had hardly anything in the bank before that. And then she so it's been and it's broken down into thankfully more recently we moved a bunch into a CD but for about$150 ,000 and she's got like a savings of$43 ,800 and she has a checking account with like about two grand in it.

56:02Is there anything invested the$400 ,000 whatever is not in the CD is it just in the HYSA? say it's gone it's just gone I and and and I've told her like mom you had 400 oh no I never had that I'm like in what period of time in what period of time Sophia did she blow through the most of the 400 ,000 she uh she moved in in 2022 so between then and now she went through like $200 ,000 oh my goodness okay so yeah this is a big deal and you're just now discovering it Well, we started realizing last year that she had taken in between how she gets her money and she had taken in like$48 ,000 in deposits.

56:54But she had blown through$90 ,000 in withdrawals and we're like –

56:59George Kamel:Well, I'm more worried that there's scam, fraud, things happening here. Absolutely. And even elder abuse where she's unaware of what's happening and thinking she's giving somewhere and she's not. Right. Well, what happens is, you know, they sell her name to everyone. They're like, oh, we've got a live one here. And so. Call her up. She'll write you a check. You got it. You got it. Sophia, you got to step in. You got to step in. I'm trying. But I mean, it's like Dell's Children's Hospital and this missionary. I understand. Well, I'm wondering if you get control of her bank account to where you get financial power of attorney.

57:32George Kamel:And if she needs to make a giving donation, a purchase, it goes through you. Is that like a durable power of attorney? Exactly. And while she still has her faculties, I would get that signed over because in the event that she loses that, it's going to be real hard to get it. You're going to go through a judge. Well, that's what I – okay, so I have been wanting to see a lawyer, and they said I had to get her tested from a doctor in order to even see them because they were afraid that there would be repercussions and all that stuff. And I'm like – so I don't know. Can you go to the – is your name on any of her bank accounts right now?

58:13No, it's all in a trust, and it's a trust set up in California, so I don't even think it's legit out here in Texas. Oh, boy.

58:19George Kamel:Well, I'm wondering if you can get to the bank statements and see where this money is actually going, because if she's writing checks, every one of those has a paper trail. Right. We can get into her account because she can't remember anything as far as like how to go in there and do all this stuff. And that's all of this. All of this, Sophia, is and not that you're trying to build a case against her, but all of this is an indicator that it's probably time to do that. if she can't remember her passwords, it's not normal to go through$200 ,000 of savings that quickly and in that way. So all of that does point to the fact that it's time.

58:58And I bet if you sat down with an attorney and you did the testing, you would be able to get that power of attorney. And in the meantime, I'd also take the money that's in the CD and I'd start to invest that because this dwindled so fast. We need to get a higher rate of return and make sure there's money here to take care of her because if she does end up needing memory care in the future, you want to know that there's some money there to go towards that. Okay. Yeah, that's my biggest concern. Like even if we just have to get somebody into the house to help because, I mean, I'm not young anymore either.

59:33How old are you guys?

59:35George Kamel:Oh, she's 84. She's 84. I'm 60. My husband's 63. I have MS. My husband has a bad back. And we're like, okay, we'll have to get people in to help us. So we've got to get a hold. You've got to be able to get access to whatever lump sums that she has, the$43 ,000, the$200 ,000. Let's get it invested. Let's get it making some money and getting a nice return so that in a couple of years that money is there to help take care of her and help take some of the stress off of you guys. Yeah, yeah. And I would cancel all recurring gifts. So is there anything that she signed up for that's just taking money out of her account every month?

1:00:15No. I mean, other than – I mean, she pays us rent. So she does us rent.

1:00:20George Kamel:Okay. And she pays for – the stupidest thing she pays for is a storage room. And she helps with some stuff like her own phone and her insurance. She still drives. Wow. Impressive. Which I'm not sure how long. You know, I might be interested in setting up some new accounts for her only because she's written so many checks and her routing number, her account is just out there in so many different places. And to George's point, if anybody is kind of going in there and pulling money out of her account and you guys aren't aware of it, maybe just starting fresh would be a good thing. We have not seen anything like that because she doesn't do anything online.

1:01:01It's all paper checks. Okay. So nobody's getting in there. So thank God for that. 100%. They have her name, her address, her accounting number, and her routing number. That's all they need. That's true. That's true.

1:01:13George Kamel:Can you cut the solicitation pipeline out? Can you start unsubscribing, opting out of mailing lists, register her for the do not call list to try to limit the opportunities for her to give? Well, is there anything that actually helps unsubscribe people from mailing lists? Like is there an organization that will do that from mailing lists? Yeah, the do not call list will help with that a lot. And so that'll stop a lot of the unsolicited marketing that she's getting. It sounds like at this point it's solicited. She's reaching out to them trying to donate to these causes, which is wonderful. Yeah, they sent to her first.

1:01:48They sent to her first, and she replies, and then they apparently are selling her. Yeah, and they are selling her information. Just intercept the mail.

1:01:55George Kamel:Just intercept the mail at this point. Just say, yeah, this is junk mail. It didn't make it. But the other part of this is maybe you set up an actual budget for her to give and hey mom you get $100$200 to give this month. Where do you want to give? Yeah, and that way she doesn't lose all autonomy And she's clearly a generous person and she doesn't dwindle her money down in the thousands every month And it probably wouldn't hurt to sign up for delete me or something like that just to make sure She's not getting her personal information isn't out there That's you know what actually we're going to give that to you Our friends at Delete Me will give her a premium one-year membership so that she doesn't have to pay for it.

1:02:31George Kamel:One less thing coming out of her checking account. And that's our gift to you to help her with this. They'll actually go into the hundreds of these data broker sites, remove her personal info, keep monitoring it. And that'll definitely help a lot with all these solicitations she's getting. It's really sad because they do. They prey on the elderly. They prey on older folks who just aren't looking as closely, right? It's low-hanging fruit. It's low-hanging fruit. target and you do whenever you have older folks you really need to make it your business to kind of get sometimes you have to push your way in to get into their finances because they don't they're grown and they don't want to show it to you but it's for their own good so it's worth it

1:03:27Thank you.

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1:05:06so george you have an amazing youtube channel the george camel youtube channel which is so what it's called brilliant name i know i mean but you you guys do a lot on there and a lot of your segments have been doing so well lately that we're kind of like crossing it over here to see what you know everybody likes it so of course this audience is gonna like it too well the main

1:05:25George Kamel:thing people are intrigued by is just talking about wealth and the tactical parts about what does it actually take to have money one day? Whether that's retirement, you want to be work optional one day. And so we started calculating the value of a dollar based on how old you are. And it was so incredible to see how it changes over time. So get this, if you're 25 years old, that dollar you invest is not worth a dollar. It's worth$51 later on in retirement. If you're 30 years old, the same dollar is not worth 51. It's worth 31 now. By the time you're 40 years old, it's down to$11. And by 50, a measly four bucks.

1:06:02George Kamel:So think about a vending machine. You put a dollar into that vending machine at 25, at 65, you hit the return button, you got 51 back. But you put a dollar in at 50 and at 65, you hit return, you get four bucks back. Less time for it to grow and compound. Exactly. And less time contributing on top of that. So the age when you start investing matters because of compound growth. You want that on your side. And that's when your money makes money. That new pile of money makes money. So think about it. 10 % of 100 ,000 is more than 10 % of 10 ,000. That's what compound growth is doing. And so a single dollar invested at age 25 with a 10 % average annual return with zero additional contributions will grow to$51 by the time you're 65.

1:06:41George Kamel:You did nothing else. You just left the dollar sitting in there growing. So let's talk about what it takes to retire. Let's just use an easy round number of a million dollars. Yeah, because people call in at all stages of life and we want them to retire with a million bucks. And before you jump in the comment section, go, George, you can't retire off a million dollars. That's not the discussion. We're just saying, if you have a million dollars at 65, what does it take starting from nothing based on your age? So I'm going to use our investing calculator. We'll drop a link in the description if you guys want to check this out for yourselves.

1:07:09George Kamel:It's a free tool on our website. This is actually the retirement calculator. So this is, I have an end date in mind. So age 25 to 65, current retirement savings is zero. I'm going to contribute$159 a month and we're going to go with an average rate of return of 10%. Perfect. Calculate. You'll see just over a million bucks. What's interesting, I only put in$76 ,000. The growth was$929 ,000. Free money. Because I was so young when I started. Yeah. Compound growth did the heavy lifting. It's like when there's no more footprints in the sand, compound growth carried us. Stop it. There you go. Okay.

1:07:45George Kamel:Now let's move to age 30. What is it going to take to still have a million bucks at age 65, but now we have 35 years for it to grow instead of 40? Well, let's see. If I invest$264 a month, that gets me to, oh, I didn't crunch the numbers correctly. Let me go 30 to 65. There we go. Boom. So over a million bucks, 30 to 65, investing 264 a month. So that's your number, 264. Now let's say you're 35. You're just getting started, nothing in retirement. We're going to change the age there and change the contribution. it's going to take$443 a month now consistently to get that million. And you'll see here, the amount I'm putting in keeps growing because compound growth has less time to do the work.

1:08:28George Kamel:It's more about my savings rate. Now let's bump it up to 40. Okay. You're 40. You're going, hey, I started late. Is there still hope for me? There's still hope. There is, but you're going to have to invest$750 every month. $754 would get us there. Let's find out. There it is. million bucks. Now you're putting in 226 of your own money to get to that million. And then 45, let's up it. Now this is where it gets crazy. It would take$1 ,317 a month to get to that same million by 65 because you only have 20 years now. So less time to contribute and less time for compound growth. Let's go to the big kahuna, Jade.

1:09:07George Kamel:50 years old. What do you think it's going to take? I'm going to go with, what did you do before? At$45, you've got to put in$1 ,300 a month. I'm going to go with$1 ,600. Buckle up. $24 ,13. Oh, I'm pained. Almost doubles. Painful. $2 ,413 a month from$50 to$65 would get you to a million. Again, you only have a 15-year time horizon, and you'll see the money you put in was$434 ,000 of that million. Oh, my gosh. So that's the power. At 25, you put in 159 a month to get to a million. By 50, you got to put in 2 ,413 a month. That is the power of compound growth. And it's why we tell people to get started earlier.

1:09:48George Kamel:We've got a chart here if you're watching on YouTube or Spotify. So I always tell people the best time to plant the tree was 20 years ago. The next best time is today. So no matter who you are, this is not to shame you if you're in your 40s wishing you learned this stuff earlier. This is to tell you that the best time to start investing is today. Do not delay. Don't wait. Even if you're 50 with nothing safe for retirement, don't worry. You're not up a creek. You still have time. Yeah. And the fair thing about that is when you kind of go back and do the math in reverse, because we always say invest 15 % of your income.

1:10:18And so if you look back, even at the highest number, that's 15 % of basically$105 ,000, $106 ,000 income. So there really is hope when you look at this, because most of the folks that call in, they're kind of making around$80 ,000 to$100 ,000. That's what we see. and so there truly is hope. Obviously, you do want to get started faster.

1:10:36George Kamel:And once you pay off the mortgage, you can increase investing to 20, 30, 40 % of your income. If you follow the Ramsey plan, you've got no debt, no mortgage payment. You can make some big catch up on that. For sure, for sure. Love it. So go check it out. You can get the retirement calculator, investment calculator in the show notes and description of this episode. Go check it out and drop a comment. Let us know how old you were when you started investing and where you are today. That'll be a fun little social experiment. I like it. Love it. Let's go to Sarah, who's in Tallahassee, Florida. Hey, Sarah, how can we help today?

1:11:09Hi, yes. Thank you for taking my call. I am looking to buy a house, and I got into a situation where I've been negotiating with a new home builder, and tomorrow is the end of their fiscal year, so they're offering me just all these incentives and things, and I just want to make sure that I'm making a good decision and not just kind of an emotional decision to buy right now. Okay, tell us more. well um the um house they have agreed to take 15 000 off the asking price give me 15 000 towards closing costs and then add on some other stuff like gutters and washer and dryer and then give me an interest rate of 5.56 rate on a conventional loan are they the lender too yes they are interesting okay so yeah i'm just nervous because i'm like a lot of like 20 percent down is a lot of money to give and all of those things.

1:12:03I just want to make sure it kind of makes Yeah.

1:12:05George Kamel:What will the payment be? Let's say you did all of this tomorrow. What would the mortgage payment be comparatively to your after-tax monthly income? The principal and interest would be$1 ,500. Okay. And I make$132 a year. Fantastic. So this would be less than 25 % of your take-home pay? Yeah. I mean, that's about like tax and insurance and all that stuff. Okay. If you included the property taxes insurance, what would it turn into? That would be$2 ,200. Okay. And what's your monthly take home again after tax? Is it about like$7 ,500? Yeah, right around there. That's reasonable. Nothing's on fire here.

1:12:46George Kamel:I assume your income will go up over time. Are you single? I am. Okay. This doesn't sound like a bad deal. If this is the house you're already wanting, Is that the case? That you would go through this even if this was a month later? Yes. Do you have time to save because the full amount isn't due until the home is built? Or is this a spec home that's already ready to go? It's a spec home, and I have the cash. I'm looking at my savings, and I'm like, oh, it's so big right now. I felt that. There's a lot to go away from it. Yeah. Well, did you earmark it for a house? I'm sorry? Was this money earmarked for a home anyways?

1:13:25Yeah.

1:13:26George Kamel:Okay, then don't feel guilty spending it. I know it hurts because like, what can I do with that$500 ,000? But there's someone else out there going, man, I wish I could be in that home. And you for sure would have an emergency fund left over after the fact? I would have, well, so I have, I have$28 ,000 left in savings, but I do have$8 ,000 of that earmarked to pay off a credit card. that's at 0 % interest. So I have that money. That's like earning money and like a, I forget what it's called, high yield savings thing that I have. And that credit card's your only debt? I have a car as well at$10 ,000.

1:14:03George Kamel:Okay, here's my caveat. If you promise me in America and God that you'll pay off the credit card and the car today, then I would feel really good about this. Go into this thing debt-free with some savings in the bank. That might mean you put a little bit less down to have some cushion as you move in, but I don't think this is a bad deal. I mean, if they're willing to throw some incentives, you might be on the bargaining end here and even ask for a little bit more before you sign the papers.

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1:16:15All righty, let's go back to the phone lines. But before we do, I just want to correct a mistake I made when we were talking about retiring at any age with a million dollars. The final number was contributing$2 ,413 a month. That's actually closer to making$200 ,000 a year. Let's be fair about that.

1:16:33George Kamel:Okay, from age 50 to 65. Yep. All right. Thank you for that. You're welcome. I just like to keep things clean. It's who she is, America. It's who I am. Good hygiene. Let's go to Stephanie, who's in Springfield, Illinois. Hey, Stephanie, what's going on? Hi, thank you for taking my call. I really, really appreciate this ministry that you guys have. So I have, we're on baby step number two. My husband and I have been doing it for about a year. We've paid off quite a bit. We still have about$54 ,000 in debt. But I'm calling to kind of get an idea of how to justify, because we are sending our kids to private school.

1:17:10They are 11, 13, and 15 right now. It's non-negotiable for us to do this, but it is also our largest monthly expense. How much? When we're doing our budget. It is, oh gosh, I had it written down. It's about$950 a month.

1:17:31George Kamel:Oh, I thought it was going to be way more. Yeah, me too. I thought you were right to be like, it's$6 ,000 a month. That's not even daycare for one kid, I'm just saying, you know. Well, our mortgage payment is only$800. I do have a$600 car payment right now. So it's our biggest expense. And I think I'm dealing more with the emotions of it. Like that could be going towards our debt snowball. But I definitely don't want to skimp on their education because they're thriving at the schools that they're attending. So I guess maybe my question isn't so much financial as emotional. The question is, how quickly are you able to tackle this debt?

1:18:11What's your income? Like we need to know a little bit more before we can say if this is really off the rails or not. Okay. Yeah. So after taxes, we bring in about$9 ,000 a month. Okay.

1:18:22George Kamel:Are you guys doing any investing right now? I think I've got like$400 coming out of my paycheck a month into a deferred comp. I work for the state, so I'm in the pension program. but my actual investing separately from that is only about$400 a month right now. Would you be willing to pause that as a concession? The$400? Yeah. Like pause all investing while you knock out the debt, free up as much money as possible. Because what I'm trying to figure out is if you can come up with an extra$950 a month, would you feel a whole lot better about this private school expense? Yeah. So we are using the EveryDollar app.

1:19:02Um, you know, we're doing our budgeting stuff and we are able to throw like 1500 to$2 ,000 a month at our debt, um, right now. Okay. Um, so we're making progress. We've paid off a lot. We've paid off medical bills and, you know, the small ones, medical bills and credit cards and things. What are minimum, what are minimum payments? Because I'm just looking at, I'm just doing napkin math here, but I'm like, okay, 9 ,000 bucks a month. We take out the three biggest expenses. You're down to$6 ,650 a month. We take out groceries. There should be more money left over. There should be more money left over for you to only have$1 ,500.

1:19:40I'm just wondering, is there more? Okay. The minimums, we've got the one credit card we have left. It's got like a$200 minimum. My mortgage, like I said, is$800. Tuitions, right around$900. Right, but I... You said there's our payment,$600. Yep, and I accounted for that. So that's what gets us to the$6 ,650. And then if I take out your margin around$2 ,000, that means there's$4 ,650 going towards variable things in your budget, minimums. Does that feel right? We spend probably about$2 ,000 a month on groceries. Okay, that's... It's not high, but it is high for what you're trying to do. You know, it's fair to say an average family of four spending a mediocre amount on food could easily spend$1 ,300.

1:20:37So$2 ,000 is high. I would try to get that down to$1 ,500, 100 % if you can.

1:20:43George Kamel:And if you then stop investing too, you just freed up about$1 ,000 right there that you didn't have. Okay. So that's the sort of budget audit I would be doing because I think you'll feel a lot better if instead of just sending$950 to private school every month, you're coming up with an extra thousand to throw out your debt on top of that. That way you're not losing progress. Put that in quotes. And I would make a goal to say, if we throw 2 ,400 bucks a month, 2 ,500 bucks a month, we're done in, let's call this less than two years. That's pretty impressive. Okay. Yeah. Yeah. Okay. So we're trying to get to a$2 ,500 margin.

1:21:20George Kamel:Exactly. Because 2 ,500 bucks, you divide that into, you know, 54 ,000, you said is your total debt, that's 21 months. So now we have something to aim at and we have a margin goal to aim at. And now that becomes the thing we're all gunning towards, regardless of what the private school is costing us. So let's now project, now that George has given us basically a little less than a two-year horizon, that also puts you with a 17, almost 18-year-old getting ready to go from private school to whatever next education. Have you guys started of thinking about that and talking about what that would mean?

1:21:53Yes. Um, we obviously are not in a position to save right now, but, um, our son is very bright. So we're aware of, you know, community college opportunities, scholarship opportunities. He actually worked his tail off to get a scholarship for the private school that he's attending for high school right now. Great. So, um, he's very motivated and I am sure that whatever he can do on his end, um, He'll be able to. And then, yeah, obviously, if we've freed up some money, we'll have, you know, some money that we can pay, you know, not to save. But yeah.

1:22:27George Kamel:Think about once you're debt free and you have an emergency fund, that same twenty five hundred bucks can now go towards cash flow in college. Right. And if you choose an affordable school plus scholarships, grants, them working part time, I think this is a very doable process. Yep. Just getting ahead of it and thinking out like you have been, I think is so good. A lot of people get in Stephanie's situation and they're so focused on the debt, they're not thinking about the next thing that's going to be kind of banging on their door after that. The next monster. Yeah. Down the path. But having that conversation with your kids early so that they know here's the expectation.

1:22:58Mom and dad didn't get a chance to save for that. So we're doing scholarships. We're doing a community college. You're working and we're cash flowing. That's how this is going to work. Very, very good question. You know what, George? I like to go to these social questions a little bit. These are some of my favorites. The world is your oyster. Yeah, I mentioned it before. We have some really great communities online. Obviously, George is social, my social. We also have a really great Ramsey Baby Steps community on Facebook that's got tons and tons of followers.

1:23:23George Kamel:It's bumping in there. Sometimes I'll jump in just to create some chaos. I like that. You jump in the comments? I do. I've done it before. Sometimes I get tagged in there too, and that makes it extra fun. True that, yeah. Hop in there if you've never seen it. Well, anyway, Jason from the Baby Steps community said, if we can easily cash flow college tuition and expenses for our three teenagers, are we doing them an injustice by not allowing them to learn how to pay for it on their own? What a great question. I don't think it's an injustice to cover your kid's college. Now, if they have zero work ethic and they're just entitled brats, that is your fault.

1:23:58George Kamel:That is an injustice. You've done them dirty on that. But if they can learn how to pay for other things on their own that they just are wants, I think that's fair. I'm totally good with covering education for my kids, and it's a goal of mine. And as long as you raised them right to go, hey, money doesn't just grow on the trees. That's right. You've got to go out there and hustle and work for it. And if you did it right, they've been doing this with other things in their life, saving up for the video game when they're younger, saving up for maybe they're paying half a car and you're paying the other half once they turn 16.

1:24:27Listen, I agree wholeheartedly. there is part of me, I will say, and it depends on the kid because every child, you know, every teenager is not the same, but some teenagers do need a little skin in the game. So they feel like they've got something on it. You know what I mean? I just remember my freshman year, there were a lot of people who didn't make it back to the sophomore year because they flunked out. And it's like, you need a little skin, you need a lot of money and some hard work that you want to make sure there's something to show for it.

1:24:54George Kamel:You don't want an unlimited like Scrooge McDuck pile of money for them to blow through. Right. But I think covering tuition, room, board, that's fine. But I wouldn't fund their lifestyle on top of that to where they just can do whatever they want. I'm going, hey, you got to work part time if you want some fun money to spend. I saw a social media post and a guy was basically saying, my wife and I saved up and we bought, basically bought homes for our kids and covered this and that. And he said it was the worst thing they ever did because they're all brats and they're all like not knowing how to take care of themselves.

1:25:23And so to your point, it's about - They were brats beforehand. The home didn't do it. It's about the children that you raised, not the generosity that you gave them.

1:25:32George Kamel:So the other side of the spectrum is this, which is I'm going to punish my child. They must learn. They have to cashflow$100 ,000 a year, even though I have the money. Listen, come on. Don't do that to your kids. Yeah. There's a generosity play here. And if you can ensure that your kids enter the world without student loans. You have given them a leg up in society and they will be forever grateful for you if you raise them right.

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1:27:17Welcome back to the Ramsey Show here in the Fairwinds Credit Union Studio, continuing to take calls about your life and your money. George is next to me. I'm Jade. And Matthew is on the line from Oklahoma City, Oklahoma. Hey, Matthew, how can we help today? Hi, how are you all, guys? Doing all right. What's the word? So basically, I just want to know what I need to invest into and what my monthly budget needs to be to become a millionaire. Ah, we love this question. We were just talking about this earlier.

1:27:48George Kamel:That's right. So what's your current status? Where are you at financially? So financially, I have$4 ,000 in debt, and it's on my truck. It's almost paid off. And I bring home$100 ,000 a year. Great. Do you have anything in savings right now? I have about$5 ,000 in savings right now. So you're telling me you could pay off the truck today and still have$1 ,000 left over? Perfect. Yes, sir. And free up that truck payment, which is how much? It's only$4.37 a month. I don't like only in front of any debt payment. So you free up$4.37, and then you can begin saving up a fully funded emergency fund of three to six months.

1:28:33George Kamel:That's baby step three in our plan. How long would that take you once you free up the truck payment today? uh it probably take me five weeks to save up ten thousand dollars wow that's impressive that is so you can save two grand a week yes sir wow how is that possible there's 52 weeks so you're telling me you can save up 100 grand a year but you make 100 grand are you living at home um so currently i'm on the road right now and I stay in a apartment here in Helena, Montana. Okay. And so your expenses are low, but they're not zero. So no, no, they're not zero. No, that's fair. So each month is basically off of hours.

1:29:24So, um, some months I make 10 grand some months to make 13 grand. Got it. Got it. Okay. How old are you? I'm 21.

1:29:33George Kamel:Oh, my gosh. This is incredible. Man, this is fabulous. You got this stuff early. I mean, think about that. Debt-free at 21 with some savings in the bank, you're so far ahead of the curve. Yeah, and making$100 ,000, if you're investing 15%, once you save up that emergency fund, you're investing 15%. That's$15 ,000 a year. And if we divide that by 12, that's$1 ,250 a month that you're putting aside. This is off of your gross income. And that's just going to compound over the course of your life. George, are you plugging those numbers in, buddy? I got it. I wish you could see the screen right now, Matthew, but you're about to have your mind blown.

1:30:09George Kamel:Because if you follow what we're teaching you, let's say by the end of the year, you have an emergency fund saved. Is that fair? Yes, sir. So we start 2027 investing 15%. That's$1 ,250 a month of your income. We're going to do that for 39 years. Let's bring it to 60. Is that fair? Yes, sir. Okay, with an average rate of return of 10%, that's because of compound growth. Totally fair. Because you're investing, not saving. You would have$7.1 million. Wow. Wow, that's incredible. Which means you'll be a millionaire well before 60. It's just going to continue to compound until you get to the 7 million.

1:30:43And that's if your income never goes up.

1:30:46George Kamel:Yes, sir. So that's your commitment you're making to yourself, is that I'm going to put$1 ,250 away and learn to live on whatever's left. yes sir how does that feel feels awesome i just wanted to talk to you guys so y 'all could talk some sense into my like talk some sense into me yeah why do you think you need to kick in the pants here yeah have you what have you i mean obviously you had some debt on the truck but you're just getting started you haven't had a chance to mess up just yet and that's another thing that's so funny about this i won't have a mortgage because my father-in-law actually gave me and my wife a house.

1:31:22Whoa. Congrats. And you're married. We didn't know that. What's she make? Yes. She is currently in college. Okay. So to George's point. Her dad's paying off the student loans. Well, actually she won't have any student loans. Her dad's just paying for college. That's excellent. So you add her income into the mix and you guys are going to be super wealthy, my friend. That's the goal.

1:31:46George Kamel:Now, do you have an employer retirement plan? uh yes sir what is it uh so it's a pension and annuity and they take basically every hour that i work they take what i make an hour and they put it into a pension and annuity so basically it's two of them is that required or is it optional i think i really don't know i just started working here in January. Okay. I just don't love, I mean, pensions and annuities just have crappy returns and you have no control over them. So I'm wondering, maybe you fully fund a Roth IRA on your own because you have earned income. You can do that outside of your employer.

1:32:28George Kamel:And that's 7 ,500 bucks is the max for the year. So you could fund that thing and still, you know, invest in your own retirement plan. The pension annuity, is there any, are they matching what you contribute in any way, or it's just a place for you to park the cash? I don't know if they're matching at all. I think they just take basically what I make an hour, and the hours of the year I work, they put towards it. Okay. Yeah, I'm definitely with George. I like that. And I would love for you to just kind of get a little bit more well-versed on our investment strategy. So you can go to RamseySolutions.com slash SmartVestor and just kind of learn about the best way to do that.

1:33:05We suggest investing your money over four different types of mutual funds, growth, growth in income, aggressive growth, and international. and if you can start to do that and just start getting that ball rolling, gosh, like I said, with your wife included, once she gets out of college, you guys are going to be rolling, rolling, rolling. You're going to be calling us back one day saying,

1:33:24George Kamel:I've got a$10 million net worth. I know. What do I do now? That's crazy. You know, I actually feel like it's impossible for that to really sink in in a moment. Yeah, well, it's hard to forecast 39 years from now. Sure, sure. But the truth is, I mean, gosh, if the market continues to do what it has done since inception, basically. Yeah, that's a true scenario. Hoping that the United States doesn't - Implode? It doesn't all come down like John DeLuni would say. It's all coming down. I'm very optimistic when it comes to the US economy. It somehow keeps going. It keeps hitting record highs - Takes a lick in and keeps on ticking.

1:33:58George Kamel:No matter what's happening in the world. Yeah, that's true. That's true. All right, back to our Facebook community questions. Actually, I've got one here. Yeah, they're all from Facebook. Look, so Dean said, is it okay for a single person to get insurance? My 28-year-old son wants to get a policy that would cover his mortgage because he wants to provide for us if anything happens to him and to cover his funeral expenses. Is it wrong for him to do this? Wow. I mean, is he living with you? It says that would cover his mortgage. Now, I think it is wise to have enough life insurance. We say 10 to 12 times your income.

1:34:34George Kamel:Yeah. And so that would definitely cover the mortgage and then some and funeral expenses. But I wouldn't get it. I guess he's single. So yes, it is wise to do this while you're single because you are young and healthy and the term life insurance you get is going to be cheaper. Yeah, absolutely. In the next couple of years, you might meet someone nice and you don't know what your health is going to do either. And that's really more what it's for because you're thinking about people who depend on your income. That's one of the primary purposes of it. And so I like the idea of him getting it young when he can lock it in at a low rate.

1:35:05But the purpose of it is more so, to your point, what his life is going to be in the future. Maybe there'll be that special somebody who's dependent on him, but not for the parents necessarily.

1:35:16George Kamel:No. And both Jade and I have our life insurance through Xander. And so if you guys want to check that out and get a quote from them, go to Xander.com. 10 to 12 times your annual income on a 15 to 20 year term. That's what you're looking for. Because if you follow our plan, by that point, you're going to be self-insured when the insurance expires. You don't need this whole life or permanent life insurance crap. Get a good level term life policy through Xander.

1:36:06Hey, guys. Dave Ramsey here. Every day on this show, we help people work through real money problems and figure out what to do next. Now, you can get that same kind of help anytime with Ask Ramsey. Ask your money question and get answers built on Ramsey principles we use on the show. Whether you're making a decision or just want something explained, Ask Ramsey is here to help. It's fast, simple, and free to use. Go to RamseySolutions.com and try Ask Ramsey today. That's RamseySolutions.com.

1:36:59All right, well, let's go to our Ramsey Show question of the day, which is brought to you by Y-Refi. If your private student loans are in default or you're not sure what to do next, Y-Refi can help you explore refinancing with low fixed rates and a payment plan that's based on what you can actually afford. So go to Y-Refi.com slash Ramsey. Remember, that's the letter Y-R-E-F-Y dot com slash Ramsey. It may not be available in all states.

1:37:26George Kamel:Today's question comes from Todd in Alabama. Our eldest son is 16 years old with a new driver's license. He regularly drives one of our vehicles. My wife does not want to add him as a licensed driver on an insurance because she knows the rates will go up substantially. She states that our insurance agent said it would be fine, and if he gets in an accident, they'll just say he was using it that once. I fear this could have serious financial repercussions as I can't imagine a scenario where the insurance company buys the story and just pays up. Should I go along with this or insist that we add him to our policy?

1:37:58What in the world? Why is this even?

1:38:00George Kamel:Who is your insurance agent? It's like, yeah, I should be fine. Just say it was a one-time use. That's crazy work. I mean, yeah, I would definitely add them. It's just a fact of life that insurance for a 16-year-old is expensive and it will go down over time. So budget for it. Have them working part-time to help cover all or if not most of it. Yeah. Have some skin in the game because you drive differently when you're the one paying that insurance bill. Yeah. And there's some things you can do to help it out a little bit. You know, the color of the car matters, making sure it's a nice used model, pay cash for it.

1:38:34Like those are some little things that can maybe bring it down. Now's not the time to get a red, a brand new red Civic. You know what I'm saying?

1:38:40George Kamel:Yeah. And the other part is there could be some discounts, good student drivers at discounts, higher deductibles. If you've got a solid emergency fund, there's a lot of things you can do to lower that premium. And so if you want a second opinion, and I would get one because I don't know who this insurance agent is, I would jump on RamseySolutions.com and you can find a Ramsey trusted insurance agent to help you find the right coverage of the best price and look into all the discounts and premiums and levers there. I got to say that might be some of the worst like secondhand advice that I've ever heard.

1:39:10George Kamel:Why would you risk it all on a 16-year-old? My goodness gracious. Just budget for it. My goodness. All right, let's go to Tony who's in Lexington, Kentucky. Hey, Tony, you're on the line. Good afternoon. How can we help today? Well, let me give you a little bit of background before I get into my question. In the last two and a half, three months or so, my wife and I have had two accounts that have been hacked. And we were to the tune of about$70 ,000. What kind of accounts were these? Well, the one was an interest-bearing checking account that we'd had for a number of years. We moved into a new house about 14, 15 months ago, and we were using that account to pay on a mortgage.

1:40:06Now, when you say hacked, is that somebody, there was fraud and they spent the money and the bank would not return it to you? Oh, no, I've gotten the money back. We've gotten the money back. Okay, good. But in June, we had sent in July's mortgage payment, and we've been adding to the principal. And that check was for just under$22 ,000. We found out that somehow that check didn't make it through the mail. I'm not sure where it made it. but the bank used the term that the check was washed and someone took off the mortgage company's name, put somebody else's name on there and was able to cash it.

1:40:56Oh, my God, they can't trace it? Well, no, they traced it. They said it was cashed in Dallas, Texas, according to the information the bank gave us. we did get the money back and we opened another account. We couldn't close that one entirely because we had some direct deposits going in there.

1:41:18George Kamel:What's your question, Tony? I want to make sure we have time to get to that. So you've got all the money back. You're not out of pocket. Yes. Okay. Well, and then that new account in late August, that new account, someone got that account number and they printed a check on that new account number. Accountant was two months old and it was for$48 ,000. Did you get that money back? Yes, we got that money back as well. Okay, good. But both of those instances caused me to think about the security of our money that we've got in IRAs and investments. And trying to figure out at what point in our lives, we're 75 right now, So at what point in our lives should we begin looking at moving some of those funds into a, neither one of those are in high risk investments, but I'm assuming at some point in our lives, we may want to look at changing, moving some of those into less risky, whether it's some CDs or whatever.

1:42:24Well, I hear two different things here, Tony. On the one hand, I hear we've dealt with our accounts just not being secure. We keep getting our identity stolen. We keep having fraud and theft. And then on the other hand, I hear, well, the investments that we have should at some point, do we want to move them into something that's, I'll use your words, less risky. So I think those are two different ideas. The first one, let's talk about the identity theft. I would just sign up for Xander ID theft insurance, and they're going to help you stay ahead of these things. They're going to alert you when somebody has your information.

1:43:03If somebody does steal your information, they're going to go to bat for you. So I would check into that. You can go to RamseySolutions.com slash insurance. It should be there, right?

1:43:13George Kamel:Yeah, Xander.com. You'll see it right there. on the homepage. So you'll have financial protection up to$2 million through that. So that's one step to take. I would also make sure you got, you know, two-factor authentication, all these accounts and good passwords and all that stuff. But this is crazy that it's happened that many times. And then to Jade's point, there's a different thing you're worried about, which is market risk, which is the market volatility. Yes. So how much money do you have? In the, between the IRAs, it's not a whole lot. We only got a little over$500 ,000. dollars. Our retirement income is fixed with four separate incomes at about$120 ,000 a year.

1:43:54George Kamel:Fantastic. So you don't even need the$500 ,000 in retirement. No, we haven't. Since we've been retired, we haven't done anything as far as getting anything out of those IRAs or investments. Good. Well, in that case, I would be investing more aggressively because you're not needing to touch it. And then whoever gets to inherit that one day, what a legacy you got to leave if that money doubles in the next seven years because it was invested well in good growth stock mutual funds instead of a bunch of CDs earning 3 % or 4%. So if anything, I would invest more aggressively, not less aggressively, since you don't need the money.

1:44:26So you've got two pieces of homework, Tony. We want you to go to Xander.com and pick up that ID theft protection. And then we want you to go to Ramsey.com slash SmartVestor, and you'll find a SmartVestor pro who can help you invest this money just the way that George is teaching it. It's going to be somebody who has the heart of a teacher. They're going to send you several different pros and you're going to be able to vet and interview them and decide who's the best person for you to work with in order for you guys to do this. I like that plan.

1:44:56George Kamel:Go ahead. I was just wondering, you know, Dave and I talked about this in our Investing Essentials virtual event because there's an asset allocation theory that he talks about. And everyone goes, hey, you're 60. It's time to really get spooked and put half your money in bonds Well, here's the problem. If you make it to 60, you have a good chance of making it to 70, 80, 90. Right. If you're in decent health. And so that's a problem. For 30 years, you're missing out on market returns. Just sitting back, yeah. With half your portfolio. And that's why Dave sticks to 100 % equities. Absolutely. So that's my plan of retirement.

1:45:28George Kamel:And we're not saying have no money in the bank. You can have a year of expenses to help protect you in a market downturn. Even two years of expenses socked away in a high-yield savings account. That's liquid to help you there. So that would be my strategy in retirement. That's what I plan on doing. Keep the majority invested. Keep it in the same growth stock mutual funds you had it, but keep a nice portion, whatever makes you feel good. So if the market's down 20%, that's the worst time to take money out, of course. So you can go to use your cash, replenish it once the market is back up. And remember, you're not taking out all the money at once.

1:45:58George Kamel:You're just taking what you need to make it through that month or that year. Yeah. So don't get spooked by that. I love that strategy. And for anybody else listening, if you don't have Xander ID theft protection, you need to get it. It costs a couple of dollars a month, guys. It's really inexpensive, but the protection that you get is totally worth it, especially in today's day and age.

1:46:47Hey, it's Dave Ramsey. If you or someone you know owns a small business, listen up. What if you could build the kind of business you'd be proud to hand down to your kids? Over 30 years, I've been able to build Ramsey Solutions into a business that's going to be a blessing for my kids. I'll show you how to do the same thing at Entree Leadership Master Series November 8th through the 13th. During this five-day conference, you'll get my strategies for building a winning business that outlasts you. Visit RamseySolutions.com slash Master Series for tickets or click the link in the show notes.

1:47:42Well, George, for the folks who filed an extension here in 2025 for their taxes, just know that that October 15th deadline is coming up pretty quickly. It's right around the corner. And the good news is you do have a couple of options on how you can handle this. Number one, if your taxes are pretty simple, pretty straightforward, you could just use our Ramsey Smart Tax. It makes filing simple, affordable, and there's built-in support if you need it. But if your taxes are a little bit more complex, if you're overwhelmed, then you probably need a tax pro, somebody to help you make a plan. And I mean, gosh, nobody wants to face the IRS without a backup plan.

1:48:19So go ahead and hire a tax pro. But if you're not sure what to choose, you can go ahead and take our tax quiz. You can find that out real quick by doing that. And you can find that tax quiz at Ramsey solutions.com slash tax quiz. All right, let's go to Mandy, who's in Milwaukee, Wisconsin. Hey, Mandy, how can we help today? Hey, thank you for taking my call. I'm excited to be on the show. Yes, ma 'am. Thanks. So my question is, I've been sleeping on some debt. It's been on the back burner for about 15 years. We just had our last baby. I'm pretty sure.

1:49:00George Kamel:How many total are there now? This was our third, our third girl. Fun. Wow. Three girls. Yep. And she's a month old now. So, um, so yeah, I'm thinking about going back to work soon. I've got about six more weeks of my leave. And I think when I go back, it's going to be really time for me to, uh, get started on that debt. Is it just you or you and your husband? Oh, yes. I'm married. It's me and my husband. But the reason I say it like that is because the debt is technically my student debt. I know it's both of ours, but I feel responsible for it. But are both of you going to pay it off or is it just your income that's going to attempt to do that?

1:49:52Yeah, and this is the one part that we're Dave-ish on is I think I'm going to try to start this off on my own, mostly due to just the feelings of guilt and shame around the debt.

1:50:07George Kamel:That's never a good reason to do anything, is that of guilt and shame. What does your husband feel about this? If you talked to him about this and said, hey, once I'm done with leave, I really want to attack this debt, what would he say? I think he would do it with me, but I think it would be, I'm not sure if it would be something he's going to love to do. If I could do it myself, I would, and I just got my new job with a really great salary. Okay, what are you going to be making? These are my reasons. Well, okay, when I say really great, I mean for me it's really great. It's about 90. That's excellent.

1:50:48George Kamel:Okay, and how much debt do you have total? $53 ,000. And that's all the student loans? It's all student loans. It's consolidated. Can I ask a quick question, though, before we move forward? So I hear what you're saying, the guilt. He might not like this, but do you guys combine your money? Do you combine? Like, do you live off of combined funds and everybody's money is everybody's money? Or how do you guys live? Like I said, it's a little Dave-ish in this one way. I don't see where Dave is in any of this right now. What part of this is the Ramsey plan? I know. I'm sorry. We have a joint checking that we use for all of our shared expenses.

1:51:29And he puts some money in there, you put some money in there, and then you keep the rest of your monies for whatever your purposes are. Yep. That's how we do it now. It could change. Before we go into this, I can't leave this alone. Do you want it to stay that way or do you want it to change?

1:51:48that's a good question I never actually really thought about let's put that on your list of things to do tonight is I want you to decide what you want your life in relationship with money to look like with your husband because it does feel separate you know George said it and I'll say it too it's really hard to accomplish goals together when your money is separate and just on another layer I know you didn't ask for this but it's very hard for me to just walk on past this there's clearly some element of trust that's not there. Because when you get married, you do, you want to become one and you want to have such levels of trust and transparency that what's yours is mine and what's mine is yours.

1:52:27You people have three babies together. So you have shared on a molecular level. And yet when it comes to the money, there's like this weird separation. Does that strike you as a little bit odd? Yeah. Yeah. And we do. And I wonder if it's really because we We haven't had a big reason to really put it together. Yeah. And, you know, I guess this could be a good reason for us to do that and get on the same team. And it could be a conversation.

1:52:54George Kamel:Well, does he have any debt? We have a good. He doesn't have any debt. How do you know? He's had a few. Well, he's had a few credit cards that he told me about that are paid off, like store credit cards. And I never really dug into the questions on it because I trust that's true. But that's where I just want to call that out. That's where the layer lies. So when there's transparency built in, it's just baked into the way we do our lives. We don't have to be detectives. I can just see it. I don't have to ask my husband, do you have debt? Is it a store card? What did you buy? What did you do? I don't have to remind myself to ask questions or dig deeper.

1:53:32It's just right there. And so there's kind of like an easy button that you're inserting in your life that's like, okay, now we can just see I don't have to be a detective. I don't have to grill him. We just have one account, right? And so it does add a level of ease there. So anyway, just add that to your list of thoughts and things to think about and just know I'll level set with you. This is probably if you do decide that you like this idea and you want to start combining, it's not going to be one quick conversation. It's probably going to be an ongoing conversation with him because you've been doing it like this for 15 years or however long you've been married.

1:54:07So just setting that up. Okay, back to the debt.

1:54:10George Kamel:Back to the napkin math here. So you're going to be making 90. How much could you realistically throw at the debt every month between the minimum payments and the extra? We do have some expenses with the kids in daycare and rent. We're renters. I thought about it And I thought that the most I could do Is Oh gosh Probably No more than$2 ,000 a month Okay So that means it would take you If you did it that way And really committed to it It would take you a little over two years Yeah, and that would be hard And that's just my And that's me calculating on my income Now let's pretend He's on board What does he make?

1:54:51Well That would be different Yeah Well, he makes about$65 ,000 a year.

1:54:58George Kamel:And how much margin? Let's say you guys did a budget together and you said, hey, we're going to attack this debt with a vengeance, which means everything that's not an essential expense is going to go toward the debt. Could you guys put$3 ,000 toward the debt,$4 ,000 toward the debt? Yeah, well, I didn't do that math problem, but I think we probably could. Well, imagine this. You guys have a great income, right? We can all agree. $150 ,000 is a fantastic income. if you could throw$4 ,500 at this debt, it's done in less than a year. Oh my gosh. Instead of over two years, it's under one year when you combine your powers together.

1:55:34George Kamel:So that's what I'm trying to say. If you're saying, how do I commit to this? The hard part about commitment is the longer it takes, the less likely you are to finish. Oh. But if you just see the light at the end of the tunnel 12 months from now, and you both are looking towards that, it's going to happen. And it's going to actually make your marriage better. wow i i love that yeah thank you for that advice i'm giving you a marriage life hack here i've never seen a couple who paid off the debt together regardless of whose debt it was who didn't walk out of that stronger as a couple more bonded more communicative so that's what i'm saying if you can get them on board you don't just solve your debt problem faster you solve a marriage problem yeah yeah but i don't know where he stands on this he might be he might be going, oh, we're not combining.

1:56:20George Kamel:And then you can get to the bottom of it. He does think it's kind of dumb that I am in debt. And I think so too. Yeah, fair enough. But the question is, you know, part of marriage is having that person who's there for you come hell or high water, you know, and that's kind of like part of the vows, like better or worse, you know, sickness and health. And probably somewhere in there, they should be saying, you know, debt or debt freedom, you know, and it's like, and it's true, you know, So just to quote Dave Ramsey, he says it, you know, when you get married, you become French and everything becomes wee wee.

1:56:53And that includes the debt. But I understand where you're coming from. When my husband and I got married, he had the majority of our debt and he felt some type of way that I was having to take on that burden, too. But I was happy to take it on because it's part of showing your commitment. It's part of showing your loyalty. And your husband is probably anxious to show you his love and loyalty.

1:57:17Thank you.

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1:58:23Well, our Ramsey Show scripture and quote of the day, Romans 15, 2 says, Our goal must be to empower others to do what is right and good for them and to bring them to spiritual maturity. Love that. Ronald Reagan said, when you can't make them see the light, make them feel the heat. OK, that's spicy, Ron. OK, Ronnie. Golly, make them feel the heat. You don't want this smoke. Let's go to Jay, who's in Houston, Texas. Hey, Jay, how can we help today? Yeah, I'm calling because I have some financial problems and some legal problems that are stressing me out and making me depressed. Oh, maybe we can help alleviate some of that.

1:59:01Tell us what's going on. Okay, I had to put out, take out a loan on my home to pay some legal bills and hire an attorney because of ongoing problems I've had with my neighbors. Okay.

1:59:17George Kamel:So are you suing your neighbors? Am I doing what? Are you in a lawsuit with your neighbors? No, I'm not in any litigation. They filed some false charges against me. And I had to hire an attorney to fight the case, which was dismissed. And I'm waiting for it to be expunged. And I'm not able to find employment until that is expunged. Because when I look for employment opportunities, when they Google me or the employers do a background check, it's coming up. Gosh. So how much did you borrow to pay the attorneys? I borrowed$25 ,000 because that was the minimum, but I had to pay the attorney$12 ,500.

1:59:57So you've still got another$12 ,000 or so that's sitting around, or did that go to something else? No, it's just sitting. It's$17 ,000.

2:00:05George Kamel:$17 ,000. Okay. And was that a home equity loan or a line of credit? Yes. It was a home equity loan. Okay. Okay. And this is still going on. It's been going on for 10 years with the neighbors. 10 years? 10 years going on constant. Just move at this point. Yeah, why not move? I cannot afford to move at all. I cannot. Do you own the property? Yes, I do. Okay. And what's the property worth? Tell us more about that. It's probably worth about close to$300 ,000. Uh-huh. And what do you owe on it? About 85, between 80 and 85. And so there's not a scenario where you could sell it, take the equity and put it down on another house in another location?

2:00:57I can't afford it because I don't have a job. So I would need to have employment to do all of that. I understand for the moment you don't have a job, and I'm going to get to that. But I'm saying in a situation where you have a job and you're able to take that equity along with your income, because that's a healthy down payment elsewhere. Yes, but I have a very, very low mortgage, and the interest rate is great. But with the market that it is now, I can't afford that. It would be too much. And I can't live in a senior citizen facility because that's triple or quadruple the mortgage payment.

2:01:32George Kamel:What were you making at work? Around$20 an hour. Okay, so about$40 ,000 a year. And is there anything you can do in the meantime, any kind of work, gig work, to supplement to make$15 or$20 an hour? Everybody's doing a background check, and that's still pending online. What's the current timeline to get it expunged? Have they told you? Well, they said October 19th it should go before the judge because I filed my own expungement. paperwork because I'm a paralegal, so I kind of know how to do that stuff. I have to wait for the judge to rule on that, whether they're going to have an expunge. Then it has to go through all of the entities that I listed that I want to be notified, so that it won't appear on background checks and government websites and different things and Google like that.

2:02:22So I'm just in a holding pattern right now. And you're living off the extra 15 or 17 from the HELOC or from the home equity loan? Well, no, I just put that on my savings. I was able to get unemployment, and I have a small Social Security.

2:02:36George Kamel:So is that covering all of your bills right now? Yeah, it does cover. Okay, so you can continue to make your mortgage payment and cover your bills without touching that$17 ,000? Yes, I can. Then I might turn around and pay that right back off. If you don't need to touch that money, whatever you didn't spend, you only spent the$12 ,500. I'd probably take the$17 ,000. If that's your only debt, I'd throw it right back on that$25 ,000 loan, get a head start on paying that off because eventually you're going to want to do that. Okay. That'll bring your debt down to$8 ,000. Is that all of your debt?

2:03:10I have a student loan, but they haven't come after me for that yet. That's about$60 ,000. $60 ,000? $60 ,000. $60 ,000. Okay, yeah, I think you're right. I think you are in a holding pattern, at least making what you were making. But in the meantime, October 19th, I mean, if you can get out there and try to do something, come up with a gig or something that you can offer, maybe yes. But it sounds like you've got at least your four walls covered. You've got money keeping this going. My biggest thing that I hear, Jay, is staying in a location that has caused you so much grief for so long. I'm depressed.

2:03:48Yeah. Yeah, I actually, I mean, you called us and I'm here on the outside. I actually do think that you can move. I look at you and I go, okay,$300 ,000 house, she only owes 85. Gosh, that's almost, you know, 200, there's$200 ,000 of equity there for you. Let's take that. Let's go put it down on something else. Yes, the interest rate is going to go up. We can't, we can't change that. But at one point you were making money and you can make money again. You're making$20 an hour. Can we up the income in some way? Right? So I don't think you're up against a corner in the way you think. I think we just need to expand our horizons a little bit.

2:04:27And it is going to feel like a major change. I don't have any retirement. I'm sorry. I don't have any retirement savings. And how old are you? Almost 70. You're almost 70. Yeah. Okay. Well, let's roll back. Cause I was listening to you sound like you're 33. Okay. 70 years old. Everybody thinks that, but no. Okay. So that's a good thing. Okay. It doesn't help chronologically. The neighbors are, can you tell me a little bit more about this? Are they going anywhere anytime soon? Or have you guys just been feuding your whole lives? It's feuding. They're very ratchet and ghetto. I don't know if you understand that.

2:05:06I understand ratchet and ghetto. 100%. They were infringed on my property lines. I had to hire a surveyor. They're building a fence on my property lines. Girl. They've been back and forth with legal issues for 10 years. None of my friends want to come visit at all because they get harassed and threatened by the neighbors and the police don't help. And that's the part, Jay, that I think about. I'm like, gosh, is that the way you want to live in your 70s? Or can you go somewhere else? Maybe you downsize a bit. And I know what I'm asking is big, but this is for you. Maybe you downsize a bit. Maybe you go to a condo or a townhouse and you spend a little bit less.

2:05:48You put down a big down payment and you still make sure that that payment is no more than 25 % of your take home. At the very least, homework for you, I would love for you to just look at what's out there. Use our calculator. We have a really great resource. It's our Ramsey Mortgage Calculator. And start plugging in some numbers because I think that you have, once you get work, I think you have more options than maybe you think. And it might be a good thing for you too to get access to some of that money and have liquidity. Maybe we can invest a chunk of it so that there's some money that's growing for you.

2:06:24But staying, I don't know, George, staying where she's at feels.

2:06:27George Kamel:Yeah, because there's a long term problem, too, of just how are you going to retire, regardless of what happens with this case. And I also think it's overblown what's happening with the background check, because a pending, you know, you didn't actually get arrested. And so, and even if you did, you weren't convicted of anything. Right. And so if there's just a pending charge, that shouldn't stop you from getting any job in the world. There's convicted criminals out there who are working and have gainful employment. So I think you need to keep doing your homework on that side and they can't discriminate based on age.

2:06:58George Kamel:And so there's work you can do and figure out what that is based on your current health, your ability to drive and do some of this gig work in the meantime, because you can replace 20 bucks an hour pretty easily in today's economy. Yeah, I think so. I mean, at 70 years old, it could be tough, but I think the biggest key is your money. Your nest egg is in your home and you've pointed to your home being in a location that's an issue. So maybe it's time to get access to that nest egg, let that money grow for you and get in a less expensive living situation, maybe a condo. And that could be the answer.

2:07:32George Kamel:One with less troublesome neighbors. Yes. Gosh, you know what? Neighbors do affect your quality of life. You got to get next to some good ones. And it's hard to choose them. Yeah. You don't want riffraff, as my parents used to call it. You don't want to live next to riffraff. All right, guys. Well, thanks for hanging out with us. remember there's ultimately only one way to financial peace and that's to walk daily with the Prince of Peace, Christ Jesus.