Don't Leave Your Financial Future To Chance

10:48Dave Ramsey:George, I just heard my friend, and I just really love this woman, is going to be one of our musical guests, the one and only Natalie Grant. And, man, she is a wonderful human being but also has a world-class voice. And just so I'm really excited to have her with us on here. And we had Stephen Curtis Chapman with us last year. So, I mean, we got the lineup of lineups. You've got all the entertainment you could ask for. Oh, it's going to be something. You're going to be entertained out. If you're bored, it's your fault. Exactly. So, again, go to RamseySolutions.com slash events, or you can click the link in the show notes and get registered for this cruise.

11:27Dave Ramsey:It's next March, and it is not quite sold out. You can still get some of the cabins. And there's some specials running literally today, so check it out. Julie's in Houston, Texas. Hi, Julie. How are you?

11:40George Kamel:Hi. Doing well. Thanks for taking my call.

11:43Dave Ramsey:Sure. What's up?

11:45George Kamel:So I initially attempted to enter into an agreement with my father to purchase a house that he had inherited from my great aunt. And I sort of had to compromise on the purchase price by giving him an upfront$5 ,000 to remove the lien that was on the house. That lien was a Medicaid lien. He could not sell the house unless that lien was removed. And so I did that with the understanding that we were good with the agreement and the purchase going forward. But he ended up using that money to remove the lien and then decided that he's going to sell the house for more money than our agreement because that's what's best for him.

12:37George Kamel:Um, you know, I, I told him that I expected to be paid back if that was his decision, but I feel like this is just another way that he has sort of, um, been dishonest and, and hurtful, I think financially in our relationship. And it makes it complicated that he's also my dad. Um, and I know that I'm called to honor this relationship, but I do feel like, um, there is a, There's some financial issues between us that I'm having a difficult time navigating and just would like some advice on how to go forward.

13:18Dave Ramsey:All right. So you said another. So this is not the first time he's done something underhanded or dishonest to you.

13:28George Kamel:I feel like this is the worst. No, it's not the first time.

13:32Dave Ramsey:There's a pattern, and you know that this guy is a crocodile.

13:38George Kamel:The pattern is we're very generous with him, and he loves our generosity. You know, we've purchased transmissions that have happened.

13:47Dave Ramsey:No, that is not true. You're putting sugar on top of a card. He loves that he can take advantage of you. You have felt taken advantage of as a pattern, and yet you gave him$5 ,000, which you should not have done. because, by the way, you can have a lien removed from the house at the closing. You don't have to do it before the closing. So you could have given the title company the purchase price, and they could have removed the lien and then given him the net proceeds, which is the way a normal human does a transaction if you're not a crocodile. Okay? So here's the thing. You've got to separate.

14:29you do not honor, when the Bible says to honor your parents, it does not say to honor your

14:35Dave Ramsey:parents' misbehavior. It's honoring the office of father, the office of mother. And that's like, for instance, I agreed with almost nothing that Joe Biden did or said when he was the president of the United States. Some of you loved him, I didn't. Okay? But the Bible and power and pray for them. So I'm going to honor the presidency, but not the things that Joe did as president. So I can honor my father, but I don't have to honor his cocaine use. I'm not saying my father does cocaine. That's not what I'm saying. But the point being, okay, that your dad, you can honor the position of father and say, I honor you as my dad, but I cannot do financial transactions with you anymore because I can't trust you.

15:31Dave Ramsey:that's not dishonoring it's just observation

15:36George Kamel:i think i know how this is going to turn out i do too he's going to be pissed next time you tell next time he can't take money from you well i think he's going to sell this house and he's going to feel real rich for three years and he's basically selling the inheritance that could have gone you know to my grandkids that i was even willing to purchase um and take on you know that responsibility to give something, you know, to make a generational wealth.

16:03Dave Ramsey:I'm sorry, but there was no generational wealth with a crocodile. That was an illusion.

16:11George Kamel:You need to let that go.

16:12Dave Ramsey:That's gone. He owns the house, and he decided not to sell it to you.

16:18George Kamel:But once he sells and he's out of money, I know he's going to depend on me. No, he's not. No, he's not, because I'm not going to give him any more money.

16:25Dave Ramsey:You can't depend on me if I say no.

16:29George Kamel:when he steps out that door, there's going to be no doormat named Julie waiting to fund his misbehavior again. So you get to set the boundary. There's no depending on you anymore. You're not going to enable him. No, absolutely not. He's a grown adult. He has nothing. That's his problem. He has no savings. That's his problem. Here's the hard part, Julie. Nothing you could do could change that. Because you just showed him. If you give him$10 ,000, it's gone. It doesn't matter. it's an endless pit.

17:00Dave Ramsey:This is, you do not owe him. You're a classic enabler. Okay. I mean, you're just, you're just handing out money thinking it's going to make everything. Okay. It never makes everything. Okay. It just makes it more of what it already is. You're not helping him when you participate in his crocodile tears, you're harming him. And so you just stand back and go, you know, I love you. You got issues. and I hope it all works out for you. And, you know, if you're out of food and you're hungry, I'll buy you a Kroger card, which does not allow alcohol or cigarettes on it. So it only allows food. So there you go.

17:43Dave Ramsey:What's he going to do with the proceeds from the house? He's going to take them and use them and blow them. That's what he's done his whole life.

17:49George Kamel:He's going to pay off his debt. He's going to pay off his debt and then it's going to be gone. And my thought was, well, if he ever needed anything, at least we'd have an asset where we could pull out an equity line of credit or something. You know, if there was ever an emergency, we would have a source of wealth to help him. And instead of trying to reason through that with him. He's not the problem.

18:08Dave Ramsey:He's not the problem. You are. Because I can't get you in this conversation to recognize that crocodiles do one thing, and that's bite. And every time I talk about it, don't feed the crocodile, all you do is figure out a way to get the food out.

18:22George Kamel:Well, I don't know how to navigate family holidays. like how do you even have relationships I don't give you money

18:28Dave Ramsey:if you would like to come over and eat that's fine but I don't give you money if the only way you want to come to Christmas is for me to give you$5 ,000 I guess we're not going to see you at Christmas and if he chooses not to come that's on him

18:44George Kamel:I think you're trying to save this relationship that is broken

18:48Dave Ramsey:with money you're trying to grow this guy's character

18:51George Kamel:Julie I can't help you

18:53Dave Ramsey:This is the 14th time you've argued with me and you called and asked us what to do. What you have is a boundary problem. You are a classic enabler. Go see a therapist. Somebody needs to walk you through how to say no. You've gotten this so tangled up that somehow it's all going to be okay someday. It's not going to be okay. The guy's a freaking crook. I'm sorry he's your father, but he's a crook. He's a bad dude. Don't participate with him in his delusional crap. You're not helping him. You're not helping your family. You're not helping you. Get some help, girl.

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21:28Dave Ramsey:Stephanie is in Sacramento. Hi, Stephanie. How are you?

21:32George Kamel:I'm good. How are you?

21:33Dave Ramsey:Better than I deserve. What's up?

21:35George Kamel:Good. Well, I'm kind of in a dilemma. I'm currently on Baby Step 5, and I finally actually reach that 15 % for my retirement. But I'm going to be needing a new car in the next year or two. So I'm just wondering if you recommend backing off of investing to be able to save more in anticipation of a new car, or how should I navigate that?

22:02Dave Ramsey:Typically in a budget, if you're only putting 15 % away and you have your emergency fund and you have zero other debt, you should have some margin to save for a car.

22:12George Kamel:Yeah, I do. I have about$13 ,000 saved up right now. Okay,

22:16Dave Ramsey:and what's the car you're driving worth?

22:19George Kamel:It's probably worth about$15 ,000, but it, you know, it has 150 ,000 miles on it.

22:25Dave Ramsey:So if you bought a car today, you could buy almost a$30 ,000 car.

22:29George Kamel:Right, yeah.

22:30Dave Ramsey:What's wrong with that?

22:31George Kamel:Well, I worry because the last two cars I've had have essentially blown up and I've been like forced to go into debt to be able to get a new vehicle. So I'm just, it just kind of worries me a little bit.

22:43Dave Ramsey:You're worried that a$30 ,000 car is going to blow up?

22:47George Kamel:Well, no, not a$30 ,000 car. That's what we're talking about.

22:51Dave Ramsey:That's what we're talking about, aren't we?

22:53George Kamel:I guess so, yeah. Okay. I think you have the trauma from the past vehicles stuck in your head and a$30 ,000 car that you do a pre-purchase inspection on and you buy a quality make model year yeah it's going to be just fine so how much are you looking to spend well i mean the new the new and used ones i'm i'm looking at with like similar to my current vehicle are about that 40 000 range so that's what my goal is i'm trying

23:18Dave Ramsey:to get to 40 and i'm just holding my breath what is your vehicle there it's a 2019 jeep grand cherokee okay and what are you wanting a brand new jeep or almost brand new jeep you want another jeep

23:32George Kamel:Probably, yeah. What were the ones that blew up on you? I don't know. Should I give that information over the radio?

23:39Dave Ramsey:Inquiring minds want to know. Did they blow up or not? If they blew up, it's okay to say it.

23:43George Kamel:I mean, my previous one before this was a different type of Jeep, and then before that was, oh, I can't even remember, but it was like a small little get-around car. Okay, are you single? I am. I'm a single mom.

23:55Dave Ramsey:What is your household income?

23:58George Kamel:I make about$6 ,000 a month.

24:00Dave Ramsey:Okay. Okay. How long have you been listening to us?

24:06George Kamel:Well, I actually, when I finished my school, I kind of did a deep dive to be able to pay off my student loans and debt by using your method.

24:14Dave Ramsey:Okay, so what do we say about cars, the maximum car you ought to purchase? Do you remember?

24:18George Kamel:Yeah, I think is it like, I can't remember the ratio, but it's like a percentage of your annual income.

24:25Dave Ramsey:Like half your annual income.

24:27George Kamel:Right.

24:27Dave Ramsey:Which would not be 40. yeah it's too much okay i wouldn't spend that much on a car in your situation so i'd go get a 30 and and so two things i want you to come away with and george said it and i don't want you to miss it get a pre-purchase inspection if you got a christian brothers automotive in your area go by and see them they do a great job if not find a reputable independent um car mechanic and ask them what they'll do, what they'll charge you for a pre-purchase inspection might be a hundred bucks. Take it by there. The second thing I'm going to tell you is to read about the particular type of car that, um, that you're going, that you're thinking of purchasing and what the reliability factor is.

25:13Dave Ramsey:Cause there's all kinds of gossip out there on cars and it may or may not be accurate, but at least you want to read about it and try to figure it out.

25:20George Kamel:You might learn that specific

25:21Dave Ramsey:You could also ask that guy, that mechanic, you know, does this car have a good reputation? Okay. I'll give you an example. The car you're talking about does not have a good repair reputation. It's not got a good repair reputation. So you may want to look elsewhere, but you can look around, make sure. They may have fixed them. They may be better in recent years. But five years ago, I would have told you just don't buy that based on just what I've heard. Okay. The one you're driving. The one you're driving. Okay.

25:51George Kamel:And the last one you had blew up. So maybe it's time to switch. We switch makes and models and try something else.

25:57Dave Ramsey:Just check it out. That's the point. You don't do it based on a couple of guys on a podcast. But I want you to check it out. I want you to read. If you can get a hold of something like Consumer Reports or anything on Kelly Blue Book is fine. There's lots of articles. Edmunds Car Guide's got really good articles on repair things and things that are going on. There was a few years ago. Oh, gosh, it's a long time ago now. I said decades ago, but I remember Cadillac came out with a front wheel drive and they put an aluminum block engine in the thing and they were, you couldn't find any of them with an engine in them.

26:29Dave Ramsey:They'd all blown. Oh, it was a piece of crap. And so anybody looked at that Cadillac, looked at it cross-eyed that knew anything about cars and said, don't buy that car. That's, that's 20 year old information. Okay. It's not current information, but, or older even probably 30. But anyway, point being, you can find out from a mechanic, from people that know cars that that model has issues, that type of car has issues, don't go that way. And you can just research that and figure it out. And so I want you to do that, and then I want you to have the car checked out. And I think$30 ,000 is plenty to spend, so you've almost got enough now.

27:02George Kamel:But please do not walk into the Jeep dealership, because they're going to steer you to the new cars and say, we can get your payment down to whatever you want it to be. You've got to go to an independent dealers where you're probably going to find the best price, paying cash. No payments.

27:14Dave Ramsey:No payments.

27:15George Kamel:And if you're not a millionaire, always buy used.

27:17Dave Ramsey:Yeah, no payments. No car payments. Did you hear me? No car payments, people. Car payments are the siren song of the middle class. If you want to be middle class or below the rest of your life, keep a stinking car payment. Well, I was forced to buy a car. Well, I had to buy a car. That car's not safe. It needs an airbag. And you're talking to a guy who, when I was growing up, the only airbag in the passenger seat was your mother-in-law. Oh, sick burn. There was no airbags. So come on, guys. We lived through all of that. So you can get a car that's safe and reliable that you pay cash for and no car payments.

27:59Dave Ramsey:It's the largest thing that people buy that go down in value. And they all go down in value like a rock. That's where Chevy got that. All right. Open phones at 888-825-5225. Steve is in Idaho. Hey, Steve. What's up?

28:17George Kamel:Hey, how are you doing, Dave?

28:18Dave Ramsey:Better than I deserve. How can we help?

28:21George Kamel:So I have a house that I'm in the market to sell. I'm up here in Bonnors Ferry for about$500,$550. And we want to move down to Coeur d 'Alene, which is about an hour and a half south of here. And I have a daughter and granddaughter that live down there. So we thought we'd be closer to the granddaughter and help out. She's a single mom, help out with stuff. And when we put up ourself, we'd just go down and buy something down there. But lately I've been thinking maybe I should just rent rather than buy.

28:57Dave Ramsey:How old are you?

28:58George Kamel:What do you think of that? I am 68.

29:00Dave Ramsey:Okay. Are you in good health?

29:03George Kamel:Oh, yeah, pretty good.

29:05Dave Ramsey:Okay. So you probably make it to 88 or 90-something on average.

29:11George Kamel:My dad made it to 98. Okay.

29:12Dave Ramsey:Well, somewhere in the 90s. All right. So we've got 20, 25 years. So the house that you're in is$550 ,000. Yeah. How long you had it? Ten years. Okay. What did you buy it for?

29:27George Kamel:Two...

29:27Dave Ramsey:So it doubled in ten years. Two, 30. And guess what? Ten years before that, it was$100 ,000. Yeah, probably. Yeah. So you just lost$400 ,000 in this conversation while you were a renter.

29:42George Kamel:Well, maybe, but... No, not maybe.

29:44Dave Ramsey:I mean from 68 to 98. Okay.

29:47George Kamel:Oh, okay. That's 30 freaking years.

29:49Dave Ramsey:You lost 400 grand or 500 grand if you don't go buy a house.

29:53George Kamel:I don't have to mow the lawn. I don't have to pay property taxes. Pay a guy to mow the lawn. Right now. You're paying property taxes to the renter.

29:59Dave Ramsey:Well, for$400 ,000 or$500 ,000, you can pay somebody to mow the lawn.

30:06George Kamel:Yeah, I could do that. So you don't think that's a good idea?

30:11Dave Ramsey:I'm positive it's not a good idea. What would a house over there cost?

30:16George Kamel:I could buy, this house is about 3 ,400 square feet. I could buy. So you downsize and pay cash?

30:23Dave Ramsey:Yeah. If you pay cash for a house and you own it, your costs don't go up except the insurance and the taxes. If you're a renter, 100 % of the rent goes up. Can you imagine how much your rent will go up in 25 years? You want to screw up your retirement budget? You want to mess up that golden rocking chair on the front porch? Yeah, be a renter. That'll screw it up. Don't do that, man.

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33:03George Kamel:Today's question comes from Jill in Maryland. When you say invest in something you understand, do you mean the investment category, such as balance, growth, and aggressive growth? Or are you referring to the mutual fund details themselves, such as admin fee, performance, what types of funds it contains, et cetera? I want to invest for retirement, but currently my money is just sitting in a savings account because I don't know what questions to ask. So you say don't invest in anything you don't understand. So how do you understand it? But I think part of that is knowing how the thing works, the mechanics of how a mutual fund works.

33:39George Kamel:A lot of us are putting money into this fund. It's across 90 to 200 plus companies. We're rooting for the growth and revenue in this company and therefore the shares we bought grow. Okay. Can you define a mutual fund?

33:50Dave Ramsey:That's your start. Can you tell me how a mutual fund works in general? And then if you're going to buy a growth stock mutual fund, as an example, can you tell me what that is, what the difference in that and a growth in income are? Not a substantial difference. Growth is buying stocks. It's a growth stock mutual fund. So it's buying stocks that are growing.

34:09George Kamel:Because every mutual fund has an objective. So the objective is growth.

34:12Dave Ramsey:And it's usually in the name.

34:14George Kamel:So growth and income. A bond mutual fund.

34:16Dave Ramsey:Growth and income will have bond and large company stocks. And it's the calmer of the two. Okay. That's the first two things. So what is a mutual fund? How do they work? Basics. Primitive. Like a seventh grader can understand it. Okay. Most seventh grade. And then secondly, the type of mutual fund you're looking at. And then thirdly, understand the history of the particular fund and the market in general. Okay. So for instance, a lot of the mutual funds have really good. I was looking at one the other day with American funds. Okay. So I'm not endorsing. I'm just saying they got a great brochure.

34:55Dave Ramsey:so you can pull up the american funds brochure on ica investment company of america which is a growth in income okay that thing's like 80 something years old it's ancient been around forever it's got a good track record multi-billion dollar fund and they've got a great brochure so you can say okay what does this fund do it's a growth in it what does this fund do when the market's up what does this fund do when the market's down what does this fund do when there is when the president decides to bomb Iran. And you look back in history, and it'll have different dates of things that happened and what that fund did and what the market did during those dates.

35:36Dave Ramsey:The reason you want to get a little bit of a history lesson is that you're trying to be comfortable when things happen in the current or right over the edge of the future that you don't get nervous and jump out. okay so if you've studied the roller coaster and the roller coaster is safe because what goes down what goes up will come down what goes down will go up and we can ride the roller coaster with safety then it's just the thrill of the ride but if we think the thing might come unjointed while we're on it and land on our head then we're not going to feel good about that but that's knowledge of that roller coaster an example would be this okay if you drive down the street and you're looking at homes and the vibe in the air, the way the homes are kept up, the way cars are parked, the people walking around, you're looking at them, you don't feel comfortable.

36:37Dave Ramsey:Well, you're looking at what's going on in the neighborhood and you're making a decision. This isn't a neighborhood I should buy in. You're driving down the street. Everything's very calm. um, we don't even see any cars. All we see are 25-year-old oak trees, you know? Well, this is an older neighborhood that's very settled. Feel comfortable with that. And you can look at the track record of that neighborhood and say, in the past 20 years, what has that done? And this other neighborhood might be trending the wrong way. And so same thing with mutual funds. You get comfortable with the track record, the history.

37:09Dave Ramsey:And you've heard the disclaimer, past performance is not indicative of future returns. That is disclaimer bullcrap. Of course, past performance is indicative of future returns. If you look at the past performance of Scotty Scheffler, who just won a golf tournament, it is indicative of whether he's going to win next week or not. You know, if you look at the past performance of Michael Jordan, you can tell he's going to win basketball, right? It is indicative. Of course it's indicative. You know, you look at the past performance of this neighborhood, it's indicative that houses are going to continue to go down.

37:48Dave Ramsey:This place has turned into a ghetto. Of course it is. So ignore that. Look at the past performance. Get comfortable. This fund has outperformed the S &P 500, 19 of the last 20 years. Okay. But you think it might do it again. This fund has never outperformed the S &P 500. You think it ever will?

38:11George Kamel:It probably won't.

38:11Dave Ramsey:You think it ever will? I mean, this is pretty basic common sense stuff, right? So A, what is a mutual fund? B, what's the category of mutual fund mean? What am I buying? And C, the track record of the fund and the market. If you understand those, you don't have to understand 12B1 fees. If you understand those, you don't have to look at expense ratios. That stuff doesn't kill you. What kills you is getting scared and jumping out.

38:34George Kamel:Or investing in the wrong thing, which is a lot of where that advice comes from. If you can't explain it to me and you got all your money sitting in it, that's dangerous.

38:41Dave Ramsey:Which is exactly why the crypto bros are all mad at me. Because the crypto has only one reputation. None.

38:50George Kamel:And they can't even agree on the definition of it and what it's doing. What it is or what it is.

38:55Dave Ramsey:Well, it's blockchain. You just don't understand. Yes, I do understand blockchain. I understand mining it. I understand the electrical costs. I understand all that. None of that matters. What matters is what's the track record of this sucker? scares me to death. That's quite the roller coaster. Way up, way down, way up. I mean, what's the track record of gambling with a slot machine? Lose all your money until just before you leave, and then you make your money back so you stay another four hours and lose all your money again. That's the track record of a slot machine. So understand what the track record of this stuff is, okay?

39:30Dave Ramsey:And then decide whether this is a stupid idea or a good long-term investment. And that's the route I would go. But this lady, Jill, George, she's in my category. When you ask questions like this, the mutual fund details such as admin fee performance, what types of funds it contains, et cetera, it'll be stocks it contains. You're probably nerding out a little much there. I think she probably has a natural tendency towards nerd. I don't want you to go so far into this that you get paralysis of the analysis and don't do anything The number one key to investing is do some Standing on the sidelines looking at it Do some a guy asked me the day said you've had eight best-selling books.

40:14Dave Ramsey:How do you write and I said you start writing? And one day you'll finish. How do you know if you're a writer if you're writing? Right We don't talk about it. No, how you know if you're a good writer. You probably never will I'm still not a good writer. I'm a good salesman. So none of these books are dadgum literary works of art. I can tell you that.

40:33George Kamel:But it makes it very readable for people like me. I know. Stopped at a fifth grade reading level.

40:37Dave Ramsey:That's what I am. I'm the guy that puts the cookies on the shelf for regular people, but where we all reach them. But that's it. I'm happy with that. But what makes you a writer? Right. What makes you an investor? Invest. What makes you a wise investor? Invest over time and make money.

40:51George Kamel:And you can be a super nerd and be broke. Oh, all the time. That exists. You don't need to know about all the nitty gritty. Now we do that like our Investing Essentials event. We actually do walk through this. We have a chart and graph and here's how to pick the mutual funds. So we get a little bit nerdy.

41:07Dave Ramsey:If you're having trouble sleeping, we are doing an event you can watch and you'll go right to sleep. It's the super nerd event. It's called Investing Essentials. George loves it. I have a good time. It wakes me up. It energizes me to choose mutual funds. it's the type of event that i said that i got in business to not do and now i'm doing it so sorry well the people demanded it they're like go deeper it's david ramsey's investing playbook i'm going to show you what i do how the all the nerd analysis i do on real estate i'm going to show you all of it and you're going to love it if you're a nerd but um if you're not you're going to be going i you know i just secured my insomnia there's a few tickets left i think it's a virtual event so of course there's tickets left there's room always room in that room so i like um yeah Come on out, guys.

41:49Dave Ramsey:It's going to be, what, September 1st and 2nd?

41:50George Kamel:Yes. And again, it's virtual, so you can join us from anywhere. There's even a replay you can catch if you can't make it each night for those two hours. We'll do our best to make the root canal not hurt. Once you start going into formulas for internal rates of return, that's like some goodwill hunting stuff, Dave. I got to admit.

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43:38Dave Ramsey:Welcome back to the Ramsey Show in the Fairwinds Credit Union studio. David is in Columbus, Ohio. Hi, David. How are you? I'm doing great. Good. What's up?

43:50George Kamel:Well, I appreciate all your advice for over 20 years since I read that first Total Money Makeover.

43:55Dave Ramsey:Well, thank you, sir.

43:56George Kamel:I've got one and a half questions. I can give you the logic behind them. I give you as much of my situation as you want. And if you agree with me, I may have some questions of how to implement it.

44:07Dave Ramsey:Want to start with the questions? Sure. Have at it. All right. should I set up a trust that would pay each of my three sons 25 % of their individual incomes per year

44:21George Kamel:until their individual retirement age when they would receive a final cash disbursement?

44:28Dave Ramsey:That's the first question. How old are your sons? They are 37, 41, and 49. Okay. All right.

44:44Dave Ramsey:But the thing I like about the plan, I've never heard this before, is the idea that if they don't work, they don't get anything.

44:52George Kamel:Exactly. I want to encourage them to build their own lifestyle instead of me buying them a lifestyle.

44:58Dave Ramsey:Yeah, instead of turning them into trust fund morons. I mean babies. That's the plan. Exactly. I like that.

45:05George Kamel:What's your estate worth right now? Right now, it's about$2 million net worth.

45:11Dave Ramsey:Okay. You've done a great job, David. I love that plan, and I've never heard that. I'll probably steal it. It's that good. I like it a lot.

45:19George Kamel:I want it to be out everywhere.

45:22Dave Ramsey:Yeah. I made it up. The thing I want to guard against with a few additional provisions in the trust is that if someone is completely off the ranch, I don't want them getting anything. I'll give you a bizarre example, okay? And you may have heard me say this on the air just to wake people up. If one of them is doing heroin, I don't want to give them the money for an overdose.

45:48George Kamel:Correct.

45:49Dave Ramsey:Okay. And so if one of them is doing X or Y that you don't approve of or that you think is harmful to themselves, we don't want to fund that. in any way okay so if you're making a hundred thousand dollars a year um no i'm not gonna give you twenty five thousand dollars a year if you're doing heroin so somehow or another if there's there's got to be some kind of a character or um i i would want it uh there is in my trust uh or more or um ethics type of a thing to protect them from themselves not because i'm trying to control from the grave okay because people become more of what they are so 25 of what they earn and then they get a lump sum upon what, retirement?

46:34Dave Ramsey:Yes, full retirement age, whatever. So 65 or whatever you want to call it?

46:40George Kamel:68, yeah.

46:41Dave Ramsey:Okay. All right. And the money is invested until then?

46:45George Kamel:Correct.

46:49Dave Ramsey:Okay. And you're going to splice this off as like you've got$3 million, like a million, million, and a million to pull this off?

46:59George Kamel:No, I want to do it differently because I think you should – the money is unrecoverable if you didn't work. So it's one lump sum. The trust would have all the money, and each of them pour individually from the same trust.

47:14Dave Ramsey:Yeah, that way the ones that are making more are going to drain it down more. Yeah, exactly. And then we're all going to get the same amount at retirement?

47:23George Kamel:No, no, no. The oldest one will get a third of it when he gets to succeed. Okay, I see. A third of what's remaining at the time. Correct.

47:33Dave Ramsey:Okay. All right. It's not a bad formula, David. I kind of like it.

47:37George Kamel:As it stands, are they people of character, working full-time, married, healthy? Right. Okay. So this isn't coming from anywhere. They're all independent now, but I just don't want to drop a quarter million to$1 million on them at one time. Well, do they all have homes right now? No, none of them do. They're all rented. Okay. Okay, because I'm just wondering, there's another sort of train of thought, which is help the kids when they need it most, which is in their 20s, 30s, 40s, versus at 65 when they've already built their own wealth. So it's another thing to think about.

48:10Dave Ramsey:That's not a bad idea. You could put a thing in there that you'll do a 50 % or 100 % match for down payments. Well, what I thought to answer that question, that's the second half question, is should I start giving them 10 % of their incomes now while I'm alive, just for a birthday gift? wouldn't hurt.

48:28George Kamel:And I would enhance their current lifestyle, you know, 10 % while I'm alive. Yeah. But I'm not going to buy them into a house they can't afford, you know, no. I'm not saying to do that, but there is, you know, I'm 37, so I'm the age of your youngest kid. And if I'm not a homeowner yet and I want to be, and I'm working hard, but homes are expensive, man, I'd love a gift now versus 65 or 25 % of my income, you know, staggered. So there's just something to think about there.

48:55Dave Ramsey:You can play with the numbers both ways and see how it ends up.

48:58George Kamel:But yeah, you would need a – so the will will tell you who gets what. The trust. The trust will then control the timing of all of that. So you would need something like a revocable living trust in order to set up something that complex.

49:08Dave Ramsey:That could be formed upon death. Yeah.

49:11George Kamel:A family trust is formed upon death. But I could choose to do something with their housing now while I'm alive.

49:17Dave Ramsey:Exactly. You know, there's nothing that stops that. Exactly. And I think I'd probably go pretty generous on that if you can figure out a way that you feel like you're not, quote, spoiling them, unquote. But if I can get them all in a paid-for house pretty quick, if they're behaving and they're good, reputable human beings, I'd want to try to do that more so than the other stream of income or as much as the other stream of income. So I might lean a little heavier over on that side while you're alive than the other. But it's a neat formula. It's got a good incentive plan in it. I like the way it's thought out.

49:57Dave Ramsey:And, you know, they keep somebody from, you know, sitting on the back of a yacht saying, peel me a grape, you know, because that's what you get into. And we don't want to create a reality show out of our children.

50:11George Kamel:And so that's the good news is, you know, it's not like you have 25 million. We got two right now. So 250 grand probably won't destroy your child where they go. I can retire today on a beach. Yeah.

50:22Dave Ramsey:You know, you get them in a paid for house. by some formula, some methodology, I don't care what it is, that continues along the same idea of incentivizing, inspiring, lifting up rather than allowing them to be a financial lobotomy. That's what we want to avoid. So very cool. Neat idea, David. I just learned something.

50:43George Kamel:Now, Dave, I don't know how you set up in your family. I know you guys have an annual planning sort of conversation with the trust, but what are some of the sort of mainstay things everyone to think about regardless of the size of their estate? Because I've heard you say it doesn't need to be equal. Like not, it's not like every kid has to get a third.

51:01Dave Ramsey:No, no. And they're not in his formula. They're getting based on, you know, they're proving themselves, so to speak. And I love that. And not based on age or anything else. So just on performance. So I think the biggest thing is this, and David is, he's past this, but some of you were talking to like you, You and Whitney have little kids. The biggest part of estate planning is raising good kids that money won't ruin. That's 90 % of the problem is if you raise twerps and you give them money, they're very wealthy twerps. I mean, it's all it is. And so, you know, it's all about parenting and raising kids that know work ethic, that have generosity, that know how to save.

51:45Dave Ramsey:They know how to function as emotional and spiritual adults.

51:48George Kamel:So the question is, do they have the character to then carry the weight of?

51:52Dave Ramsey:You're preparing them to carry the weight of wealth that's going to be left to them.

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54:00Dave Ramsey:George, one of the most confusing things on the planet for folks dealing with, helping with their parents, for folks like me that are in their 60s, is this ridiculous program. I can't stand it, but it's just there. It's called Medicare. Medicare, when you look it up in the Greek, means confusing. People get more tripped up over this than anything else. So let's just start out. Some of the main questions we're getting on this, our guys ask us to go into it and just cover the basics on this. First question is, what is Medicare?

54:34George Kamel:What is Medicare? So this is a federal health insurance program primarily for people 65 and older. So you hear people signing up, hey, it's my 65th birthday, time to sign up for Medicare. Very exciting rite of passage. And some Medicare coverage comes directly through the federal government. That's parts A and B, we'll talk about that. And other coverage comes from private insurance companies that have to operate under federal guidelines.

54:57Dave Ramsey:Side note, you often hear in the same sentence, Medicare, Medicaid, Medicare, Medicaid, Medicare, Medicaid. They have nothing to do with each other. Medicaid is welfare. Medicare is available regardless of your income. So the way I think about it, you turn 65, you can sign up for Medicare.

55:16George Kamel:Medicare is about age. Medicaid is about income and assets that helps you. Our lack of income and assets. Yes. So let's go through just the four main parts. Part A, I think admissions. So this is hospital coverage. This is the part you've generally paid Medicare taxes toward while working. So all those payroll taxes going toward Medicare, it's covering this part. What we used to call hospitalization. Yes. And then you've got Part B. So in my head, I think basics. So think medical coverage, doctor's visits, outpatient care. And these two parts together, this is called original Medicare. It's what it was originally set out to do.

55:52Dave Ramsey:And then we decided it's a federal program, so let's complicate it.

55:55George Kamel:But of course, it doesn't cover everything. So now all these supplemental plans came to be. So you've got Part C, which is Medicare Advantage. So think C for combo. So it's a private all-in-one alternative. It combines Parts A and B, and you can also add a few other things like dental and vision and all that. And these plans do typically have more restrictions on which doctors and providers you can use.

56:15Dave Ramsey:Yeah. So, but keep in mind, Part C is the one you pay for. Yes. Because that's Part A and B, you've already paid for with your taxes. You paid for all of it, but you're paying for it with your taxes. Okay. So A and B, the government furnishes. C, you purchase. And it's your add-ons to A and B.

56:33George Kamel:Yeah. It's the combo plus the add-ons. And you got Part D. Easy to remember this one. Think drugs. Prescription drug coverage is Part D. And outside of those parts, there's something called Medigap. And again, you pay for that. Yes. You're going to pay for that as well with a premium. And then Medigap or Medicare supplement plans think this is covering the gap. So private plans to help cover some of the deductibles, co-pays, other costs that original Medicare doesn't cover. All right.

56:59Dave Ramsey:Question two, which Medicare plan should I get?

57:03George Kamel:It depends. Everyone's least favorite answer. So there's hundreds of plans available, and it's good to get personalized help from a qualified Medicare advisor.

57:12Dave Ramsey:But that would be you automatically get A and B. and what type of C plan, what type of add-on plan, and what type of prescription drug or any other supplement, Medigap plan, those are the ones that get confusing and you're buying them.

57:25George Kamel:Yeah.

57:25Dave Ramsey:So you need to get someone to look at your situation, give you a customized response to your particular situation of which of those you need. If any, you're not required to buy anything beyond that.

57:37George Kamel:With anything this big, there's always going to be some grifters, scammers out there. So the The federal government has actually taken legal action involving major companies over allegations that there was financial incentives that influenced how Medicare Advantage plans were marketed or sold. And these plans can have more restrictions on which providers you can use. Doesn't mean they're a bad option. They can make sense for some people. But if you're getting pressured towards, hey, you've got to get this particular policy, it could be because that's what pays them the most. So you want to be aware of that.

58:05George Kamel:Probably is.

58:06Dave Ramsey:Yeah. If somebody's steering you a certain way and they haven't done a full analysis and shown you why this is the best for you, but instead just blindly do what I say. This is the science. Yep. You know, give you a Fauci answer. Right. Then don't do that. Right. OK. Number three. When do you sign up?

58:25George Kamel:So there's two major time frames to know. The first is your initial enrollment period. So this is a seven month window, the three months before you turn 65, the month you turn 65 and the three months after. So it's sort of bookended there. So I'm born in May. So February through August would be my initial enrollment period, the year I turned 65. And this one's really important. If you miss the appropriate enrollment window, you can get some long-term penalties associated with that on certain parts of Medicare. And then the other one is annual enrollment period. So this one's ongoing October 15th through December 7th each year, and you can make certain changes to your Medicare coverage.

59:00Yeah.

59:01George Kamel:So those are the two to note, the initial one and the annual one.

59:03Dave Ramsey:Let me stop you a second. If you are in a situation like I am in where you don't need Medicare, I have a Ramsey plan. I'm over 65. I missed the enrollment window. They're not going to send me a bill for penalties. They'll only send me a bill for penalties if I later on choose to sign up. But I have my health care taken care of without the government, with health insurance plan here at Ramsey and with wealth. And so I am not in Medicare. A lot of people are in that situation, especially people that listen to this show. So don't be thinking you're going to get a penalty unless you join later. And you do have annual enrollment period October 15th through December 7th where you can make changes and everything else.

59:45George Kamel:So the last piece here is a lot of people think, okay, great, I got Medicare, so my long-term care is covered. No. No. What's the difference here? Medicare primarily covers health care expenses like doctor's visits, hospital stays, prescription drugs. Long-term care is very different. We talk a lot about on the show long-term care insurance, which is that's your nursing home, in-home care expenses, and Medicare generally does not cover those ongoing custodial long-term care costs.

1:00:10Dave Ramsey:Medicaid will pay for a welfare poor person's nursing home. They will not pay for someone that is not poor for the nursing home. And so we have people doing stupid things like Medicaid fraud, welfare fraud, where they move a bunch of assets out of mom and dad's name to make mom and dad appear poor so they can put them in the welfare nursing home.

1:00:35George Kamel:Medicaid. Bad idea.

1:00:36Dave Ramsey:Bad idea. That's criminal activity, and you will run into serious problems doing that. Do not do that. And by the way, set yourself up so you don't need welfare. Hello. This is saving money for retirement, becoming a millionaire. That's what we're doing here. So long-term care insurance, if you've got assets under a million dollars and you're over 60, go buy long-term care insurance. It has nothing to do with this discussion.

1:00:58George Kamel:That's right. And remember, the purpose of insurance is to transfer risk that you can't take on from you over to the insurance company. That's why you pay that premium. And Medicare and long-term care coverage, they address different risks. So you've got to plan for both. And what's really cool, Dave, is we have a great partner called Chapter that helps people navigate this crazy, messy water that is Medicare. And we have a whole guide that we created for Medicare that actually walks you through this and much more. It's a great asset to send to people that you love that might be in this phase of life or you might be in it.

1:01:29George Kamel:So if you want to check that out, you want to learn how to choose a Medicare advisor you can trust, just go to RamseySolutions.com slash Medicare guide. We'll also drop a link to that in the description.

1:01:38Dave Ramsey:So here's the thing. A and B, which is hospitalization, doctor, the basic coverage, outpatient, that kind of stuff is furnished by the government. C is add-ons that you can do to soup that up. That's where people get tangled up. D is prescription drug coverage. That's also where people get, and Medigap. These are the three things. So C, D, and Medigap are where people get tangled up, and that's where you need a pro that can help you untangle this and look and go, in your situation, you don't need that. You just need this. I would self-insure through that over there. I wouldn't buy that. I would just buy a little bit here, and a pro can look at that.

1:02:16Dave Ramsey:Our pro can look at it and go, look, you're pretty vulnerable. You need to buy three things here. And they can help you customize it to your situation, and that will keep you from getting screwed. This whole space is scummy. It's full of people that are inept and competent at best, crooks at worst. And so you need to get with someone like our guys at Chapter that can sit down and walk you through this, and you understand what you're doing and where the advice is coming from. Always, Ramsey people are always going to tell you, you need the heart of a teacher. Whoever we're sending you to needs to be at the heart of a teacher to help you walk through this.

1:02:54Dave Ramsey:It's complicated, but it's not so complicated you can't figure it out. It's really not rocket surgery. You can do it, but it's good to have somebody on your team to teach you and walk you through it. So RamseySolutions.com slash Medicare Guide. Check out the folks at Chapter.

1:03:12Thank you.

1:03:40you

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1:05:15Dave Ramsey:Hey, guys, if you like this show, we could use some help. Please hit the subscribe button. Please hit the like button, all those things, and share the show. Send a link or a share button, whatever it is you've got on your particular platform, and let people know we're here. We would appreciate that. James is in Memphis. Hey, James, what's up in your world?

1:05:37George Kamel:Hey, Dave. I'm just trying to work through my day here. Decided to call in.

1:05:43Dave Ramsey:Certainly. How can we help?

1:05:46George Kamel:Trying to figure out if I can retire from my business early. And my wife and I are kind of nervous about it and needed some advice.

1:05:58Dave Ramsey:Okay. Why do you want to retire early?

1:06:01George Kamel:Well, I'm a home builder. and some of mostly what I've done for the past 15 years is spec home building and I'm not wanting to continue that route.

1:06:14Dave Ramsey:Okay. All right. That's different than retiring. I mean, you can start building custom homes.

1:06:21George Kamel:Well, I've done that also and there's quite a lot of competition in our area and just kind of lost some passion for the business.

1:06:30Dave Ramsey:Okay. So what do you want to do with your life?

1:06:34George Kamel:Well, I'm on a vision quest to figure that out. I don't exactly know, but just something a little more fun and not as stressful.

1:06:42Dave Ramsey:Okay. All right. Don't mind you doing that. The idea of sometimes when people say retire, they mean sit down at 53 years old and do nothing for the next 40 years, which is not good for you. No. And I'm not recommending that.

1:06:57George Kamel:So currently you're retiring from something instead of to something.

1:07:00Dave Ramsey:Yeah, and I would retire to something. So does your business have a value, or will you just close it? I would just close it. Yeah, it's home-based. There's no value to it, really. Okay, but you've made a good living, and it's been good to you. So we're going to find out what our next phase is. So what's your net worth now? 3.2. Good for you. And how much of that is in retirement accounts? 400, roughly. So most of it is not in retirement accounts?

1:07:31George Kamel:Correct. Okay.

1:07:33Dave Ramsey:What's it invested in?

1:07:34George Kamel:I have to sell some stuff. We have a very nice home with some additional acreage, and I have a plot of land.

1:07:44Dave Ramsey:What's the home worth?

1:07:47George Kamel:With the acreage, it's 1.5.

1:07:49Dave Ramsey:Okay. All right. All right. So you've got a million and a half otherwise. All right. A million and seven otherwise. And how much the extra acreage, the other acreage you're getting ready to tell me about the plot of land is worth what?

1:07:59George Kamel:I have a plot of land that's worth just over a million. I think, and I have some heavy equipment that I own.

1:08:06Dave Ramsey:Which you won't need, so we'll sell that. What's that worth?

1:08:11George Kamel:$400, roughly.

1:08:12Dave Ramsey:Okay. Okay. So, I mean, if you took the plot of land and the heavy equipment and sold it, you'd have about$2 million to invest. That should create$150 ,000,$200 ,000 a year in income for you while you go on your next vision quest. if you want to keep the land and the house and only sell the equipment you're going to be short of funds so i mean just do some rough numbers if you want in your head just say okay whatever whatever amount i'm going to put to work for me if i put it to work at a good mutual fund it's making 10 or 12 if i pull 10 off which i wouldn't want you to pull that much off but just easy numbers 10 so i got a million dollars 10 is 100 000 i got two million dollars 10 is 200 000 right?

1:08:58Dave Ramsey:Million five, I've got$150 ,000 to work with. That's the maximum you could pull, and I wouldn't want you to pull. I'd rather you be 8 % or below on your drawdown. That way, that lump sum will run in perpetuation. Does that make sense? Yes, sir. And meanwhile, you're going to make a living doing the next fund thing and don't even need this money. Right.

1:09:20George Kamel:What were you making on average in the business? What were you bringing home? I mean, the good years, we'll make$500 ,000. Last year, we lost money. This year, we'll make a little bit. It's just been a roller coaster for I've been doing this.

1:09:36Dave Ramsey:Yeah, it's a scary business. So you got stuff under construction now?

1:09:44George Kamel:I have one spec home, and I've done a few customer-paid jobs this past year that have been pretty good.

1:09:50Dave Ramsey:Okay. All right. Well, I mean, you really do need to figure out where your feet are going to land and then what we're going to put in a pile to create income. And it sounds like the land, the plot of land, I think you called it, and the heavy equipment would be a big enough pile to live off of. But then also you need to figure out while all that's happening, how we're going to make a living, what we're going to eat with, and so on. And I'm sure you've got some cash laying around. Yes. A five-year plan of generating zero income, still trying to find yourself, is not a good five-year plan.

1:10:24George Kamel:Yeah. Do you know your yearly expenses, how much it takes to run your life? For our personal, it's about$90 ,000. We can have a little bit of fun, and that pays for our groceries and everything. You guys have no debt? No debt? Well, I have some debt, yeah, business debt.

1:10:45Dave Ramsey:So I'll have to pay that off in the process? How much business? On that how? On one spec or otherwise?

1:10:51George Kamel:the one spec i owe about 400 000 i have one bulldozer that i owe 250 own and then i have one of the land pieces of land i owe 200 000 own okay yeah you got to you got to

1:11:05Dave Ramsey:clear all of that while we're clearing this but you're going to sell off the spec and you're going to sell off the dozer and the piece of land um if it's in the plot that we were talking about selling it's just going to reduce the size of the of the golden egg or of the goose that's laying the golden eggs, right? Correct. And so, yeah, you just, you're, so, okay, so you've got assets.

1:11:26George Kamel:It'll shorten your runway there, but.

1:11:27Dave Ramsey:Yeah, but I mean.

1:11:28George Kamel:I don't think you're going to make zero dollars.

1:11:30Dave Ramsey:You need to lay out a plan with your SmartVestor Pro, is that I'm going to liquidate these things and put them in good income producing mutual funds to live off of, and meanwhile, go find yourself and figure out what your next chapter is, and that's going to be fun. And let Let me give you a hint, okay? The interesting thing is this, James. All of our data shows that people, especially in a situation like you're in, it's even more accentuated, the highest income decade of your earning life is in your 50s. Okay? And the reason is it takes about that long to quit doing all the stupid stuff and to hone your craft and hone in on what you're good at and nail it.

1:12:16Dave Ramsey:And so my point being that if you choose this carefully, it might not just be fun. It might be more lucrative than anything you've ever done in your life. It would not be unusual for you to make triple the income you used to make by the time you're 58 in this scenario. So being more fun does not necessarily mean I don't make money. Yeah. It could mean that you just hit the sweet spot, you know, and you just nail it and the ball goes over the fence. You know, you swing the bat and it's that certain kind of sound when it makes contact and it goes right over the fence. And that's where you're sitting.

1:12:55Dave Ramsey:You know, you've done stuff that what you call stress, other people would be completely debilitated by. What you call fun, other people would call stress. because you've already learned how to run a business and juggle and handle subs and run down timelines and deliver properties and keep the stinking bank off of you. I mean, doing what you've been doing, running, you've been pretty massively successful to get where you are doing specs and not go broke. So tip of the hat to you, sir. I think you're in a really good position.

1:13:28George Kamel:And you got some homework here to sell off all this stuff, pay off the debts, and kind of see where you land with that pile of money. give yourself a little bit of runway, but let's aim at something.

1:13:37Dave Ramsey:The number of times that we've talked to people in a situation where I'm dealing with wealthy people that they went bankrupt early, had to find their way like I did, and then they sold out of something or did a major business model shift away from something they were working on but used the same sets of everything to go a different direction. And in an AI world, that's not a bad thing to do. And then they quadruple their income and they're just printing money. It's like they got a printing press in their basement. You know what I mean? It's just like they're bailing it.

1:14:14George Kamel:Especially with entrepreneurs. They have a hard time not entrepreneuring. They're just going to find their way to the next problem to solve. It's what they do. It's hard to stay put.

1:14:22Dave Ramsey:It could be something, an invention that's been scratching at the back of his head, itching at the back of his head.

1:14:27George Kamel:Yeah, what's the biggest problem you've experienced in 15 years that you think you could solve?

1:14:31Dave Ramsey:Yeah.

1:14:31George Kamel:That's a fun, creative decision.

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1:16:28Dave Ramsey:Stephen is in Buffalo, New York. Hey, Stephen, how are you?

1:16:32George Kamel:Hey, good. How are you guys?

1:16:34Dave Ramsey:Better than I deserve. What's up?

1:16:36George Kamel:Hey, so my question today is to just kind of find out more about wills and trusts and what to do moving forwards. So I guess a little context, I'm 22 years old. My wife and I got married right out of college last May. Fast forward a year to this May, we welcomed our first baby home. Yay! And while she was pregnant, we were doing the stork mode thing, just piling cash. So once all the hospital bills were paid, as of August 1st, we became debt-free. Look at you. Well done, sir. Thank you. I have a disability and term life insurance through Xander, and my wife's working on getting her life insurance now.

1:17:20George Kamel:So kind of with all that, I don't really know much about wills or trusts or anything and how that expands with more kids. So I'm just calling in to get any advice or direction on that if you wanted to share kind of what you guys do with your family. Such a great question, man. You're the most mature 22-year-old I've ever met. I wish I was you at your age.

1:17:39Dave Ramsey:Man, you're going to be so rich, and your family's going to be so well taken care of. Well played, sir. Well played. I'm proud of you. Good work. And a great question. Okay, so some basics on wills. Number one, a will is state-specific. So it has to be written for the laws of your state. And you're in New York, and New York's one of the weird states. So you really have to make sure. California, New York, Texas, Louisiana, four weird states on wills. because Louisiana is French-based law everybody else is English-based law California is granola, New York is close and so that's what you're running and Texas doesn't even think it's a state it thinks it's a republic so it's got all these weird laws so all of that comes into the way they make laws and how they put them in place so it needs to be state-specific and one way to get that is the advertiser we've had for years that helps you do a quick easy wheel which is exactly what you need from MamaBearLegalForms.com So just go to MamaBearLegalForms.com and they'll help you print it all out.

1:18:41Dave Ramsey:The second thing is I would recommend you look at what's just called a mirror image will. And that means your will and your wife's will look exactly alike if you both die. And before we both die, it all goes to her if it's you, it all goes to you if it's her. Pretty simple. okay so the wills if you laid them down beside each other it looks like they came off a word processor and they were exactly the same except the names were changed to protect the innocent right i mean that's all it is so that's the second thing just mirror image will you leave it all to her she leaves it all to you the insurance the primary beneficiary on her insurance life insurance is you the 401k primary beneficiary is you your 401k primary beneficiary your life insurance primary beneficiaries her your secondary beneficiaries on everything that this is the last thing i'm going to teach you is to do a a children's trust if both of you die so how's this baby going to be taken care of if both of you die all the life insurance proceeds dump into the children's trust and the 401k dumps into the children's trust and it's only formed if both of you die while the children are minors.

1:20:01Okay?

1:20:03Dave Ramsey:Okay. That's how mine was set up when my children were minors. But that's why the secondary beneficiary, meaning both of you are, the primary beneficiary is dead, so they go to the secondary beneficiary. Okay? So primary beneficiary is the opposite spouse. But the secondary beneficiary on everything for all of, for both of you is going to be the children's trust because you're leaving your money to your kids. Now that's a very simple way to do it. And then you name who the trustee is. That's who's taking care of the money. And you can state in the trust what you want it invested in, how it's paid out towards the kids while they're minors, all of that.

1:20:42Dave Ramsey:And ours was set up to where the, and then the guardian of the child is a separate person typically than the trustee.

1:20:51George Kamel:Oh, okay.

1:20:52Dave Ramsey:Because they're not personally, The money is different than the person taking care of the kid. You may have different people for that, and it's wise. Yeah. And so if the person taking care of the kid gets a monthly check from the investments in the Children's Trust in the event both of you die, then they got child support on steroids because they're getting a nice check to take care of these kids to raise them. And in addition to that, we had in there our child, if they had a major medical, they could do an additional drawdown on the trust to not put a burden on the family that's raising them.

1:21:23Dave Ramsey:First car purchase, they could do a small drawdown on the trust. In college, they could do a drawdown on the trust. So there's no debt involved and not a burden on the family that's raising them. Then after they graduate from college, they're 22. The trust dissolves, the money goes. Their portion of the trust dissolves, the money goes to them. Or you can stagger that out and give them a little bit over the next few years until they're 30, however you want to do that. That's a fairly standard, fairly easy thing to think through. Mama Bear will walk you through every bit of that. And that's exactly what I did when I was your age, and that's what I would recommend.

1:21:56George Kamel:Yeah, I was just looking up mine on My Mama Bear because I can just sign in and look at the documents, which is awesome. So I was checking ours out, and there's a few major decisions, Stephen, you need to make. That's the hardest part. It's not actually getting the will done. You can do that in 20 minutes. The hardest part is who do we trust to take care of our children? That's the guardian. Who's going to take care of the financial side, financial power of attorney? And then you've got the health care power of attorney. Who's going to make medical decisions if I can't? And so those are really the big things.

1:22:21George Kamel:And then, of course, there's the who gets what, which is pretty simple in your case.

1:22:25Dave Ramsey:I would recommend what we said on who gets what. The health care stuff is just to unplug or not to unplug. That is the question. That's the health care power of attorney. And so typically the spouse is the primary on that. But if there was a car wreck, one of you is in a coma, the other one died. Who's a secondary on the health care power of attorney on whether to unplug this coma or not? Right. all that kind of stuff that's the kind of junk you're looking at and it doesn't take long once you identify who those people are oh and by the way you should let them know you should talk to them i'm going to ask you to raise my child if i die and don't don't let that be a surprise um you know but um and i'll ask you to be the trustee well who's raising the child so and so and so and so is the trustee tell them who the trustee is going to be who's going to be handling the money and who's going to be handling the kid let each one of them know in the event that something does happen in the unlikely event honestly statistically very low chance that both of you are gone before these children are adults very low chance to create the trust like through mama bear legal forms the trust is created technically upon death but it's instructed in the will the will says to create the will states to create this trust upon death of both people if the children are still minors.

1:23:47George Kamel:Okay, and are there any backup guardians or trustees, I guess, if you were all in an accident?

1:23:53Dave Ramsey:Well, the guardian, yeah, I guess if the whole family's on an airplane or something, yeah, I guess you could. I didn't. I didn't go that far. Typically, there's standard terminology in this that a successor trustee or a successor guardian can be appointed. But again, statistically, this is such a low probability, I really wouldn't – I'm not worried about that. If you've done all the other, I think you've been diligent.

1:24:20George Kamel:All right. Thanks so much. Way to go, man. Man, you are on fire, dude.

1:24:23Dave Ramsey:And this is perfect.

1:24:24George Kamel:It's actually National Make-A-Will Month. I know you've been celebrating all month long.

1:24:28Dave Ramsey:Yeah, I got candles on a cake. Not. You're kidding. It's Make-A-Will Month.

1:24:31George Kamel:Well, I want to mention to him – Why don't we not have a month for? Well, I wanted to give him a will for free on behalf of Mama Bear. Do that. Hang on the line, Christian.

1:24:41Dave Ramsey:The guy needs something for free. He's killing it. He's just crushing it. He's killing it.

1:24:46George Kamel:He deserves it. And for the rest of you, we actually have a cool thing running right now. RamseySolutions.com slash willsquiz helps you figure out if you need a will, if it works for you, if a simple online will works. And there's a 25 % off promo code there.

1:24:59Dave Ramsey:Yeah, it helps you figure out if Mama Bear will handle it or if it's super complicated whether you need an attorney. Everyone needs a will that's an adult, period. 78 % of Americans die without a will. You know what's odd about that statistic? 100 % of us will die? 78 % of Americans live paycheck to paycheck. Oh, interesting. You think it's the same crowd? You think. People that don't pay attention don't pay attention. Who would have thought? So if you're going to just be mediocre with your money and not be proactive, then it shows up in a lot of different areas.

1:25:38George Kamel:Man, when I'm gone, I want people to think, I didn't like the guy, but he handled his business. He had a will. He had term life. He had it all going on. He's a bit controlling, but he was good at it. He was a super nerd. That's how you say I love you to your family.

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1:27:21Dave Ramsey:Welcome back to the Ramsey Show in the Fairwinds Credit Union Studio. George Camel Ramsey personality is my co-host today. Mary is in Las Vegas. Not working. Hold on. Let me try that again. All right. I'm going to try one more time. and then you guys are going to do something else. Uh-oh.

1:27:41George Kamel:All right, let's see if we can get Mary. There she is.

1:27:43Dave Ramsey:Mary, are you there?

1:27:44George Kamel:Hi. Yes, I am. Hello.

1:27:46Dave Ramsey:Good, good. I'm actually pushing the right button now. How can I help?

1:27:51George Kamel:Okay, thanks for taking my call, Dave and George. Okay, so my question is, well, I'm contributing to my Roth PSP, and ever since I listened to your show, I started becoming more intentional about that. But I do have about$26 ,000 in my traditional TSP of like those contributions. And I'm wondering, is it worth converting that$26 ,000 to the Roth TSP and then paying the taxes now? And then additionally, I get a 5 % match from the federal government, but that goes also into their traditional. So should I remember that at the end of every year or what should I do with this money in the traditional?

1:28:32George Kamel:Yeah.

1:28:33Dave Ramsey:Where are you in the baby steps?

1:28:36George Kamel:I am, well, I don't have debt. I have an emergency fund, and I'm investing 15%, and I don't have a mortgage. I don't have kids.

1:28:43Dave Ramsey:You don't have a house yet. You're renting? Correct. I rent. Okay, cool. What do you make? What do you make?

1:28:49George Kamel:I net, or I gross$100 ,500, and I net$97 ,500. Good for you.

1:28:55Dave Ramsey:Way to go. Awesome. You're doing so good. Congratulations. Oh, thank you. How old are you?

1:28:58George Kamel:I'm 36.

1:29:00Dave Ramsey:Well done. Very well done. Thank you. Okay. Okay, so yes, I would convert the$26 ,000, and yes, I would convert the match at the end of each year and pay the taxes. And you're going to have to do that out of additional savings, and that has the effect of putting actually more money than 15 % into your retirement, but not much. It's okay. So you're probably going to have$4 ,000 or$5 ,000 in taxes on the$26 ,000, and whatever the match is, you're going to have a little bit on that. But I'm the same way. I actually own Ramsey Solutions, so I match myself, and I'm required to match it in traditional, and so I roll it to Roth at the end of each year and pay the taxes.

1:29:41Dave Ramsey:Oh, wow. Okay. So, yes, I would go ahead and do that. Now, as I've said to do that, now I want you to recognize that that$4 ,000 or$5 ,000 or whatever it is in taxes on the$26 ,000 is going to reduce your down payment savings, your down payment amount that you have saved towards a house, or it's going to slow down by$5 ,000 or$6 ,000 of that. I still would do it because it's a small amount, and it gets your stuff all cleaned up, and it gets it all in the Roth column. Okay, cool. But I want you to recognize that's$5 ,000 that could have gone towards the house down payment fund.

1:30:20George Kamel:Sure, yeah. That's the tradeoff. Yeah, I understand. Yeah, and so if you had a mortgage, I would really tell you to put it towards the mortgage instead.

1:30:32Dave Ramsey:But because it's a small amount, I'd be tempted to do it anyway. So if you were like working four, five, six, seven at the same time here, instead you're just doing four, don't have kids, don't have a mortgage. So that makes it a little easier to do it in your case. And the last thing is, what is your TSP invested in?

1:30:51George Kamel:um so i have it in the c s and i funds you have been listening to ramsey i yes yes a lot very good i'm very impressed you passed the test with flying colors very cool very cool absolutely

1:31:05Dave Ramsey:so that's the thrift savings plan ladies and gentlemen the federal employee has or the military has and it's their version of a 401k some branches actually also have a 401k And they have three or four different things you can put the money in. The F is a fixed, which sucks. The rate of return is horrible. The G is government bonds, horrible rate of return. The C is very close to an S &P 500 index fund. It's common stock is what it stands for. The S stands for small company, so that's like an aggressive growth stock mutual fund. The I stands for international. Those two have not kept up with the C.

1:31:46Dave Ramsey:And so we have told people to put 80 or 90 percent into the C and split the difference left over between the S and the I, which is exactly what she does. They also have a really lame-o plan that you can put the money in, and it automatically moves around depending on your age, your risk tolerance, and those kinds of things. Which means it's going to be way too conservative. And it really sucks.

1:32:09George Kamel:And give you terrible returns. It really sucks. But I'm looking at the 12-month returns here just for the CS &I fund, and they blow away G &F, of course. Yeah. So what are they? 16 % over the last 12 months for the C fund, 14 % to 15 % for the S fund, and 35 % for that I fund. Whoa. Because as we've seen, the volatility with the U.S. market.

1:32:27Dave Ramsey:The international markets are doing well.

1:32:28George Kamel:International has boosted up with all the U.S.

1:32:30Dave Ramsey:volatility. And the G is 4 % and the F is 6%, right? So just like I told you, they suck. You don't want your investing at 4 % when inflation rate's 4%. You're just treading water. And if you've got it in traditional, you've got to pay taxes on it. So you've lost money after inflation when your long-term investments are making four, five, or six. You're not even treading water. So you've got to be doing better than six on your long-term stuff to beat inflation and taxes.

1:32:57George Kamel:But the general parameter is don't do any conversions until you're in baby step seven because that money is better off used to knock down the mortgage versus paid taxes.

1:33:05Dave Ramsey:If she had$260 ,000 in traditional, I'd tell her to just wait. Yeah. And do it in chunks later on. Save up and buy your house. Get your house paid off. And when your house is paid off, like you said, at baby step seven, then I would work on converting that 260.

1:33:20George Kamel:But normally, if you're investing in the traditional side, we tell you, hey, just pause that. And for the new contributions, go on the Roth side.

1:33:26Dave Ramsey:And that's what she's doing. Mary has been listening, George. I'm so impressed. She's doing the Ramsey plan. I mean, dialed in.

1:33:33George Kamel:If she ever wants a non-government job, apply here, Mary. We could use you. We're no government, but we get the job done. We do not have a TSP. By the way, if you've got a TSP, it's not horrible to do 100 % C and forget it.

1:33:47Dave Ramsey:That's like investing in an S &P and forgetting it. For those of you that are bogleheads that like passive investing in the S &P index and all that crap, the equivalent would be just buy C inside the TSP. And it's going to give you a great rate of return.

1:34:00George Kamel:You're missing out on the small cap and mid cap. Yeah, which is like 16. And the other one, the C was what? C was 16. S was the 14, 15. Oh, the I was 30. They're fairly close. Yeah, that iPhone, that's the last 12 months, so it's not a great picture.

1:34:13Dave Ramsey:I don't know, but it's spiked up. But yeah. But honestly, the C has outperformed everything else long term. If you look at like a 10, 20, 30-year return, you would see that. Yeah. And so you're in good shape. She's done everything so smart. By the book. A lot of smart people on today's show. I'm very inspired. Yeah, so nice. Hold on. The kids are going to be all right, Dave. So, George, recap. Match beats Roth beats traditional.

1:34:39George Kamel:Yes, that's the investing strategy that we recommend because the match from your employer is going to give you an instant return on your money. 100%. We have a match here at Ramsey. I put$100 in. Dave's giving me another$100. That's incredible. So we start there. I got to chill. Thanks, Dave. Appreciate that. Then we go to Roth, which means you're using after-tax dollars. You're not going to get the deduction, but that money now is going to grow tax-free, and the government's not going to get their grubby hands on it ever again. That's incredible. And then we move to traditional. if we've run out of Roth options in that 15 % threshold, we can go back to traditional.

1:35:12Dave Ramsey:If your company offers a 401k Roth and you have personal Roths and you do backdoor Roths, if you've got higher income, the only way you would run out of Roth and have to go to some kind of traditional is if your company didn't offer Roth. Yep. That'd be the only thing, the only way -

1:35:26George Kamel:And there's even, like we have a mega backdoor 401k.

1:35:30Dave Ramsey:Yeah. And you can do all of that Roth. Which allows you to do even more. You can do it all Roth. Pretty incredible. If the company offers Roth. So you got all kinds of ways you can do this stuff.

1:35:47Thank you.

1:36:10George Kamel:Hey guys, Rachel Cruz here, and I love summer. There is more fun on the calendar, more time with your people, and way more chances to make memories. But you know what else there's more of? Spending. Oh, between the extra groceries and gas and camp fees and family trips, it all starts to add up so fast. And before you know it, money stress starts to steal the fun out of everything. And that is why I love the EveryDollar Budget app, because it helps you plan your money, track your spending, and find more margin in your budget so that you can put extra cash towards the goals that matter most. Enjoy your summer without the money stress.

1:36:50George Kamel:Download the EveryDollar app in the App Store or Google Play and start for free today.

1:37:13Dave Ramsey:Well, if you feel like a rat in the wheel and you're sick and tired of run, run, run, run, run, get nowhere, the only way you get out of something like that is you have to plan your way out. You get above the problem and lay out a game plan. In the money world, that's called a budget. A budget is you telling your money what to do instead of wondering where it went. when you're spinning your wheels it's not because you're doing it on purpose it's because you're not doing it on purpose pretty simple and if you want to follow the ramsey plan the details the baby steps the right things like mary calling a little while ago and she had everything nailed down exactly we can show you exactly what to do when and where by following the every dollar budget app it will lead you not only through building a budget that's the basics but also It will help you find thousands of dollars in hidden margin and then what to do with it to find the fastest path from where you are to out of debt, to into wealth.

1:38:07Dave Ramsey:So every dollar is free. You can start it for free in the App Store or Google Play. Don't be normal. Normal sucks. Sam is in New York. Hi, Sam. How are you?

1:38:20George Kamel:Hello. I'm doing well. How are you?

1:38:22Dave Ramsey:Better than I deserve. What's up?

1:38:24George Kamel:so i was wondering so i guess i'll start with i'm 26 um i have two roommates right now and i've been living with roommates for the past three years now um i'm hoping to get my next place by myself without any roommates but the cost of that is significantly more than to continue living with people sure and so i guess my question is how do i know how much i should be saving because i've been watching so many of your videos about, and especially George's out on the street, if you start investing now, how much you'll have when you retire. So I guess how much can I, how much should I feel comfortable to spend now versus throwing even more into saving and investing and retirement?

1:39:14Dave Ramsey:Good for you. Good question. Well, keep in mind that George, when he's on the street, generally is making fun of people.

1:39:21George Kamel:I do the Jim Halpert look to the camera like you guys seeing this I actually just did one on the cost of living in New York while we were over there I said what's your rent payment for New York you know residents and so that was really interesting to find out how much people are paying how much are you paying in rent currently between you know you're one of three roommates I am so right now I'm paying$1 ,300 a month Woo! So$3 ,900 is the rent? Is it split evenly? It's$3 ,800. I could have a slightly larger room for an extra$100. She has an extra four square feet, so she pays a little bit more.

1:39:53George Kamel:So you want to have your own place. That's the goal. What would that cost? A reasonable place, not a swanky penthouse, but what's the place you're looking at? I think reasonably the least I could get something for is around$2 ,600,$2 ,700. Okay. Something like that. It's about double. What's your after-tax monthly income?

1:40:17George Kamel:I take a lot out right off the top between ESPP and do Roth 401k. So without the investing, if you just said, hey, here's the state and federal taxes, here's what I'm really making. Sure. I would say probably I'm taking home about$120 ,000 a year. Okay, so let's call it$10 ,000 a month. So it's about 27%.

1:40:41Dave Ramsey:Yeah. So a rule of thumb we use is when you're buying a home, don't let your payment be more than a fourth of your take-home pay, not counting 401k and ESPP, okay? So that's about where you would be with this rental number, and that shouldn't choke you to death. but keep in mind when you're renting 100 % of the time it's patience while you wait to buy and so it we're buying we're buying patience we're not buying a house buying somebody else's house for them but we're not buying a house and so you're buying time you're buying patience you don't want that to be your long-term goal with that in mind I'm trying to save towards a purchase someday.

1:41:23Dave Ramsey:How old are you?

1:41:25George Kamel:I am 26.

1:41:27Dave Ramsey:You don't want to be 36 and still sitting there paying rent.

1:41:30George Kamel:I definitely don't want to. And my partner, I've been with him for almost six years now. So I'm hoping that I get to be a part of a dual income rather soon. And so we can combine.

1:41:45Dave Ramsey:But I don't really want to work on how aggressive he is. Six years?

1:41:51George Kamel:Yeah.

1:41:52Dave Ramsey:Yeah, painter, get off the ladder, dude. What are you guys waiting for?

1:41:58George Kamel:I could not tell you. I'm not waiting on anything. Oh, boy. Okay, that's a discussion for another day. But to Dave's point, what you're dealing with here is opportunity costs. What you're giving up by getting your own place is about$16 ,800 a year. That you could have been saving towards.

1:42:16Dave Ramsey:To a down payment. Yeah, yeah.

1:42:17George Kamel:So if you're okay with that and slowing that goal down because you want your own place, that's fine. As far as the parameter goes, you're pretty much right there.

1:42:26Dave Ramsey:If your life goal, the way you see your life unfolding to getting a home is to having a dual income, and that's not an unreasonable goal, we should put a timeline on that. Yeah. In other words, he needs to put a ring on it.

1:42:44George Kamel:I would love that.

1:42:45Dave Ramsey:Yeah. Yeah, and that's old grandpa talking, okay? But, you know, if you find one like Sam, don't let her get away. Hello. And so because it sounds like this, okay? If I think this is five years and for quality of life I'm willing to give up$16 ,000 or$18 ,000 a year to live by myself, and that's all you're buying because you're not buying a house and you're taking that out of your down payment fund. But if we're doing that for two years and then we're going to be married, that's one thing. Or we're going to put$40 ,000 or$25 ,000 away,$30 ,000 away, and stay with the roommates so that when we do get married, we've got more money to put down.

1:43:39Dave Ramsey:and buy a house faster. So if I knew, if I was in your shoes, okay, I'm not telling you what to do exactly, but if I were in your shoes and I knew I was going to be married within 18 months to two years, which is very reasonable if you've been together six years, but if I knew that was going to happen, then I would stay with the roommates because I'd be planning towards my married self rather than my today self. But if I don't know, and I may have to kick Bubba off the ladder because he's not going to come to the table. We don't know what's going to happen there. If I don't know and I want to have this quality of life, I might go over and do the thing for$2 ,700 and kick the can down the road a little bit on buying.

1:44:19George Kamel:I guess the other question similar to that is I've got it between – I wouldn't touch anything in retirement, but just in brokerage and other things, I've got – I think my net worth right now is around$370 ,000. Way to go. and save things because I can't count on them, but at least right now. But would it be worth it to even consider just buying a place for$200 and depleting some of what I have invested? You're saying you could buy an apartment or condo for$200? No, it would be$200 down. Maybe not in New York, maybe somewhere outside.

1:44:57Dave Ramsey:Not going to be in New York for$200. Yeah. Not in Manhattan.

1:45:01George Kamel:But again, if you can do that with the parameters and go, all right, it's going to be about a quarter of my after-tax monthly income after the down payment, you could consider it. But I would still wait to see what the future holds.

1:45:11Dave Ramsey:And I'm only – no, I'm not going to wait. I'm going to present this in a conversation. Hey, if you're not going to come to the table, I'm going to go buy a house. Yeah. Because I'm going to make a plan for my life to be whole without you because it appears you're not going to be around. You're either here or you're not, and this sort of thing ain't working. I mean, you're not going to be as blunt or crazy as I am because I'm already married. But you see what I'm saying? It's like if you're going to come to the table, we'll wait and buy a house together. But if you're not, I think I'm going to go buy a house because I'm going to start planning my life and make it whole as if you're not here because I don't know if you're going to be here or not.

1:45:51Dave Ramsey:And you can phrase that however you want to phrase it. But that's really – I would tell him what's up instead of going, hey, I'm going to go buy a house for us. No, no, no, no, no, no. No us here, buddy. Yeah, I don't need to be like, well, I'm going to move in. That sounds fun. Me. Yeah. No, me. Buying a house for me. That's what we're doing. You have done so well, Sam. And let me tell you, the better you have your financial foundation laid like this, the more confident you are making relationship decisions that are good long-term decisions. You don't feel trapped. That's a really good, smart place to be, young lady.

1:46:25Dave Ramsey:I'm proud of you.

1:46:32Thank you.

1:47:01George Kamel:Hey guys, George Camel here. Do you ever feel like insurance companies only care about your money and not what you actually need? Well, there's a better way. When you go to Ramsey's Insurance Resource Hub, you'll start feeling confident that you're getting the right coverage that's truly best for you. You'll find helpful info on everything from life insurance, health insurance, identity theft protection, and more. And when you're ready to get the coverage you need, you can connect with a Ramsey-trusted insurance pro who will only get you what you need at the best price. Go to ramsysolutions.com slash insurance, ramsysolutions.com slash insurance.

1:47:43Dave Ramsey:Never been a better time than right now to find a job doing what you love. At Ramsey, we're on a mission to provide hope to everyone in every walk of life. and we need more talented team members to join the mission we are growing. Especially for roles in paid media marketing, email marketing, analytics engineers, and you can come do work that actually matters at Ramsey. Check out RamseySolutions.com slash careers and click the link in the show notes. Benjamin and Laura are with us on the debt-free stage in the lobby of Ramsey Solutions. Hey guys, how are you? Hey, Greg. Welcome. Where do y 'all live?

1:48:22Dave Ramsey:Baltimore, Maryland. Fun, fun. Well, welcome to Nashville. And how much debt have you two paid off? $282 ,000. Way to go. And how long did that take? About seven years. All right. And your range of income during that time?

1:48:38George Kamel:151 to 210.

1:48:40Dave Ramsey:Good. What do you guys do for a living?

1:48:42George Kamel:So I'm an application systems analyst technical lead for an investment advisory firm.

1:48:46Dave Ramsey:Okay. And I work for a ministry that helps people living through addiction. Oh, good for you. Wow, good jobs. Well done. Very cool. All right. And your shirt says mortgage-free, so I'm guessing you paid off house and everything. House and everything. Way to go! Looking at weird people. And you guys aren't that old. How old are y 'all? I'm 39. And I'm 47. Excellent. And what's this house worth? $480. $480. Way to go. And how much in your nest egg in your retirement and so forth?

1:49:19George Kamel:So in IRA and 401ks, we have$430. In addition to that, we have another$230 in the emergency fund, sinking funds, HSA, $529, company stock. And now that the house is paid off, ETFs in a brokerage account. Wow.

1:49:35Dave Ramsey:So you're running what? Million and a half net worth? 1.1. 1.1. Okay. All right. Well, very good. Way to go. Baby steps millionaires. Yep. Look at you. in seven years that's amazing well done i'm so proud of y 'all congratulations how's it feel to not even have a freaking house payment awesome free free yeah that's exactly how it feels was the whole thing the mortgage no what else was in there i came into our marriage with uh 12 000 in IRS debt. I had$1 ,000 in debt to Maryland and a$1 ,000 dental bill that was around so long it was like a pet. Wow. And then you met Laura, who analyzes everything very carefully, I can already tell, and she said, we're not doing this.

1:50:23Dave Ramsey:Am I right? Yeah. So. Absolutely.

1:50:27George Kamel:So you guys have been married seven years? Yep. Yes. This is tracking now. So you get back from the honeymoon and she says, all right, down to business. Oh, no. Before there was a honeymoon,

1:50:37Dave Ramsey:She already said it was down to business.

1:50:38George Kamel:There's the prerequisites. We paid off the IRS and the dental and the Maryland State the day we got back from the honeymoon. Yes. And that set us back to baby step three for a couple weeks. And then we had to very quickly adjust because Jacob.

1:50:56Dave Ramsey:Because our older son, my son Jacob, he went to college right after we got married. And we were cash flowing a lot of his college. Wow. So you did that in addition to all this? Yep. Wow. Well, way to go, guys. Well, very cool, though. Very good. I mean, all the goals are hit, and you knocked it out, and then you start on the mortgage. Yep. That's it. And seven years later, you're millionaires. Yep. Wow. So when you're in your 30s, and you had IRS debt, or you're in your mid-30s, and you had your IRS debt and all that, do you ever think you'd be a millionaire by now? I never thought of it, no. I didn't think that it was possible at that point in time.

1:51:39Dave Ramsey:And one of the big things that held me back was debt. And we learned a lot through Financial Peace University. I just got real gazelle intense about it.

1:51:54George Kamel:So originally, I took FPU in the fall of 2013. Somebody at my church paid for 11 scholarships. And I have no idea who paid for it. and completely changed my life because Liam at that point was only six years old and I was a single mom making 55 and I paid off 75 ,000 in three years. And then three months later, I met Benjamin and I told him that I was three months into an 18 month plan where I was going to save up$60 ,000 and buy a house an hour away. And yeah, that didn't scare him.

1:52:25Dave Ramsey:No, it impressed him. I said, you can't stop a train once it's on the tracks. That's it. I heard the locomotive going.

1:52:33George Kamel:Yeah, here we go. Yep. And so five months after we met, he asked me out and I had a 48 item RFP and he met almost all of the requirements in my RFP, except number 12 was he needed to be a date. Wait a minute.

1:52:46Dave Ramsey:I know what it is, but tell the public what you gave your date.

1:52:50George Kamel:A request for partner. Oh, okay. All right. And there was 40 items he had to check. Yes. And he checked every single one except for one? Except for two. So one, when he asked me out, he said, I know we have to make compromises because you prefer the mountains and I prefer the beach. And I said, where are we going to live? Are we going to live at the Strait of Gibraltar? I don't want to live at the Strait of Gibraltar. What about Ireland? Ireland, it rains too much in Ireland. I don't want to live in Ireland. And he said, I was thinking that we would live in the mountains and we would have a mural of the beach and so the second item that he didn't check off yet was dave ramsey follower on same pace financial financially so i agreed to go out with him under the condition that he complete fpu before he proposed wow that is wild for one date and this didn't scare you at all for those of us in

1:53:45Dave Ramsey:the business world is a request for proposal in this case it's request for partnership yes oh my My gosh. Wow. That's impressive.

1:53:55George Kamel:I'm just surprised he checked off 46 of them the first day.

1:53:58Dave Ramsey:I mean, you picked well. I mean, the chances of that happening alone are pretty low. This is amazing.

1:54:03George Kamel:Wow.

1:54:04Dave Ramsey:Very cool. The cool thing, though, Benjamin, too, like you said, you got gazelle intense, and it wasn't just because of that, because of her demands. I'm guessing what you do for a living, you observe people who change behaviors permanently, and they usually do so fairly radically. It has to be radical for it to even be effective. Yes, for it to stick. Yes. It's all or nothing. And so you applied that. I'm guessing whether you consciously or unconsciously applied that knowledge to this subject. Absolutely. Yeah. Absolutely. It was learning how the debt percentages work against you when you owe money and work for you when you invest the money.

1:54:50Dave Ramsey:it made a night and day difference in how to see that yeah and so then it wasn't like oh i'm having to do this to get this girl it's more like this works and i'm freaking doing it all in yeah she's just incredible whether it's uh either way yeah either way yeah i got you well done y 'all that's very cool very cool what was the church you went to financial peace in lighthouse and glen bernie okay very nice very nice well thank you guys so much we're so proud of you what do you tell people you've both been through financial peace, you've been married seven years, and you went from in debt and to paying off mortgage and everything, and now a net worth of over a million dollars in seven years.

1:55:28Dave Ramsey:What do you tell people the secret is?

1:55:29George Kamel:So I tell them three things. One is the budget is foundational. If you don't get the budget, nothing else is going to work. Two, marriage is a partnership, not a roommate agreement. Make sure you're on the same page financially. And three, we started coordinating FPU in the fall of 2021. And I would tell my class to set three types of goals. You set realistic goals, ridiculous goals, and mathematically impossible goals. And you tell people what your mathematically impossible goals. So I was telling my class that my mathematically impossible goal was I was going to pay off my house before I turned 40 and I have achieved every one of my mathematically impossible goals when it was just me I would barely make it we actually did it eight months early that's amazing well yeah you need we call

1:56:19Dave Ramsey:them God wow goals if God shows up we can do this but otherwise we can't do it by ourselves the math says we can't mathematically impossible goals and uh then that's how that's great and that your classes, man. Can you imagine being in her class?

1:56:33George Kamel:I feel like everyone should go through her class.

1:56:35Dave Ramsey:We need to put this at scale. Yeah, this is great. Financial peace coordinators, when they're like this, the people that go through their class, their lives are all changed. They don't have a choice. They don't have a choice. You can't be in the class. You've got to do an RFP. Let's get to it. So you guys are amazing. And you brought Liam with you. Does he want to come up for the Debt Free Scream?

1:56:53George Kamel:Yep.

1:56:54Dave Ramsey:How old is Liam?

1:56:55George Kamel:He's 19. He's been following this journey since he was 6.

1:56:59Dave Ramsey:I love it. Count it down. Let's hear a debt-free scream. Three, two, one.

1:57:06George Kamel:We're debt-free! Yeah!

1:57:12Dave Ramsey:House and everything, baby! Woo-hoo!

1:57:29you

1:57:36Dave Ramsey:Hey guys, Dave Ramsey here. Every day on this show we help people work through real money problems and figure out what to do next. Now you can get that same kind of help anytime with Ask Ramsey. Ask your money question and get answers built on Ramsey principles we use on the show. Whether you're making a decision or just want something explained, Ask Ramsey is here to help. It's fast, simple, and free to use. Go to RamseySolutions.com and try Ask Ramsey today. That's RamseySolutions.com.

1:58:20Dave Ramsey:Our scripture of the day, 1 Peter 1-6, So be truly glad. There is wonderful joy ahead, even though you have to endure many trials for a little while. Winston Churchill said the pessimist sees difficulty in every opportunity. The optimist sees opportunity in every difficulty. Brayden is with us. Brayden's in Atlanta. Hi, Brayden. How are you? Good. How are you? Thank you for calling. Thank you for taking the call. Sure. What's up?

1:58:48George Kamel:I have a question. Me and my fiance are looking to get married and move out. and our options right now are either move out into an apartment or my parents gave me the option of paying to finish the basement and then living down there for a couple years while we saved up to put a down payment on a house. I just want to know what the smart move would be there. I currently have an income. She does not and we are both in college still.

1:59:21Dave Ramsey:When will you both graduate? it?

1:59:24George Kamel:Next year.

1:59:26Dave Ramsey:Like May of 27? Should be, yes, sir. Okay. And what will her degree be in? She will work in physical therapy. Okay. Is she finishing her master's in PT or undergrad?

1:59:40George Kamel:It will be more like a associate's degree to work in physical therapy assistant. Oh, okay.

1:59:49Dave Ramsey:So she's not gonna be a PT. All right. That's okay. And what will your degree be in?

1:59:56George Kamel:I will be graduating with an accounting degree.

1:59:59Dave Ramsey:Okay. All right. And sitting for and passing the CPA, I assume. Your master's in accounting? All right. No, I will be going a different route.

2:00:09George Kamel:I will be going into like corporate finance route.

2:00:13Dave Ramsey:Okay. All right. Cool. No problem. Good. Good. Good. All right. And when are you getting married? September of 27. After graduation? Yes, sir. About a year from now. Okay.

2:00:28George Kamel:Yes, sir. We want to graduate and move in together at the same time.

2:00:32Dave Ramsey:Good. Good. So it doesn't matter until then?

2:00:36George Kamel:Yes, sir. Okay. All right.

2:00:40Dave Ramsey:Do you have student loan debt or other debts?

2:00:43George Kamel:I do not. She does. It's about$10 ,000.

2:00:47Dave Ramsey:Okay. All right. So you probably can save up enough to pay off the student loan debt when you come home from the honeymoon in September of 27, correct?

2:00:57George Kamel:I plan on having that paid off by the end of this year.

2:01:01Dave Ramsey:Well, don't pay off her debt until you're married to her. Okay. That's not a smart idea? No, it's not a smart idea. Okay. You don't pay people's debt that you're not married to. But I would have the money saved up to do that on return from the honeymoon, write a check and pay it off. Yes, I would do that. I'd be ready to do it. Okay, yes, sir. And she's not taking out any more student loan debt, right?

2:01:24George Kamel:No, sir.

2:01:24Dave Ramsey:Okay.

2:01:25George Kamel:It will stay at about$10 ,000.

2:01:27Dave Ramsey:Okay.

2:01:31Dave Ramsey:Okay, the way we answer questions on this show and the way I've talked to George and all the others to do the same thing is, what would I do if I were in your shoes? Okay? Okay. Your parents' offer is a kind offer, but there is a huge advantage to a young couple to be separated and have their own entity, their own physical entity, in terms of the first year of marriage relationally plugging in with each other, not having the in-laws above your head. Yes, I agree. The relational advantage of that is very, very real. And it actually, the weird thing is it'll actually parlay over into your finances.

2:02:18Dave Ramsey:In other words, the more adult the two of you are because you're a separate entity and not plugged still into mommy and daddy in any way, the better your first few raises are going to be, your first few job decisions are going to be, and all that kind of thing. It all kind of goes with the same territory. And there's, you know, we've seen those data points for years doing what we do. So for the sake of your marriage and even indirectly the byproduct of your finances, I would just rent the cheapest one bedroom I could. Okay.

2:02:54George Kamel:I guess to add to that is if we lived with them or other costs like utilities and groceries, I most likely wouldn't have to pay car insurance. So there would be quite a few other costs that would not be there if we did live with them.

2:03:12Dave Ramsey:I think it's a net positive still.

2:03:15George Kamel:But you guys will be grown adults probably making$150K household income starting out with no debt. So you're going to be able to afford rent and save up for a down payment with no issue.

2:03:25Dave Ramsey:So when my daughters were four to seven years old, they had in the playroom two pretend dresses that they wore all the time. One of them was a wedding dress and one of them was a princess dress. When your fiance was wearing her pretend wedding dress at seven years old, she was not visualizing living in your mother's basement.

2:03:51George Kamel:That makes sense. And walking upstairs to breakfast to see your mother-in-law. As much as you might love each other, you'll love each other more if you live in different spaces.

2:04:03Dave Ramsey:Again, it's a kind offer, but the unintended consequences offset the advantages as far as I'm concerned. And I wouldn't do it. And so I have to tell you what I would do. George, are you?

2:04:16George Kamel:I'm in the same boat. I mean, I moved out when I was 20.

2:04:19Dave Ramsey:Yeah.

2:04:19George Kamel:And so I wasn't like a living at home kind of guy. And there's times where we'd say, okay, it makes sense to live at home for this season until this thing. But I don't like the idea of just, well, it's cheaper and we can save money to save up the down payment. You guys are going to be in great shape starting off. Six-figure household income.

2:04:35Dave Ramsey:For those of you out there that are in these situations, this would not be hard relationally at all for Brayden because he just steps right back into the family script that he's been in his whole life. it's going to be 10x harder for the one that's not that it's not their parents not because the parents are mean or not because they're not loving or anything like that it's just awkward as crud you know it's just weird and so i mean even like when we first got married and we went back uh to sharon's parents for christmas and we stayed in her old bedroom that's just weird it's just strange You know, that's just, this is the bed you were in in high school.

2:05:16Dave Ramsey:It's like, ugh. You know, and I can do that for about three nights. And after that, I'm going home. Yeah. You know, and so.

2:05:23George Kamel:And I resort to like my childhood self. When mom starts folding my laundry, she's bringing me meals. And I go, it's hard to feel like a girl adult. And when your mom brings a meal, it's a good thing.

2:05:31Dave Ramsey:You can't pass that down. I'm talking to baklava is unbelievable. May Camel's cooking. You better be ready. You better be saddling up. Jordan is in Albany. Hey, Jordan, what's up? hi dave how are you better than i deserve how can i help good thank you so much for taking my call

2:05:48George Kamel:so um i bought a car about a month ago um and i am wondering if i should sell it because i'm having a bunch of regret um about it it's a newer car and i just think it's gonna you think it's gonna be more of a curse than a blessing yes because how much did you pay for it uh 25 000 and what are your payments about 365 a month okay what's owed on the loan 25 000 oh no you paid 25 what's what's the loan amount no so i put down 2500 and then it was 25 000

2:06:28Dave Ramsey:in total does that make sense yeah so 22 500 is what's owed today yes okay and what is your household income?

2:06:37George Kamel:So I'm single. I live with my parents. So I bring in about$2 ,600 a month. I just picked up some tutoring, and I've been doing that this summer. So that's upped my income about$1 ,000, so$3 ,600. And I'm planning on doing that throughout this school year as well. Good for you.

2:06:58Dave Ramsey:It is too expensive a car for your situation. We tell folks not to buy a car that's more than half their annual income, and you did.

2:07:07George Kamel:Yeah.

2:07:08Dave Ramsey:And I would sell it.

2:07:10George Kamel:Yeah.

2:07:10Dave Ramsey:It's going to, you know, I would buy something about$12 ,000 in your situation.

2:07:15George Kamel:Okay. Okay, yeah. I also, I have a bunch of student loan debt, and I thank you for all your advice and stuff. I've been putting a lot of money towards those as well. Way to go. But it's a hefty amount.

2:07:29Dave Ramsey:Yeah, and now you've just added another chunk to it. You know, you put another$22 ,000 on top of that before you get out of debt. So now I even take back my$12 ,000. I would go cheaper than that. I'd buy something super cheap, get to work, clean up the student loan debt, and then and only then move up in car.

2:07:45George Kamel:One day you'll have a$22 ,000 car.

2:07:47Dave Ramsey:But not today. I wouldn't. I'm with you, Jordan. I think your brain is telling you the right thing. That puts us out of the Ramsey Show and the books. We'll be back with you before you know it. In the meantime, remember, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus.