Develop Steady Habits That Create Lasting Wealth

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21:40Back to the phone lines we go. We've got John who's in Reno, Nevada, forever reminding me of Sister Act. What's going on, John? How can we help? Yeah, hi. If I have a question, right now, my daughter's not speaking to me because, you know, there was comments that I said about me not putting myself in debt for her to go to college. I never said I wouldn't help her. It's just, you know, I don't want to put my family too in danger for putting me in a loan. So then after that, I mean, it's been probably now a year and three months that she hasn't talked to me. And I guess my question is, I make about$185 ,000.

22:25I have$45 ,000 in debt. I still want to help her, but I just don't know how to do this or how to even explain it to her. It just got pretty ugly. Can I ask a question? I feel like for whatever reason, I'm making an assumption and I don't want to make it if I'm wrong. Is your wife involved or is this a is is it just you and her or is there a wife involved? Tell me. Tell me more about your family situation. So. So, yeah, for me. So me and my wife are willing to help out. Right. And the only thing is just one of the things that we don't try to do is put ourselves in loans. Understood. I just wanted to make sure I understood the family dynamics.

23:07When did this conversation start?

23:09George Kamel:I'm curious. Because this is like, we know that eventually someone might go to college. And then the word... It was June 2025. That's when you started the conversation. Yeah. Okay. And when is college supposed to begin? Well, she actually graduated this year and she decided to go out of state in college too. Okay. And you guys never had this conversation? We had the conversation a couple years back. But her mom and what I'm I'm not with her mom. That's what I was trying to understand. Yeah, I guess they never give me type of information or anything, you know, like to be able to clear things out.

23:52They're just like, oh, you need to pay for this. And then in that same conversation, they're like, oh, well, can you at least help for the car? And I was like, what car are we buying? So there was never really any type of information given to me other than just little bits and pieces. And then you just expected me to do it right there and then. Okay, understood. That's the family dynamic I was trying to get to. I had a sense that something, there was a separation or, you know, your wife is not in the house. Here's what I think is happening. And I could be wrong, but just by the way that you're saying your words, it sounds more like you're talking more about what you're not going to do versus talking about what you are going to do.

24:31And I would be leading the conversation with exactly what I'm going to do to help. And I think if you do that, then it'll cause them to hang out there as well and remember that from the conversation. For example, if she says, but daddy, I want to go to this school and the only way I'm going to go is I need a$30 ,000 loan. And you say, I'm not taking no$30 ,000 loan, right? That's not going to work. But if she says, but daddy, I want to go to this college. And you say, honey, I'm going to give you$15 ,000 for college. It's up to you to figure out which school you can go to where that money will go the furthest.

25:06Here are my suggestions. Do you see what I'm saying? That's a very different conversation. Now you've never said no. You've never said no. You've just said, here's what I'm saying yes to. And I think that that would go a long way because if what's happening is true, which is they're having a bunch of side conversations and they're marinating on this and maybe inflating it beyond what you've said, your best protection is to be able to say over and over, I'm giving her the$15 ,000. I'm giving her the$15 ,000. I've said I would pay up to this point for this particular school. So if you're being accused of not caring, show that you care by saying, here's a school that works.

25:45It's in my budget. If we all pool our money, we can do it like this, right? Let's solve the problem versus everybody talking about what we can't do. Yeah, and that I did try, but their thing is like, no, she needs to go here. That's what she wants to do, and that's what she's going to do. And at that point, I was like, hey, well, I'm not going to be able to do that, especially if it's out of state. And then you have to pay out-of-state fees too.

26:09George Kamel:So are you not helping at all financially right now? Yeah, so what I did was just put myself in child support and all that stuff. So I've been paying all that child support. um and that's pretty much a and when she and whenever she comes to she came to the house before you know she you know she had her own room her own place to be and i had you know told her like hey if you need anything you know come to talk to dad well not anything yeah like whoa what i meant like uh when i came to school right you know let me know and we'll talk but i don't need to be talking to your mom because it's just become such a toxic.

26:50Well, that's what I want to know.

26:51George Kamel:What is the relationship with mom versus you? And how long has it been like that? So it's been 18 years. I never married her. So I have my own family with my wife. Yeah. So, yeah, with my wife, I never married her. So I never been with her ever, ever since my kid was born. So this has just kind of been, for lack of a better word, like baby mama drama for 18 years, back and forth, back and forth. Okay, that makes a lot more sense. Now, I want to clarify just to get down to brass tacks. We understand you're not going into debt. I would agree with you. And I think George would too. We're not going into debt.

27:33I'm not signing a Parent PLUS loan. I'm not going to recommend for her to go into debt. But how much money do you plan to give her every month or every semester for college? What's the number that you have in your head? That I don't have.

27:48George Kamel:But I mean, I could come up with the number. That's what we need. Could that restart this relationship? I think if you going to her and saying, hey, I have really screwed this up and I'm so sorry. There was a lack of clarity. I did not communicate well. I communicated too late. And that's on me. What I do want to do is restart this conversation and create a plan for you to go to college debt free. And here's how much I can do right now based on my financial situation. Would that get her to perk up? I'm hoping, yeah. Because there's so much deeper here. There's a lot of relational issues. This money thing is just like one baby symptom of years and years of broken relationships.

28:30George Kamel:and I think she's now seeing this as, man, this guy hasn't been there for me relationally, and he's not even here for me financially. Well, yeah, and that's how it seems, right? And the thing is that I've always been there for her. She's stayed with me, like I tell you guys, like every weekend and stuff like that. I made sure that I went to the courts, got child support on myself, and then made sure that I had a visitation with her because I knew that we were going to try to pull her away. So I made myself, you know, available for her. It sounds like there's just everything I manipulated. There's two conflicting family dynamics.

29:09You've got a family over here who we're a no-debt family. And then there's a family on this end for her that's like, hey, whatever it takes, we're going to do it. And she's caught in the middle of that is what it sounds like. I agree with George wholeheartedly. If you come to her, because I'm going to tell you like this. my dad said to me, I'm not, when I, when I said, I want to go to the school and I need a loan, he said, I'm not doing student loans. He said to me straight up, he was like, you better get a scholarship. You better be good at sports because I'm not taking out no student loans is what he said.

29:38And I was like, okay. You know, and I remember at the time feeling a way about it because you know, you're 18, you're 17, you're 16, you're young. But on this side, I'm like, oh, thank goodness, I'm really glad that he didn't ensnare both of us. I went on and I was hardheaded and took out some loans, but at least it wasn't a Parent Plus loan and at least I didn't ensnare him in it. So I think on the flip side, longer down the line, she's going to appreciate that. But if you do what George said and you humble yourself and apologize for not starting this conversation earlier as the adult, that's going to do something to her on the inside because parents don't apologize to children enough for the mistakes that they make.

30:18And so please, please do that. And don't do it in the heat of the next conversation. You go first, call her up and get, hey, can I take you out to lunch? Can I take you out to dinner? Sit her down and go, I messed up. And here's how I did it. And I think that's going to change the whole landscape from us going forward. Yeah, no, I agree. Cool, cool, cool. Oh, man.

30:43George Kamel:Well, it's a great wake-up call to all the parents out there. Do not start this conversation as your child is touring schools. Start this conversation at 12, at 14, at 15, so there's no surprises. Your kid knows exactly where you stand. Hey, I will cover four years at an in-state school. That's right. That's what I'm willing to cover. and if you can't if you don't have the money that's okay as long as you have set the expectation I don't have the money for college you're gonna have to get a job you're gonna have to do work stay you're gonna have to go to community college as long as you set the expectation that's all we can really ask of you

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32:47All right, back to the phone lines we go where we have Timmy who is in Dallas, Texas. Hey, Timmy, how can George and I help you out today? Hey, good afternoon. Hey, shout out to Smart Money Happy Hour. Hey. Go go hard. Represent. Baby, baby. And Dre, thank you. Keep it going. Thank you for hope. You're welcome. It's Friday. I know you guys aren't going to see this until later, but it's Friday, so I feel like I'm on a different level. We're vibing. How can we help, Timmy? All right. So my wife did call last week about our mobile home. So we owed about$80 ,000. We owe$98 ,000. Okay. I think I remember this.

33:27We finally got an appraisal. It was Paola in Dallas, Texas. But we finally got an appraisal and the difference is$33 ,000.

33:41George Kamel:That's what it's worth? I know. You're saying it's worth$65 ,000? $65 ,000. Okay. $65 ,000, yes. Okay. So you're$33 ,000 upside down? I know. Yes, yes. So that's fun. So we're in baby step three. And so we have right now saved up, I want to say$2 ,000. And so now it's like, which way do I go? I want to sell this thing like Dave said last time. I'm financially illiterate. I just don't know what to do. Yeah, I would. This is going down every single day that you wait. For those who didn't hear that episode yet, your wife called in. This was something that was really keeping you guys stuck. And we suggested that you sell it right away, get it appraised, sell it right away.

34:30So you've got the appraisal. And the way to get from upside down on this is you've got to get a loan for the difference. and as much fun as that's not going to be, it's better to have$33 ,000 of debt than to have$98 ,000 of debt. That's just creating a bigger gap day by day by day, right? Basically going up. So that's what I would do. I would try to go down to the credit union if you can, try to find something with as low as, you know, lowest interest rate as you can. But the key is we've got to get out of this mobile home that's going down. Now, tell me about the land, because I don't remember.

35:04Do you guys own the land or where is it? Unfortunately, we do just rent out the land. And so each year it just keeps increasing. So right now we're at$9.50. Oh, man, we got to get out of this. Yeah. Yeah. And just find some place to rent for a while and just kind of clear your minds of this thing that did not go well for you.

35:26George Kamel:Yeah. How much money do you guys have right now? Finding y 'all. So late in the game. Say that one more time. How much money do you guys have right now to your name?

35:38I would say in savings checking, just$3 ,000.

35:42George Kamel:Okay, because I'm wondering, I'm guessing the time it would take you to save up the gap, it would be a year or two from now, right? Correct, correct. To save up$33 ,000. What's your current household income? Current household income is$80 ,000. Okay, and what's your monthly expenses? How much does that add up to? to cover everything? 2 ,700. Okay. So there should be some margin at the end of each month right now, right? Yes. Yes, there is. Okay. So if you guys are taking home 60 and spending 30, you could save up 30 grand in a year. Again, the value is going to go down. So the gap is only going to grow at this rate because the appraisal is only going to come back the same or lower next time you do it.

36:25Yeah. I mean, if you take out that loan for the difference and then you get very aggressive about paying off that 33 ,000. You know, that's, that's the choice you have to make. I'd hope that you could do that, you know, within the year as well, if you got extremely aggressive. So it's, it's your choice, but I, if I were in your shoes today, I think I'd call it and get out of there. Have you looked at rent in your area?

36:52Unfortunately, I think rent's pretty high in my area. So it's going to be around $1 ,700 for a two-bedroom just because I got two daughters. If I remember correctly, didn't you tell me that the interest rate on this thing is crazy, so your payment's super high?

37:07George Kamel:Yeah,$8.95, yeah. Okay, what are you paying every month for it? The mortgage alone is$1 ,100. Uh-huh. But then the rental. And then plus the lot rent, yeah,$950. So yeah, it's going to be cheaper for you to rent. I mean, you'll have to pay, right? You have the$33 ,000 loan, so you'll have to put some margin towards that. But you're putting two grand towards housing already, is what we're saying. Yeah, okay. And so putting$2 ,000 towards something that helps you build for your future is way better than something that's going down in value, like a vehicle. So this is not going to be fun. And I don't know how easy it's going to be to get a loan for the difference on this.

37:48George Kamel:but that's your option other than selling stuff aggressively, saving up as much income as you can. But again, that could be a year from now before you can get out of this. Do your due diligence, see what you can find. And as a last resort, yeah, go ahead and cash flow. But when we say cash flow, we don't mean like doop-doop-doop-doop. We mean everybody's picking up second and third jobs, and we are attacking this like a virus. Like we're going crazy on it, okay? We want you to get out of this for good. Shelly is in Atlanta, Georgia. Shelly, how can we help today? Thank you for taking my call. I've been listening for quite a while now, and I really appreciate everything you guys do.

38:30You two are my favorite.

38:32George Kamel:Thank you. Anyways, my question is, my husband was diagnosed with dementia about a year and a half ago. He's been doing treatments every two weeks. We have very expensive insurance, but it is covering it, so that's a good thing. He's doing quite well. Good. He's 77, and he works part-time still, believe it or not. Wow. Just one day a week, but it's just something to do, you know? Yeah. My question is, I'm trying to save up, fill up our emergency funds, and we're completely debt-free. House is paid off. Everything is done. I'm 65, and I still work full-time. My question is, do I keep putting money into the emergency fund to get to the recommended 12 months in a situation like this?

39:22That's what I heard on Ramsey. Or do I use some of that money to try to bring him to some of his siblings? He has six siblings, and they're kind of spread out. Four of them are coming for my son's wedding next week, but there's still two that we haven't seen in a while. because I feel like, you know, we're getting to that point in time where I feel guilty that he's not seeing them. Are the siblings that he hasn't seen that are not coming for the wedding, are they older? Like, is it hard for them to get out? Their ages range from like 67 to 80. Okay. And actually the 80-year-old's coming in from New York.

40:04But there's one that's in New Hampshire, and he's like in his late 70s as well. And he's not able to travel? Correct. And then we have one that's in Lake Charles, Louisiana, but he's a little bit younger. But they're just busy. Listen, you have no debt. You've paid off all your debt. You paid off your mortgage as well. Yeah, you do need to save up an emergency fund. But I think that you guys have worked hard and earned the right to, you know, take a trip to New Hampshire to see a family member or whatnot. So I would not let that stop you. What are you earning? You said you're still working full time.

40:40What do you make? I just do a little job. It's about 45. And then with his Social Security and his job, between all of it, it's like 77. Okay. Okay. What is his Social Security? I want to know monthly what you guys are bringing in. um he is bringing in 27 47 okay and um mine after everything is taken out probably is around three 26 okay okay and there's no nest egg uh 300 300 000 i would be looking of course for the

41:20George Kamel:short-term plan, which is, yes, we need an emergency fund. You can go six months or more. You might just have a sinking fund in the budget for medical expenses. And then we need a long-term plan because if you're looking at, you know, dementia care, it could be 50 to 100 ,000 a year, right? Right. And that's, that's why, that's what stops me from spending money. Like very frugal. We don't do much. And you should be. But we had, we had, we had thought about getting long-term care. Well, of course we never did it. Now we can't because of him, you know, with his diagnosis, you can't get the insurance.

41:52Yeah.

41:52George Kamel:Yeah. So, but, but as far as, so on one hand you're saying, go ahead and just keep. Yeah. Keep funding it and then start a sinking fund and don't feel guilty for spending along the way. You still have to live your life. You still need to see family. And the best thing you can do is make a game plan for what this looks like long-term, become an expert on this health insurance plan. What does it cover? What doesn't it cover? Have the full out-of-pocket max ready to go. That's all the things you can do in a situation this difficult, and we are rooting for him. Sounds like he's doing good. Let's hope it stays that way.

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43:55Welcome back to The Ramsey Show in the Fairwinds Credit Union studio. I'm Jade, this is George, and we got T, who's in Orlando, Florida, on the line. Hey, T, what's up? Hi, guys. How are you? Doing great. How can we help today? Okay, I'll try to keep it as free as possible. So my husband and I are currently working to pay off debt, and we're trying to follow, like, the Dave Ramsey plan as far as the baby steps, which we have not started because we're in a difficult situation and kind of need help with a realistic plan with our finances. So we both have loans for paying off. My husband, he bought from a loan company, several, and he is paying those balances, and I've also borrowed to help pay off his part of the rent, which was originally supposed to be for my car payment.

44:41And because we're focusing on making those payments, our cash flow is extremely tight. So in addition, I'm helping cover a portion of his rent obligations while he's paying off his loan, which has caused me to fall behind. I'm sorry, what's the rent for? Are you living in different places? No, we live in an apartment, same apartment complex. And you're married? Yes. What do you mean when you say his portion of the rent? Does he owe from another? yeah he no not from another we split the rent in half but he hasn't been making his portion so you covered it with debt yeah because i i come up short because i have my bills that i'm paying too and if i don't have enough i had to make the non-smart decision how long have you been married um two years will be on monday two years okay happy anniversary and you said you mentioned children how many total no children oh i thought i heard you mentioned somebody okay so what's the

45:41George Kamel:rent the rent is about 19 16 okay and what do you guys each make uh i make about uh 15 every two weeks and he makes about he gets paid every week so about 700 every week okay so you're both bringing in about three grand a month yeah about six grand total yeah okay so the rent is about a third of your income which is a little high but it's not broken why did he get behind on rent that's what i've been trying to figure out too um i did ask him he did mention borrowing from like five different other companies that he's paying back. Oh, boy. And I act how when he gets paid every week. And I didn't really get a clear answer on that part.

46:30George Kamel:Well, this is, to you know this, this is a huge marriage issue more than it is a financial issue. There is zero transparency, zero accountability, zero acting like a married couple. You just, you got shacked up with a bad roommate. Have either of you expressed the interest in wanting to kind of combine money so that everything is transparent and it's just one big pool? actually I did that was me and what did he say oh it's kind of hesitant on it um he didn't really like the idea of like even though it's coming his money is coming in through his account mine and my account he didn't want to combine did he say why no is it shame is it fear is it baggage I think we need to get to the root of that in order to solve this because I don't see a path forward if you're going to continue to borrow on his behalf because he's behind on rent and he won't tell you why.

47:21George Kamel:This is crazy. It's very tangled up. It's a very tangled up situation. Because you can't control him. You can't change him. And so if he continues to make bad decisions, it's going to affect you, right? Yeah. In some way, shape, or form. And I hope you don't take on any more debt for him. Can you promise me that? No. I'm going to retain my back. I just have two more payments left and I'll be done. Okay. But it just kind of sucks. What's your total debt? What's his total debt? I have my car that I'm paying off. I have about$6 ,000 left on it. I just have also my credit card, which is about$800 and something left on it.

48:02And I just have paying off my car parts, which is about a little over$2 ,000 left. And then he just has the, I'll say about$1 ,500 left for him.

48:14George Kamel:What's that debt? it's between those five loan companies. Okay. What are these loan companies? Some type of app he found on his phone. Okay, I thought so. Like these short-term, it's basically payday loans, but make it digital. Which is even worse. Something's going on here. I'm going to break up the money talk just for a minute because I want to go back to the marriage talk. I've been married for almost 20 years. It'll be 20 years next year with my husband. And one of the reasons you get married is, yes, you want a level of commitment. You want to know, like, this is my person. But a bigger part of that is you see the ability to build something bigger than yourselves together over time.

49:00And there's a shared vision that's there. And you spend the years of your marriage aligning on that vision and going towards it together. That's one of the joys. That's why you have children. That's why you buy a house. Like those are the, you're just creating this life together that you both visualize and both agree on and both believe in it so much that you work hard to achieve it. And what I hear right now, and this is no, this is not meant for shame or indictment or anything like that. It's just you called us and I'm letting you know what I observed because it's still really early and still very, very fixable.

49:32What I hear right now is two people who agreed to live together, but that's kind of it. And so you've got goals and he's got goals and you spend your money like this and he spends his money like that. And I ain't got to tell you what I do and she don't have to tell me what she did. Right. And it will be impossible to build anything like that. And I think you're starting to butt up against that. You're starting to feel that, which is why you suggested, hey, let's put the money together. That's thing one. Thing two, I want to mention because it's just the truth. And again, it's not to promote fear or shame or anything like that.

50:08But when people want to hide, it's generally because they have something to hide. Most people, part of the purpose of entering marriage is you want to be known. You want somebody to see you and know you and get to accept all the facets of you. And this person is hiding something that they don't want you to see because they're either ashamed of it, they don't think you'll accept it. Do you see what I'm saying? So that's what I'm hearing. I'm not a counselor nor a therapist. I'm just a person who's been in a relationship with the same guy for almost 20 years. So I would really dig into that and I would really do it out of love, not out of I'm angry at you or I'm pointing the finger at you.

50:51But man, I love you and I chose you for a reason. And I just feel like there's something here that's between us that's between us. It's causing a rift and I don't like that. And I would love to get to the point where we know each other and we have nothing to hide. And if we have to see a counselor to make that happen, I'm all in with this, right? Approach it from love and see what happens. Okay, now we can get to the numbers.

51:14George Kamel:Well, the good news is you can attack your dad all you want. You can get rid of it. And you're right. Right. It's not like you have$50 ,000 of debt here. The problem is, unless we address the root problem, you're going to go further into debt. You're going to get evicted eventually if this continues. Or like Jade said, you have this conversation, you restart what this marriage looks like. Well, now we have some unity. We have some vision. We have transparency, accountability. Now we can make a plan for$6 ,000 coming in instead of my$3 ,000 and his$2 ,800. I don't know what he's doing and he's not paying his share of the bills.

51:46George Kamel:This is not working. And so tonight you have a new marriage. It's going to be a come to Jesus conversation. Catch him in a good moment. Don't come out attacking him. Yeah. Don't do it in the heat of an argument. It's not you're the problem and I'm doing perfect. It's, hey, we've been really in miles apart. We are in different galaxies right now. And I love you. I want a different kind of marriage and I want a different financial future. Ooh, I love that. Listen, when you sense a red, and this is for anybody listening, when you sense a red flag, Don't ignore it. Go headstrong into it. Ten toes deep.

52:21Get right into it and get to the root of that problem.

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53:57Well, investing can be confusing and overwhelming. So lucky for you, we created a two-night virtual event that gives you a simple strategy that you can feel confident in. George, you and Dave paired up on this, and I'm really excited. It's going to be a two-night Investing Essentials event, September 1st through the 2nd. It's the only place that Dave unpacks his playbook for investing and wealth planning. Plus, this year you guys added some new content?

54:24George Kamel:Yeah, so we did real estate investing on night two. We're going to shove that into night one and make night two all about wealth planning. I like that. So we're going to talk about legacy, navigating wills, insurance, taxes, how to keep the government's hands off of all the wealth you've built. Great. How to pass it on to your kids without destroying their life. all of the things that will really affect a lot of people who are in that baby step four through seven phase. And Dave, we go super nerdy. So if you've ever been like, man, I wish they'd go deeper. I wish we'd get a little more inside baseball.

54:52George Kamel:Listen, Dave will have some formulas that will have. He's like beautiful mind out there. It's like Goodwill hunting to see Dave on the board crunching the numbers. So check it out. Tickets start at$199. Get yours today, ramsaysolutions.com slash events, or click the link in the show notes if you're listening on podcast or YouTube. Yeah, Stella is in Rochester, New York. Stella, how can we help you? Well, I'm actually looking for some advice on house investing. My husband and I have been married for a few years. We're out of debt. We're trying to save up our down payment. And someone close to us who's done really well investing in real estate is giving us some very well-meaning advice, but something sounds fishy to me and I can't quite figure out where the problem is.

55:41Okay. So you're getting fishy advice. You're on babies. You've paid off all the debt. Do you have a personal residence or this is strictly for, you know, wealth building purposes? We're renting right now. We're out of debt. We have our emergency fund and we're working on a down payment. So I guess you could say baby steps three and a half. Love that. 3B is what we call it, which is right on. Are you guys investing at all or you're just solely saving up? We're right on that tipping point between having the six month emergency fund and starting to invest. Love that. OK, so tell us about the friend is telling us, oh, you know, this is a way that you could, you know, get in on the ground level and grow really fast and, you know, win.

56:26And what is that? Tell us the details. What are they saying? So he was looking at a rental property in Florida, which was$1.2 million, which we could never afford. But after a hurricane, it's now$600 ,000. So he says he or we could buy it, put in$200 ,000 in renovations, and then it would be back to that$1.2 million value. So boom, you just made$600 ,000. Now you can take out a home equity loan on that and then use it to buy another house and do the same thing. So you just made magic money. You don't have to pay income taxes. And it's win-win. What could possibly go wrong? There's where you lost me.

57:08So if you had said, hey, here's a property that needs some work and some improvements. And, you know, I can get it for cheaper because it needs work and improvements. And I'm going to purchase it and do that. I'm all for that. But there's several parts in this, George. I know you heard it, too, that are just really.

57:24George Kamel:It just sounded like a TikTok came to life, and they've been watching a whole lot of it, and maybe they tried it, maybe it has worked so far. That's not the whole story here. Yeah. And I agree there's something fishy. That's kind of what's worrying me. Are they profiting off of this? I don't understand how you're – it seems like your friends are benefiting if you do this. Well – Do they do this? They do this. They've done well for themselves, but I'm starting to have wondering if they're actually in the plus or if they just owe more than they're actually worth. And you'll never know. And you'll never know.

58:01You'll never know. But what I know, unless you told us not the truth, which is okay because you don't have to tell us where you are, but my screen says you're in New York and this property is in Florida. So they're saying, hey, go in other states where you can't even really see the property. You don't even know the market, and let's get involved over there. You got to pay a property manager. This person is somebody who cares about us very deeply. They live in another state, and they're snowbirds. So this was a property he was looking at, and then he was trying to give us advice on we could do something similar.

58:34Why don't they buy it? And in my brain, he was talking about it. I don't remember what decision he made. He was just trying to throw you a number. I think you let them have this one.

58:41George Kamel:So I appreciate the offer. This is all you guys. We're working on our own financial plan, and we're going to go slow, and we're okay with that. And by the way— We're in the Rochester area. There's a much lower house that we can actually afford, and we do this. And it's lost its value. We put in some amount. It doubles in value. Where does—so what goes wrong when he starts stacking those HELOCs? What's the error that happens there? You're stacking debt on top of debt on top of debt. So every rung of this ladder that he's describing is borrowed money tied to your home. So one bad contractor bid, one vacant month, one rate hike, one Florida insurance premium hike, and you're underwater.

59:21George Kamel:And the whole house of cards comes tumbling down. And they get real quiet when that part happens, and you don't hear from them. You only hear from them when things are going really well and they're really loud and they want you to get in on this. So this is like an MLM. It's like cryptocurrency. Someone just got a little too excited, and they want everyone in on it. So I don't know if they personally benefit or if they're just real excited because it worked for them and they went, wow, free money. But you guys do not need this level of risk in your life. And it violates several of our real estate principles.

59:49George Kamel:Number one is pay cash for any investment property because of the risk that's involved. It's hard. You can do the formula and you can represent the risk. Nobody does that. People who are into real estate investing, generally, their risk meter in their brain is broken. Every extra dollar they want to put into a house to reinvest, to get a HELOC, to do it again, do it again. And the truth is, I love this proverb, 1311, wealth gained hastily will dwindle. Whoever gathers little by little will increase it. So if it feels like your wealth is being built too slow, you're on the right track. Okay. And I think you guys need to clarify, what is your goal?

1:00:27Is your goal today to have a, say, for a house that's yours and yours alone and it's just your primary residence? Is that your first goal? Or is your first goal to be Scrooge McDuck and have a real estate empire? I think just from listening to you, the first goal, you've been walking the baby steps. So my guess is your first goal here is we just want a house and we want something to call our own and we want to do it in a smart way. And if you do that, that will set you up to build wealth like George is describing and then be able to pay cash for real estate with extra margin. But I would not ever sacrifice the American dream of being able to purchase a home and being able to pay off that home and live in peace for, you know, some sort of real estate mogul's idea of how to really just ruin your life with debt and helix.

1:01:19Yeah.

1:01:20George Kamel:I mean, this is Dave Ramsey's origin story. Absolutely. He built a$4 million real estate portfolio and borrowed money at age 26, and he lost it all when the bank called his notes. and it can happen fast. And so it's a lot of risk that is not represented in these conversations. And for those reasons, I would very politely say, no, thank you. We're going to live our life. We got other financial plans, but thank you for letting us know about this quote opportunity. Absolutely. Which that's my trigger word, Jade. Anytime someone, if you call into the show and you say, um, hi, we have an opportunity.

1:01:52George Kamel:Whatever comes next is about to be the worst decision you've ever made. It's never good. It's never good. It's never good to have an opportunity. No one ever says, hey, we have the opportunity to purchase a house really peacefully with 30 % down. It's always, we have an opportunity to do zero down on this home and start with zero equity and be in a really risky financial position. Yeah, it's never good. And what we teach, it's very simple to understand. Some might say that it's boring because it doesn't have a lot of hoops to jump through and it's not a lot of bells and whistles. It doesn't make for a great TikTok when we say, hey, save up, pay off your own house first, then save up and pay cash for any investment real estate property.

1:02:32George Kamel:I'd get zero likes on that video. And while you're at it, don't borrow against your current mortgage because we actually want you to gain that equity. We like the idea of you having equity and money in your house. Yeah, versus putting your house on the block, variable interest rates. I mean, it's just a credit card attached to your house. Yeah, absolutely. That's what a HELOC is. Absolutely. And people make it sound like it's some wealth hack that everyone knows about and does except for you. Yeah. And then when you're ready to sell that piece of property and you're thinking, oh, here's my payday.

1:02:58Now you've got that HELOC hanging over that. It's like, oh, I forgot about that. I still owe$50 ,000 over there or what have you. So the way that we teach the whole purpose, guys, is we want your home to be a blessing and not a burden. When we tell you things like the 25 % rule, your mortgage should be no more than 25 % of your take-home pay after taxes. It's so that you feel good and you can actually enjoy your home. You're not house poor. Or when we tell you not to borrow against your home on HELOCs or home equity loans, it's so that your wealth that you build is your wealth. And when the time comes for you to upgrade in-house, you have all of that at your disposal.

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1:05:08The Ramsey Show Question of the Day is brought to you by WhyRefi. If you've fallen behind on your private student loans and don't know where to turn, Y-Refi works with borrowers, other lenders won't, and helps explore low fixed rate refinancing options. Go to YRefi.com slash Ramsey. That's the letter Y-R-E-F-Y dot com slash Ramsey. Remember, it may not be available in all states. George.

1:05:30George Kamel:Today's question comes from Isaac in Indiana. Our primary home is our only debt with a$300 ,000 mortgage. I have roughly$400 ,000 in mutual funds and a little over$300 ,000 invested in precious metals. Should I sell my metals and put the funds towards my primary mortgage? I know what you're going to say, but it's a big struggle for me. My initial investment in them was only$150 ,000, and my gut says to wait until there's enough to pay off the mortgage completely and cover capital gains. But waiting is slowing down our investing more for retirement. Kick me in the pants with your wisdom. Wow. Wow.

1:06:05George Kamel:Well, that's the first time I've heard that. I like that line though. Yeah. I might use that. Gladly. Wow. Gladly, sir. So he's got, I don't know if the, it sounds like the mutual funds are non-retirement, the 400 ,000. Right. On top of the 300 ,000 in precious metals. I don't know why it's sentimental to him, but he said his initial, it's more about the taxes. I think he's scared of the tax hit more than anything else. And I think he knows what we'd say about like commodities. I think that's why he's also looking there and not looking at the mutual funds. Yeah, if you're going, should I use the mutual funds or the precious metals?

1:06:39George Kamel:I would personally use the precious metals. I don't know what apocalypse is going to help you survive with your bars of gold, Scrooge McDuck style. But a paid-for house, that's what you're really trading for. Would I rather have a paid-for house or would I rather have$300 ,000 in gold and silver? I would rather have a paid-for house personally. Indeed. And so, yes, you'll have$150 ,000. That was the growth. you'll have capital gains tax at your rate. It may be 15 % of that. And so you're talking about really to pay off the house, you're going to have a tax of 22 grand to pay. Now, if you are debt free with an emergency fund and savings, you could cover that.

1:07:19George Kamel:Or what I would do is just pull from the mutual funds. Pull 22 grand from mutual funds to cover the taxes when tax time comes due and enjoy your freed up mortgage payment. Small price to pay to have a paid for mortgage, I think,$22 ,000. Do the math on this. Take that mortgage payment, the principal and interest, pop it into an investment calculator for the rest of your life and say, if I invested that, now we're talking, there's a million bucks on the other side of paying off this mortgage. I'll take it. I like it. Yeah. Or just thinking about if you didn't pay off the mortgage, what you're paying in interest all of that time, you're going to pay well over$22 ,000.

1:07:57George Kamel:Any way you slice it. We can do the math all day long, but this is more emotional than anything. It's just a big, big chunk of money. It is. And there's something physical that you're letting go of to get rid of these precious metals. I understand it. Well, that kick in the pants wasn't so bad. Let's go to Elizabeth, who's in Nashville, Tennessee, right in our backyard. Hey, Elizabeth. Hey, how are you doing? Doing good. How can George and I help? I'm reaching out because I just found you guys literally within the last two months and And my husband and I are in$189 ,000 worth of debt. And I currently work in AP and wondering if I should continue to get my accounting degree or just get this debt paid off.

1:08:42George Kamel:What kind of debt is the$189 ,000? It's$150 ,000 in student loans between my husband and myself. He got his master's degree. And then I, when I was younger, was stupid and went to school twice and dropped out. and then it's$8 ,000 in a car,$4 ,500 with two credit cards, and then$3 ,000 for the vet. Okay. And how much longer do you have if you continued school? 48 credits. That sounds like a lot of credits. So it's a couple years? Yes. Are you currently taking out student loans to pay, or how are you cash flowing? I was taking out student loans, but we just had a two-month-old. And so I stopped school while I was pregnant because it was very difficult.

1:09:35Right. So you haven't restarted school yet. I haven't restarted, so I'm trying to figure out. I do think you need to because you're not – if you told me you were paying cash, we'd be having maybe a slightly different discussion. but if you're calling me saying debt is the problem and I'm currently borrowing while I know it's the problem, you can't solve a problem while simultaneously creating it. And if we know debt is the problem, we have to stop borrowing money. That is the first and foremost step that you have to make when you decide, hey, I'm gonna get my life right with this money. Gotta start borrowing money, that's thing one.

1:10:11Thing two is we'd say, okay, now we gotta get on a budget and thing three is now we're gonna start to work this thing through the baby steps, which is the method of teaching that we have to help people break free from debt and build wealth ultimately over time. Are you familiar with the baby steps? Yes. We started a Financial Peace University class. Excellent. And we're trying to get our income up. And between our child doesn't start daycare for another month. So when one's not with baby, we're driving for Lyft. But then we're putting that on our car and we're trying to make more income, but we just, we don't know where to begin.

1:10:53George Kamel:What's your household income now? It's$120 ,000 gross. Our take-home right now is$6 ,200. Okay. Are either of you investing right now? We stopped, actually both stopped our 401k last night. Okay. Very good. Because I'm wondering why you're only taking home$74 ,000 out of$120 ,000. $50 ,000 in taxes. It's crazy. He's a high school teacher in the Metro School District, and they are on a 10-month contract, so they were withdrawing money for the summer, which we adopted that last night, too. Okay, so hopefully that take-home pay goes up. And then he can get something for the summer to cover those summer months?

1:11:36Yes. A side job? This year he's the one staying home with the baby to prevent that additional daycare from kicking in earlier.

1:11:42George Kamel:Got it. And how much are you making personally? $55 ,000. And what would you be making if you continued this program? I could go up to$100 ,000. But that's not immediate? No, it wouldn't be immediate. That's sort of like this is where this could go. So year one, could you be making$65 ,000? Yes. Okay. I'm looking at the ROI of this because I'm scared we're going to fast forward if you continued this school and you're going to be$250 ,000 in debt now with a toddler trying to clean this up, making only $10 ,000 more, which is, you're getting like six, 700 bucks extra in your paychecks. So that's my fear.

1:12:25George Kamel:And so the other side of this is if we pause school, we try to get our core income up without going further into debt, we clean this mess up for the next couple of years at least. Now we can start from a place of peace, a place of strength instead of desperation. Yeah. These student loans, Are you currently making payments or are they in forbearance or deferment? We're currently making payments on them. We did do the income-based one because it was$1 ,500 a month, which we couldn't afford that with baby and everything. Okay. So the payments got lowered, but it stresses me out that the interest is now higher than our payment that we're making.

1:13:02That's right.

1:13:03George Kamel:You make less progress because you just lowered the payment. Yeah. And that's the picture I want to paint just to make sure you guys understand what's at stake here. I would never just say, stop going to school without a really good reason. And the really good reason is the longer you wait to attack this$150 ,000 student loans. I mean, you can look up in 10 years and instead of it being$150 ,000, it's closer to$200 ,000, right? And so I don't want that to be the case. I want you guys to really do a complete 180 on what you've been doing. You've been focused, obviously, both of you on your careers.

1:13:37That means school. That means education. You focus on starting a family. Now I want you to focus on we are paying off debt. We are eat, sleeping, and breathing debt payments, right? That's all we're doing. We're working so many extra jobs. We are leaning on friends and family to watch the baby because you've got to go out and hit your shift, right? That's what's going to be taking place. and I'm just warning you up front, it's not fun, but the outcome is totally, totally worth it. If you guys can really get on the same page of this and say, okay, here's what we're doing. Here's what I can do. Here's what you can do.

1:14:16Here's what we're cutting back. And I'd start with that vet bill, minimum payments on everything. And how quickly can you get$3 ,000 to get the vet out of your life?

1:14:25George Kamel:I like this plan, baby steps, one little movement at a time. and eventually you start gaining that momentum.

1:15:00Okay, guys, let me ask you something.

1:15:01George Kamel:What would it take for you to switch your bank? Because if you're still earning next to nothing on your savings, you need to check out Fairwinds Credit Union. And I know what you're thinking, it might sound like a hassle. Moving your direct deposit, updating bills, getting a new debit card, feels like a lot. But here's what most people don't realize. Staying where you are could be costing you hundreds of dollars every year. Y 'all, the average savings account pays less than half a percent. So let's say, for example, you've got$20 ,000 saved. you might earn around$70 a year. But with a Fairwinds high-yield savings account earning 3 % APY or more, that same money could earn you over$600.

1:15:42And that's real money that you can use towards the baby steps. So don't let temporary comfort keep you stuck. Check out the Smart Bundle from Fairwinds Credit Union. You get a high-yield savings account, a no-fee checking account, and the Ramsey Be Weird debit card.

1:15:57George Kamel:Go to fairwinds.org slash Ramsey to learn more and make the switch today. That's fairwinds.org slash Ramsey, insured by the NCUA.

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1:16:51You remember that? How old do you think I am? I'm sorry. Not as old as me, apparently. Austin is a, thank you, Will Rudder. He knows what I'm talking about in the booth. Austin is in Roanoke, Virginia. What's going on, Austin? Hey, Jaden, George, what's up? Doing good. I just aged myself. Help me feel better. Let us solve your problem. Okay, so here we go. So I'm a 26-year-old pharmacy student. I'm going into my third year. I have about$290 ,000 in a brokerage account and an inherited IRA. I've been taking out student loans for the first two years, which has accrued to about$100 ,000 in debt. I was wondering if I should cash out my brokerage and cash flow the rest of my schooling.

1:17:39Okay, let me make sure I've got this straight. So the$290 ,000, part of it is in a brokerage and part of it is in an inherited IRA? Yeah, that's right. I got about$158 ,000 in a brokerage and the inherited IRA is about$128 ,000. Okay. And the inherited IRA, how much are you required to pull out every year? My RMD that I took out last year was about$20 ,000, but the RMD, I think it's around$5 ,000.

1:18:08George Kamel:Okay. So you took out more? Yes, for tax reasons. Wow. Well, I would definitely get rid of this debt. You've got the money. What's the brokerage account being used for? What are you investing in that? um it's it's uh through an investment group that was recommended by a family friend um so it's just kind of it's in there and i've just been watching it grow and i logged into my um financial aid provider today and saw that i just crossed a hundred thousand dollars in debt and i was like oh no wow well here's the thing i would think through it's taxes so the brokerage account and the inherited ira have very different tax treatments when you take money out of that inherited IRA, it's taxed as ordinary income.

1:18:48George Kamel:So whatever your tax bracket is, let's say that's 22%. While the brokerage account, if you have a long-term capital gains, you've held those assets for more than a year. Well, now that could be 15%. So you're going to take a much smaller hit by taking the money out of the brokerage account. So that's the part I would look at. My guess is the brokerage account is going to be your best bet to knock out that 100K and I would absolutely do it. Okay. And for the rest of my like tuition, I have two years left. Would you recommend just cash flowing that? Oh, absolutely. Yeah. I mean, and you've got the$5 ,000 that's going to come out of the inherited IRA, whether you like it or not.

1:19:25Yeah. You got to draw down the IRA.

1:19:26George Kamel:So that kind of becomes your cashflow school money, right? Yeah, it could. I mean, tuition is like 40 grand a year and I've been paying, I haven't been taking the full amount of loans. I've been paying for half and loaning the minimal amount that financial aid will let me take out. I would just avoid loans altogether in the future. So pay off the ones you have and then cash flow the rest using the inherited IRA and then even part of the brokerage if you have to. Because coming out of school, making good money with no debt, it's going to put you in a very different place financially. You're going to have so many more options with all that margin coming in versus your friends who are in school graduating with 250 grand in debt.

1:20:07Right.

1:20:08George Kamel:Now they have to live over here. They have to work over here. And so that's what happens. Debt free equals margin options flexibility. And I understand you can make the case that, well, if I leave it invested, it could turn into this. You're going to be just fine at your age. If you start investing with no debt, your investing rate is going to be significantly higher than your peers. Yeah, absolutely. How much school is left? Two years, so about$80 ,000 worth of toys and left. Oh, great. And I'd be working hard, too. I'd be working hard to cash flow as much as I can so that you don't have to pull as much off.

1:20:40But I would consider this a college fund and thank whoever. Yeah.

1:20:44George Kamel:Who left this for you? My grandma left this to me. I'm very blessed. What a legacy. I think she'd be smiling upon you, seeing you graduate debt-free, sharp young man, whole life ahead of him without debt. I mean, because now you can do the same for your grandkids. Exactly. A good man leaves an inheritance to his children's children, the Bible says, and I love that. That's right. Because that's future thinking. You stop thinking about yourself as much and go, what am I doing for the next generation and the ones beyond that? If you can start your young adult life with no debt, you are significantly ahead.

1:21:18George Kamel:It's like a wealth cheat code. It's a cheat code. I mean, because you're not going to spend the average person that we find around here who starts working the baby steps because they have debt. It's taken them one and a half to two years. That's on average. That means there's people who it takes a lot longer and there's people who takes a little bit less. But to not have to spend the first two to three years of your life cleaning up a mess and getting on financial footing, but to just be able to accelerate forward. You become a homeowner faster. You're going to build wealth faster. You're going to be able to retire earlier than all of your peers.

1:21:49George Kamel:Yeah. I like it. If I think about that, I might be crying on the couch about how much time it took to right the wrongs. If I was debt free at 23, what could have been? Oh, boy. Is it Kira? Kyra is in Great Falls, Montana. Kyra, did I get it right? It's Kyra. Yes. Second time. Okay. How can we help you? Okay. So my question is about renting a car with a debit card. I travel for work a couple times a year, and I've never had a problem with it up until the last couple months. I went to rent a car, and they were like, sorry, you don't pass the credit check. We can't rent you this car. Thankfully, I had my mom traveling with me, so she was able to rent it because she had a credit card.

1:22:39But, you know, they basically told me there was no way around it. They were not going to rent me a car because I did not have a credit card. Was it because your return ticket wasn't to the same destination? Because I know that they will put up a stink about that. no so i showed them my return flights i you know did the 500 um the pot or hold on my card all that stuff and they asked me for my social security number i gave it to them and they came back with a little piece of paper that said my credit score was four so you know we haven't had Is that true? I don't know. Because you don't borrow money.

1:23:20Because we haven't had credit cards for six years. We have a paid for home. Wow. Who was it? We don't have any vehicles. Yeah, you want to shout them out? Yeah, shout them out. Who was this wonderful credit card company that did you wrong?

1:23:31George Kamel:The rental car company. Rental car, yeah. Yeah, rental car. It was Hertz. Hertz so good. It happened back in April. And then my husband and I actually got pre-approved for a mortgage so that we can move. And we told them that they were going to have to do manual underwriting. And I told them about my rental car experience and how my credit score was for and all this stuff. And they actually came back to us and they were like, well, your husband doesn't have a credit score, but you have a great one. So we can actually approve you for this mortgage because your credit score is so great. I don't know how.

1:24:05Wow. I would pull your credit report to get to the bottom of it. later, yeah, I went to rent a car again about two weeks later. Same thing. They wouldn't rent it to me because I didn't pass the credit check. That's really interesting. I would want to make sure, first off, I do want to clarify that a zero credit score is just as good as a good credit score. But if you have anything that's hanging around open that is causing that to reflect as just a low credit score, I would double check. I would hop on and make sure that there's no open accounts. There's nothing anywhere that's keeping that from rolling to indeterminable.

1:24:42And then other than that, I would choose a different rental car company because unfortunately, and you'll find this with apartments, you'll find this with mortgage companies, you'll find this across the board. There are some companies that won't do their due diligence to look and really say, okay, does this person have the money to do the thing that they're saying they're going to do? And for that reason, you have to be the one to say, I'm just going to find a company who is going to keep the lights turned on upstairs and understand that I have the money to rent this car, buy this apartment, manually underwrite this house.

1:25:13George Kamel:Yeah. And remember the person working at that desk may be incompetent. And so that's always a possibility and you might need to talk to a manager. And if they are the manager, God bless. I would go over to the, you know, a different rental counter and go, Hey, they wouldn't help me over here. I've got plenty of money. I want to ride a car, I will bring it back. Yeah. And I've had a good experience. I'm trying to think of the ones I've had a good experience with. We use Avis. My husband and I tend to do Avis. Oh, nice. A national and enterprise I've had good experiences with. So I would try those, but you do a little research, call ahead and ask, hey, what's your debit card policy?

1:25:44George Kamel:Be prepared for the credit check. Let them know, hey, I don't have a score. You're going to pull it up and it's going to say no score. That's fine. What they're looking for is that bad or low score. And for some reason you had a whopping four. That's wild. It's about as low as I've heard.

1:26:16welcome back to the ramsey show here in the fair ones credit union studio we've got liza who's in Austin, Texas on the line next. Hey, Liza, how can George and I help out? Hi, good afternoon. I love your show. And I, I really have been taking notes all these past two, three months on financial matters. But I do have a concern. This is all new to me. I just, I grew up with not being financially responsible and how to save money. I am a single mom. I have one daughter. She is 20, and she is going to school, university. And we have not been, well, lately, financial aid has not been helping us out because we earn, I guess, we don't earn, how do I say?

1:27:10We earn a lot for a family of two. And I've been helping her out, paying her tuition every semester. but I what I rely on to pay for her tuition balance or leftover balance to help her pay her semester is taking out of my IRA my Roth IRA oh and I don't like to do that because that's my of course that's my my retirement absolutely and yeah so any helpful tips please um uh where do i start how much uh how much have you pulled out of the roth so far um like every every year i take about um i take about a thousand five times two will be around three thousand a year how much is in their total right now it's five thousand eight hundred and with 70 cents.

1:28:09Okay. Okay.

1:28:10George Kamel:So it's about to be zero if we keep this up. Yes, exactly. How old are you? I'm 44. Okay. Well, it's clear that you love your daughter. Can we agree on that? You're doing something genuinely sacrificial to invest in her future. And that part is right. Your heart is right there. But the vehicle that you're using to do that, that's the issue here. Because right now, here's the future. Let me paint it for you. You retire broke. Now your daughter has to take care of you financially, sacrificing her future, creating a generational cycle. Right? Yes. And you didn't mean for this. You had good intentions.

1:28:50George Kamel:But I don't want you to become a burden to your daughter later on because you sacrificed for her today. So I think there's a different way we can come up with a game plan to cash flow$3 ,000 a year. Would you agree? Yes, sir. We're not talking$30 ,000 a year. $3 ,000 is manageable. Yes. It's about like$6 ,000 to$7 ,000 a semester. Okay. Is she working at all? She's about to work here part-time in the summer. Good. How much will she make doing that? That we don't know yet because she will be working soon. She's going for animal science. That's her major. She's been applying to all these vet clinics and stuff.

1:29:34Is she wanting to be a vet, vet tech?

1:29:36George Kamel:What's her goal? Like a vet tech, yes. Okay. Does she know how much vet techs make? I think she told me once, but I forgot that number. Okay. I thought I heard you say that for a family of two, you guys bring in a really good income. What do you guys bring in together? Or what do you bring in? Year is 120. Okay. Approximately. Okay. And how much longer does she have for school? She has two more years to go. Two more years. So we're talking like$12 ,000 solves this? Correct. Yes, sir. You got it. Okay. So what if we had a game plan to where she works part-time, she covers, let's say, half of that amount over the next two years, and you cover the other half, and you both cash flow it without robbing your future?

1:30:25Okay. Let me write this down. I have my notes and everything, so.

1:30:30George Kamel:Yeah, you said you bring home how much a month? Seven? Seven, yeah. Now, how much of that can we use to save for the college fund and cash flow this?

1:30:43Okay, I have consumer debt and I have a car loan. What's left on the car loan? It's$9 ,984.56.

1:30:52George Kamel:Okay, and the other? And the consumer debt is$4 ,603.05. sense. Okay. And have you stopped going into debt? Yes. Okay, great. I'm just paying these off already. These are like past, past debt. They're older debts. They're older. Yes. Yes, sir. Answer one question for me. So before you were saying that you were taking out$3 ,000 a year from the Roth IRA to make this happen, right? So that's essentially all we're looking to find. If you were floating all of it except$3 ,000, that feels like a fairly easy equation to solve unless I'm missing something. Because now we can just budget$250 a month over to a little savings account so that we have three grand by the end of the year.

1:31:43George Kamel:You see the math on that? $3 ,000 divided by 12. So now we can make a budget. Okay, hey, we're going to budget to cover our debts, aggressively pay that off. And on the side, we put$250 away in a savings account earmarked for her college. Yes. In addition to what you were already putting aside. Yes. And then if she can work part-time, that lowers the amount you even need to put in. Yes. Because I do cash out my vacations from work. So that's like every quarter. So I use that extra money to pay for the rest of her tuition plus the$1 ,500 of the IRA. I'm sorry. Okay. So we won't cash out the additional$1 ,000 or however much it was from the IRA.

1:32:33If you want to keep cashing out your vacation, that seems to be working for you. There's extra cash there. And then the rest is cash flow through the budget plus your daughter's portion from her job. And I think you've got it covered. I think you're doing a great job.

1:32:47George Kamel:Paychecks are the solution instead of your retirement account. So are you investing anything currently into the Roth IRA every month or anywhere else? Yeah. It's once a month. It's with Edward Jones. Okay. How much is that? About$400,$480 ,000 or$60 ,000 a month. Okay. So starting today, we're going to pause that. We're going to take back that$480 ,000 a month and apply it to our debts. Oh, okay. Okay, so we can actually go tell our employers, say, hey, I can stop that? Yes. So I have like the stop all contributions. And what this does is it allows you to focus for a season so that you can get rid of your consumer debt, so that you can cash flow your daughter's college.

1:33:31George Kamel:So that's your deep why. Let that fuel you to get really intense, to not let this debt drag on any longer. It's been hanging out long enough. You've got a future ahead of you. Your daughter has a future ahead of her. And so let this be an aggressive season for the next six months. We're going to knock out the consumer debt, which frees up how much in payments? What's the car payment? What's the consumer debt payment every month? Okay, the car loan is$390, but I pay$500 a month. Actually, I raise it to$525 to pay it faster. Okay, so$390 on the car plus how much on the consumer debt? Well, it varies on the payments monthly, but it's$4 ,000 right now,$4 ,603.

1:34:12I make monthly, like I guess their minimum payments because I have some like - A couple hundred bucks? Yes. Okay.

1:34:19George Kamel:So right there, that's going to be five, six, seven hundred bucks freed up once you knock out these debts. Now you've got some margin. Now instead of ever robbing a retirement again, we are just building and building and building so that you can retire with dignity and not have to rely on your daughter to cover the gap. And the good news is once you do that, if you start investing 15 % of your income from, let's say, age 46 when this is actually done to age 65, you're going to be right close to a million dollars.

1:35:05You should not feel uncertain about investing, and you don't have to. That's why we created Investing Essentials, a two-night virtual event where George Camel and I walk you through my playbook for investing and wealth planning. We'll simplify everything from 401ks and mutual funds to passing on wealth so you can invest with confidence. Tickets start at$199. Get yours today at RamseySolutions.com slash events or click the link in the show notes.

1:35:56So Ask Ramsey is our free AI tool that's built and trained on proven Ramsey principles. And today, we're going to break down the most asked question of the week. So this week, we saw the biggest question was, what's the best way to create a debt payoff plan? Well, they're in the right spot, George.

1:36:14George Kamel:I love it. Well, if you've hung out with us for long enough, you've heard us talk about the debt snowball method. And the other method that you may have heard about is called debt avalanche. So think about it this way. Avalanche is focused on the highest interest rate. The debt snowball is focused on the smallest balance. So you list out all of your debts from smallest balance to largest balance. We ignore the interest rate from now. And we're going to pay minimums on all of the debts except that small one. The small one, we're going to tack with all the vengeance we can, everything extra. We're going to just focus on that one debt.

1:36:45George Kamel:Yes. That's it. And once that debt is knocked out, what happens? You freed up a payment that you can roll into the next debt and the next one. And so that creates a snowball effect as you pick up more snow along the way. You get some quick wins. You get some progress. You get momentum. that's what causes people to get out of debt. I love that. And so if that helped you, you can try Ask Ramsey for yourself. Ask Ramsey can help you lay out a debt payoff plan based on your debt balances, your minimum payments, and your interest rates. Ask her question today at ramseysolutions.com or just click the link in the description if you're listening on podcast or YouTube.

1:37:20Gail is in Phoenix, Arizona. Hey, Gail. How can we help today? Hi. How are you doing? Doing excellent. What's up in your world? Good. Well, so I'm just going to be turning 69. Last 40 years, a serious drug problem. I worked a lot. I worked for a lawyer back and forth. So I lived at home, took care of my mom, and she died about two years ago. I'm sorry. Thank you. So the house I lived in with her, my brother were able to sell it for seven times the amount from when they bought it. So what did you end up taking? We got 700 and I think it was 750 right around there. The house they bought for like 135, 30 years ago.

1:38:13And, you know, I think because, you know, in an addiction, you don't think about anything but yourself and never thought I'd get old, let alone, you know, what I would do with my life. But I have a son. I was a single mom. He's 37 now. I don't know how that happened. And so we sold the house and I was able to, OK, I got sober. I got serious with God. I started to walk with God. I mean, serious one. You know, once that started, I started walking, all these things were hitting me like a ton of bricks. You're this old. You don't have, you know, you didn't save. Never, never thinking about retirement.

1:39:00So I bought the house. I got it for$325. It was$350. I got them down to$325. I was able to gut the whole house because it was very old, very old. and I bought it. I don't have a mortgage. Wow. I love that. I love that. How can we help you today? That wouldn't have happened without God. Listen, right on. Amen. Yep. How can we help you out today? So what, so this last two years I've been just saving. I, I, like I said, I work full time at a law firm. My salary is about$50 ,000 a year. And so I started taking, I went full retirement age with my retirement, to get my retirement savings. I started that, I get full retirement, that's $2 ,303 a month.

1:39:53So that's the money I'm coming in. My HOA is only$80 a month. So I have no debt whatsoever. I own a car, you know, so I just have my regular bills. Are you investing? Are you investing 15 % every single month?

1:40:09George Kamel:I don't know. That's the question. I was able to save, even after, you know, I did all my, I started saving last month. I was up to$21 ,000. You should be putting about$625 away every single month into your 401k if your job has one. I don't have one. So is there any retirement plan through the employer? Okay. Nothing. So you have access to a Roth IRA at least. I don't have a clue what to do. What I did do the other day or last week was I took$7 ,000, opened a brokerage account to buy SpaceX. I was allotted 14 shares. That was it. So I still have$5 ,000 sitting there. Well, let us help you. Let us help you because we only have a little bit of time with you.

1:40:53Okay. And we appreciate the backstory because that does help. But what George and I would suggest for you to do today, the same way that you went over and opened a brokerage account, you can open a Roth IRA because you have earned income. So we want you to open a Roth IRA, and then we want you to invest. At this point, I wouldn't mind if you just picked— Yeah.

1:41:11George Kamel:It's$8 ,000 a year since you're over 50, and that'll allow you to sock away$8 ,000 a year tax-free because you're using after-tax income to fund it, and it's not tied to your employer. and that will compound over the next 10, 20 years, God willing, into a nice little nest egg for you. And so between that plus Social Security, the goal is how can I survive? Because right now you don't have much of a nest egg, it sounds like, but you have a paid-for house. And I would stop buying those single stocks, by the way. I don't want you to do that again. Okay, we'll do it. Don't do that anymore. So I'm going to be 69, so my boss is saying he wants to retire next year.

1:41:53That means I have to – well, I'll definitely keep working. But what do I do? Where do I get a Roth IRA? I don't know anything about –

1:42:02George Kamel:Where did you open the brokerage account? I opened it with E-Trade, so Morgan Stanley. Okay. So you can open a Roth IRA through them as well. And in your shoes, what I would do is get a pro in your corner because time is of the essence and we cannot screw this up. So I've got just the person for you. Jump on to RamseySolutions.com and click on SmartVestor Pro. These are investment professionals with the heart of a teacher because that's what you need right now. You need the financial literacy so that you know what you're doing versus just hoping. This is like spray and pray. I hope my money is doing well.

1:42:34George Kamel:I hope it grows. They will actually educate you to go, here's what a mutual fund is versus a single stock. Here's what a Roth IRA is versus a brokerage account. And they can help create a strategy so that you can retire with dignity instead of just fingers crossed, hopefully one day I can. And you've done a good job. I mean, the fact that you were able to buy a house in cash is a great thing. You've got a great secure job. You've got a good income going forward. You're going to be just fine. But you've got to do what George said to do next. You can't just guess and hope that everything works out.

1:43:06Yeah.

1:43:06George Kamel:Well, there's a level that DIY becomes dangerous. Yeah. Because I've done DIY in my own house with like a house project. Doesn't end well. Usually I end up calling a pro to fix all the things I messed up. Yeah, especially if you don't feel like you have a baseline of knowledge and you don't have a lot of time. She doesn't have time to make any more mistakes. At 22, you can screw some things up and make up for it later. Listen, at 22, if you just parked your money in an index fund, I would probably never stop you, right? And it's just growing and growing and growing. There are worse things you could do, right?

1:43:34So I agree. With her, a smart Vestor Pro, you have to. You need to get the help you need. But I think that Gil was a cautionary tale for a lot of people listening. it's so easy to just go through life, George, and think, I'll make that change later. I'll save later. I'll save later. And the time, it does catch up with you. And so if you're listening now and you're looking at your finances and you feel that squeeze of living paycheck to paycheck, if you feel that shame about knowing the debt that you have, you haven't touched the student loans, you're still spending on a credit card, right? You just went down and bought yet another car and you have another car payment.

1:44:12It's going to be another three to four years before you pay it off. Don't ignore that. We get those checks in our spirit. We get those red flags. Start today. If you start today, then you will look up in two years, three years, the debt will be gone. I know for Sam and I, it was seven and a half years. How long did it take you?

1:44:29George Kamel:Two years. Two years. You commit for two years, your debt's gone. And the next 20 is freedom and margin. Yes, freedom and margin. And you can actually live like no one else. George said something so amazing to me on the way into the studio. We go out and shake people's hands in the brakes. He came back. He said, Jade, one of my favorite things that I get to spend money on is a laundry service. I love that. Buying my time back. Buying your time back. And all of that is because you sacrificed to win when it was time. It was crunch time. And when it's time to crunch, get to crunching. Get to crunching.

1:44:58George Kamel:Well, I mean, here's the crazy math on this. At 20 years old, every dollar you invest becomes$73.65. But you invest that same dollar at 50 years old, it becomes$3.50 at 65. That hurts. Instead of$73, you got three bucks because you waited 30 years. So do not delay. Get to investing. The best time to plant a tree was 20 years ago. The next best time is today. It's not too late if you can still fog up a mirror. The time is going to pass anyway, boys and girls.

1:45:45George Kamel:Hey, George Camel here. So you're thinking about buying or selling your home. It's exciting, but there's a lot to think about, and all those decisions can feel overwhelming. Well, here's the good news. You don't have to tackle the process alone. Ramsey's Real Estate Homebase is the place to find all of your free tools and resources for help to get prepared to buy or sell your home with confidence. You'll find calculators, start to finish guides, a podcast, and even an in-depth video course hosted by yours truly. What's not to love? So if you're ready to take the next steps toward your home goals, go to RamseySolutions.com slash real estate.

1:46:17George Kamel:That's RamseySolutions.com slash real estate.

1:46:30Well, buying or selling your home is a high stakes game because one bad deal could cost you tens of thousands of dollars. You don't want to overpay for your next house or sell your current home for less than it's worth. That's why Ramsey Trusted connects you with vetted real estate agents who have the experience to guide you step by step to make smart decisions, not expensive mistakes. Connecting is really easy. Just compare agent profiles, interview your top choices, and ultimately pick the one that's right for you. Find a local Ramsey trusted agent who has your best interest at heart for free at ramseysolutions.com slash agent, or click the link in the description if you're listening on YouTube or podcast.

1:47:10Jackson is in Colorado Springs, Colorado. Hey, Jackson, what's up? Hey, Jordan Jade, how are you? Doing great. How can we help today? I have a question regarding our Baby Step 3 emergency fund. Wife and I just hit three months, and we both think we need to get to six months. However, that'll take us about another 14 months to get there. Or that is a sinking fund for a labor and delivery bill. What would be your thoughts on where we should be at? Three months is about$25 ,000. Six months is about$42 ,000. I think that what you're doing is about right, kind of stopping and saying we need to put this money aside specifically for labor and delivery.

1:47:54We know we're going to need that money. I would exactly do that because chances are you are going to use that. You might hit your deductible. You don't know what the situation is going to be. So I like the idea of that. Hopefully there's some that you can hold back when it's all said and done and plop it over into the emergency fund. And if not, you can just push play, you know, on the extra three months once you're done saving up for labor and delivery. Perfect. Yeah. I have another question if there's time. Yeah. What are the numbers? Tell us the numbers. What's three months? Three months is about$25 ,000.

1:48:27Okay. Six months is about$42 ,000, a little over$42 ,000. We are both pretty conservative, so let's go to$45 ,000. Yeah. And what's labor and delivery? So we just had one about a year ago. That was about$7 ,500. I've budgeted$9 ,000 just to be safe. Okay. So hopefully you'll have another$1 ,500 when it's all said and done to plop over there and get you closer to the$42 ,000,$45 ,000 you want.

1:48:50George Kamel:Yeah, hopefully. What was your other question? We have a paid-for car that's worth$45 ,000. We've been debating back and forth if we should sell it, buy a$20 ,000 car, and basically end our baby step three with the extra. Oh, I see. Okay. What's your income? Wife's stay-at-home mom, she makes about$1 ,000 a month doing remote work, and then I make$132 ,000 to half their base salary and vehicle allowance. And what's your other car worth or other vehicles? My truck is worth about$18 ,000. We're just under the 50 % mark. Okay. Yeah, nothing's on fire here, but if you're just like, we don't really need this much car.

1:49:35George Kamel:we can get something great and reliable for the family for 20 or 25 you can always use that margin to then apply to the emergency fund and spare yourself 14 months of sacrifice so it's like either way there's sacrifice going from a 45 000 car to a 20 000 car feel that you'll feel that and saving 14 months of sacrifice with this baby on all that going on i think that's well worth it if you guys don't really care about driving the fanciest cars yeah and i do love my wife being in a basically brand new car that's paid for yeah what kind of car is the the one that's paid for uh toyota tundra or i'm sorry toyota forerunner mine's a tundra forerunner okay so she'll be using the forerunner it's gonna last forever i mean yeah forerunners are great and they hold their value pretty good too so you're in good shape man congratulations you guys have really thought through this intentionally Yeah.

1:50:28George Kamel:It's a good place to be. Very good. Thanks for the call. All right. We've got Rebecca in Dayton, Ohio. Rebecca, you're on the line. Hi, Jaden. Hi, Jaden George. Thanks for taking the call. Yeah, absolutely. I have a question about my husband's retirement account from a previous employer. He switched jobs about a year ago. He did have a traditional 401k with the previous employer. He now has a Roth 401k at the new employer. And his old account has been going pretty good, and so we've just – he just kind of let it ride. But we've been hearing you say that that's kind of like leaving your stuff at your ex's house.

1:51:08So we're kind of trying to figure out how to go about moving that, but we're so nervous that we would do it wrong. But we should be able to do that ourselves. Is that correct?

1:51:18George Kamel:Yeah. It's not a complicated process. The key is you never want to see the money in your bank account. You want to do something called a direct rollover, and you want to keep it in-kind, meaning if it's a traditional 401k, we want to do a traditional IRA. Okay. Because if you move it to a Roth IRA, well, now you've got to pay the taxes on that. Both of the accounts, the old account that's traditional and the new Roth, they just happen to be with the same company. But does he need – he opened a Fidelity account. Does it need to stay with the same company or it doesn't matter? No, it doesn't matter.

1:51:54George Kamel:He could roll it over to Vanguard. So you could just get a direct rollover over to a Vanguard IRA, Fidelity IRA. It doesn't matter. The key is direct rollover. And what happened with my wife's 401k when she left Ramsey to stay home with our kids, they actually mailed us a check. Now it wasn't to my name. It was to the Vanguard account. And then I deposited that check into the Vanguard account. So it's not a complicated process, but I understand it's a lot, There's like a lot of zeros on the end and it can feel intimidating. So if you need help with that, you can always reach out to a SmartVestor Pro.

1:52:25George Kamel:Just jump onto RamseySolutions.com, click SmartVestor Pro, and those are investing pros. That's what I did when I first started at Ramsey. I had an old Apple 401k. They helped me roll it over to an IRA. That took some guesswork out for me for sure. Okay. And then you want to invest. That's another key. It's just going to sit in the settlement fund in the cash portion. So you want to make sure you actually invest that money once it's in there into good funds. Yeah, and I was going to say, you mentioned that you didn't want to move it because you liked the way it was invested. So I would just choose the same funds again and make sure if you really loved your rate of return that it's invested the exact same way in the same funds.

1:53:01Just get to as close as possible. It's been getting about 18%. So we're like, okay, that's good. But now we're thinking we do still need to move it where we can control it. Yeah.

1:53:10George Kamel:Well, I mean, it's not magic. The market has been doing really well the last couple of years. It was like 26%, 23%, 17%. So that is probably the reason for that. It's not magical funds. You can probably find very similar funds in that IRA. But I do like an IRA because you have full control of it. So that's a nice feature, and you have access to all of the investments in the world versus just what's in your employer's 401K. Absolutely. Well, George, let's see. Let's try to help Connor. I think we can do it real quick. Connor, what's up? Get to your question fast, Connor in Washington, D.C. How can we help?

1:53:44Jordan and Jade, I'll be quick. I got married a month ago, and we experienced an impor of love and generosity. I'm sitting or I'm driving a leased car that expires in December. I'd be able to buy it for$19 ,000, or I can forego it, let the dealer take it, and then buy a beater. But I feel like I'm getting a pretty good value on this car. So the question is, do we take the gifts from the wedding and put them towards this shinier car, or do we just put them directly towards the loans and keep it simple? Gosh, yeah. How much loans do you have? What do you owe in debt? We have$72 ,000 total in student loans.

1:54:25You know, I'm all about having a nice car, but if you can have more cash to go towards this debt, I'm going to take that every single time. The gift was yours to do what you want with, and I would definitely, when I can get out of it, I get out of it and I take some cash and buy a beater.

1:54:42George Kamel:Yeah, the way to think about this is if you did not have this lease and you had$19 ,000 and you had 72 grand in debt, would you go out and buy a$19 ,000 car? Probably not. And so I know it's a little painful. You're newlyweds. You're excited. You want to feel like we made it. We're doing well for ourselves. And then you go out and buy a$7 ,000 car. Now you're going, ah, this kind of stinks. But what happened for me, Jade, is it actually lit a fire under me. anything that you don't like about that car just becomes more fuel to get out of debt faster. So you're right. I know that's right. Sam and I used to have a, we had an old Jeep.

1:55:17It was a Jeep Liberty. And we decided like, this is our one, we were a one car family and everything went wrong with that car. But you know, you're getting out of debt. At one point, the motors went out in the windows. So the windows wouldn't stay up. And to take it to get fixed, it was like$700. And we're like, nope. My husband found like shoelaces and like inside the door, use the shoelaces to keep MacGyver. MacGyver. Wow. By the time we got out of that car and upgraded, like smoke would come out of the engine every time I started it up. It was just, it's a beater.

1:55:47George Kamel:I'm glad you're alive to tell the tale. I live to tell the story. Well, you don't need to go that crazy, Connor, but I would just buy a reasonable used car for far less than$19 ,000. We're not telling you to do anything we haven't done ourselves is the point of the story.

1:56:08Thank you.

1:56:25Dave Ramsey here. For more than 30 years, I've been talking to folks on the air, and I can tell you that most people are broke. Not because they don't make enough money, but because they don't have a plan. You need to give every dollar you earn a job, because when you do that, something changes. You stop guessing. You stop worrying. You stop stressing. Our EveryDollar budgeting app will show you how to find extra cash, pay off debt, and finally start winning with money. But most people won't do it. They'll keep living paycheck to paycheck. Keep hoping things will change without making a change.

1:57:01It's time to say enough is enough. It's time to take control of your money. It's time to start your every dollar budget for free today. Go download it in the App Store or Google Play.

1:57:24Ramsey shows scripture and quote of the day. Ephesians chapter two, verse four through five. But because of his great love for us, God, who is rich in mercy, made us alive with Christ, even when we were dead in transgressions. It is by grace you have been saved. Thank you. Earl Wilson said this. If you think nobody cares if you're alive, try missing a couple of car payments. They'll do it. They'll come after you. Oh, that's so funny. I love that. All right. It's also kind of sad. Yeah, there's a sadness to it for sure. Jesse is in Nashville, Tennessee. Hey, Jesse, how can we help? What's going on, guys?

1:58:01Hope you're all doing good today. Yeah. What can we help with? Yeah, so my question, yeah, I'm 22 years old, you know, graduated college. I've now kind of been working for a year. And my question is, should I be chasing in my career something that is more financially stable or something that's closer, like, tailored to my passions? and what is the balance in that? Why can't it be both? Tell us more. Yeah, I worked nine months doing foster care, and I enjoyed it, but it was very much just didn't pay great, and it just emotionally burnt me out, and I thought I needed a break, so now I'm trying something in the business realm, selling insurance, and, you know, it's maybe more higher earning and kind of provide more for me.

1:58:52But I'm trying to figure out that's just something I want to do long term. And this is what I want to do, you know, next 10, 15, 20 years. That feels like a really big leap of interest from caring for children, literally orphans, to selling insurance. Is there something that you can do that still works heavily with caring for people, mainly children, that maybe doesn't burn you out quite as much and maybe you can make a little bit more money? That's what I'd be thinking because clearly, do you see what I'm saying? There's a huge gap there. Yeah. Have you thought about that? Definitely. I haven't yet.

1:59:34That's what I've just been trying to ponder and think on these past few months as I've started this job in insurance now. Well, our colleague, our former colleague, whom we still love, Ken Coleman, wrote a book, Find the Work You're Wired to Do. And inside of it, there's a career assessment. George and I are going to send that to you because I think that's all your hang up is. I think that you've identified what it is that you're passionate about. We just have to figure out all the different ways and all the different career fields that you can use that passion. And that book is going to help you do that.

2:00:05But what I wouldn't do today is choose a career simply based on how much money you can make out of it and what you perceive to be stable. I would not do that.

2:00:15George Kamel:Yeah, you'll get to the end of that road with a lot of regret going, now what? I'm burnt out. I paid a soul tax for a decade. Sure, I made some money, but it was not worth it. So I want to know this, Jesse. Where are you at financially today at 22? Yeah, I mean I've been living at home with my parents. So I paid off all my debt and, you know, I'm kind of at a point. I just proposed to my girlfriend. We're about to be married in the next nine months. So it's kind of, you know, we're not in the negatives. Got a couple thousand dollars in savings, get an emergency fund. And now it's just trying to figure out what can I do as we navigate going into marriage.

2:00:53George Kamel:That's great. Well, that financial piece gives you so much flexibility. It gives you options to pursue the thing you really want to do instead of, well, I have to go sell insurance because it makes a lot of money because I have a lot of debt to pay off. So staying debt free is actually sort of a hack for doing the career that fuels you. And I'm just, I did a quick Google search and find the work you're wired to do will help you with this. But I'm looking at jobs like licensed clinical social worker making 60 to 90 K child protective services, investigator, supervisor, 50 to 75 K foster care program director, 65 to a hundred K.

2:01:27George Kamel:So there's a lot of jobs out there that can pay well. And the truth is at 22 with no experience, expect to not make much. That's right. That's kind of the name of the game. And as you get more experience by 32, you should be making much more. So you got a lot of time on your hands. So just don't squander it. Start to kind of vibe out. What is the thing I liked about that? How can I pursue that? But the key is, what do you love? What does the world need? What are you good at? And then what can you be paid for? And if you find that sweet spot in the center there, you have struck lightning. It's something most people don't do their entire lives.

2:02:00I like that. I like that. Good question. Thanks for the call. We've got Drew, who's in Springfield, Missouri, up next. Hey, Drew. Yeah. How can we help? Me and my wife have a question. We were thinking about taking some equity out of property that we have to buy some rental property. Okay. How many properties do you have total? We have two. We have our main house. It's paid for. We have a lake house, and it's paid for. Okay. And so which, you were going to borrow against one of these to buy the next property? Yeah, we were, the way we feel about it is it's like having cash in a checking account.

2:02:46It's really not doing much. And I could be wrong. It might be the wrong way of thinking it, but it just seems like a lot of equity sitting there, not doing anything. So yes, we were going to take the equity out of the lake house and try and put it in some rental properties.

2:03:02George Kamel:The lake house was meant for you guys as a toy, right? You're not renting it out? Yeah, that was just – no, we're not renting it out. It's just a weekend thing. Okay, so here's the way to look at it. It's not an investment, and therefore it doesn't need to make you money. It's just for you to enjoy. And the reason we tell people to pay cash for things like that is so that you can stomach that. You know, Dave Ramsey's got a lot of properties. He's got a lake house that he loves. He does not look at it and go, man, there's a lot of money just sitting in that lake house. I'd like to have that. Because what happens is now you're moving backwards.

2:03:34George Kamel:You're taking on the HELOC or the home equity loan to do this. Now the lake house is on the block. You've got a new payment in your life to try to do this again with another rental property. So I want to know what's the deeper reason behind this. Because I don't think it's that the lake house is just sitting there. It sounds like you guys are wanting to build wealth in a different way. Well, yeah. So really what's driving it is we got started late on investment accounts. We just got started a few years ago, and we're trying to catch up is kind of what the thought is. How old are you guys? I'm 38, and she is 39.

2:04:17George Kamel:All right. What's the lake house worth? uh it's roughly 300 we we put a lot of uh improvements to it i mean we bought it and just have remodeled it from one end to the other so it's kind of hard to tell but 300 is a safe number how often do you use the lake house just about every weekend oh wow so it's getting a lot of use so you're not it's not something you're like hey i'd be willing to sell this thing and put the money in investments because we're behind? No, it's our hobby. It's pretty much our only hobby. What's your income? What do you guys bring in every month? Well, we take home about$145 ,000 a year.

2:05:02What's the gross amount? I'm not 100 % sure on that.

2:05:10George Kamel:But how much could you invest a month right now in order to, quote, catch up? Because you're only 38. You've got plenty of time. And you've got no debt in your life, it sounds like. Well, there is a – the boat that's sitting in the boat, I owe$6 ,000 on it, and that's it, on debt. Out of that$145 ,000 that we take home, we invest$68 ,500 of that. Wow. Okay, well, that's great. Until, like, the stock market? yeah we have an edward jones okay and how much do you currently have in investments uh 224 000 and that's that's we've accumulated that over uh this is my second year so okay well let me show you the math on this you're 38 you got 5600 a month basically going into these investments, you already have$224 ,000.

2:06:04George Kamel:You're going to have$7.4 million at$60 ,000 if you just keep this up. Yeah, that's pretty good. So therefore, I tell you that to say, you don't need to rush this. You don't need to take out a HELOC to go get an investment property that hopefully ROIs, that hopefully actually makes any amount of money because you have debt leveraged against it, which is going to hurt the cash flow. So I would just keep doing what you're doing. The life hack here is your income and your savings rate, not that you're not doing enough wealth hacks and taking out enough HELOCs to leverage more properties. That's right.

2:06:37You guys have done really, really well and you've set yourself up for success. There's no reason to really change the recipe now.

2:06:43George Kamel:Unless you love real estate, then just stack cash or invest and buy real estate and cash. But the stock market is a great passive way, a truly passive way. No headaches, no landlording. The money just grows and grows and grows. That's right. Well, thanks for hanging out with us today, guys. And remember, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus.