Life Gets Easier When You Don't Owe Anyone

11:08Dave Ramsey:Okay. That's not too bad. I was afraid you were going to tell me$18 ,000.

11:13George Kamel:No, no, no.

11:15Dave Ramsey:You only have one car? Yes. And what's the car worth? I think it's worth$24 ,000. And you owe$15 ,000 on it? Mm-hmm. Hmm. And your household income is$40 ,000?

11:37George Kamel:Yes.

11:39Dave Ramsey:Hmm. Well, what I would do is sell it and buy a$9 ,000 car and not have any payments. Hmm.

11:51George Kamel:Okay.

11:52Dave Ramsey:And then I would, with no payments, how much are your payments?

11:57George Kamel:They're for$70 a month.

11:59Dave Ramsey:Okay. And then for the next 10 months, I would pay myself a payment, 11 months, and I'd have$5 ,000, and I'd go buy another car so that we had two paid-for cars, a$9 ,000 car and a$5 ,000 car and no payments.

12:17George Kamel:That's actually a good idea. Do you see how that just broke the cycle of payments in your life? Yes. Pretty incredible.

12:25Dave Ramsey:Now, here's the thing. You don't have to panic because you're not about to get repoed. You don't have to give the car away. I want you to get$24 ,000 for it. I don't want you to sell it for$19 ,000. Okay. Because you need that$9 ,000 so that you get a good car as your main car. and then while you're driving that good$9 ,000 car, then you save up and get a$5 ,000 car. And here's the fun thing. It's not necessarily how life works, but from a math riddle perspective, if you just want to say like those old, remember, they may not have had them when you were in school. When I was in school, we had math word problems and we had to solve the problem.

13:04Dave Ramsey:They told a little story and you had to solve the math problem inside it. And so make it kind of into a math word problem and say, all right, if we had a$5 ,000 car 10 months from now that was paid for and a$9 ,000 car 10 months that was paid for, 10 more months from now, we could sell the$5 ,000 car for$5 ,000 and put$5 ,000 cash with it and have a$10 ,000 car. And 10 months later, we could move the$9 ,000 up to a, or 14 months later, we could move the$9 ,000 up to a$15 ,000. and we could have a$10 ,000 and you know if you map that out and kind of play it out that's about 36 months I just outlined there and three years from today you could be driving a paid for$15 ,000 car and a paid for$10 ,000 car if you just keep paying yourself one car payment of 500 bucks a month which you're already paying somebody else that car payment but you're going to be on a budget to do that because once you don't have to pay the bank to avoid repo it's harder to save money than it is pay payments discipline wise i'm curious do you guys have any other debt

14:14George Kamel:we have um school loans uh my my husband has school loans carlos um how much we have about Well,

14:26George Kamel:I want to say it's$47 ,000. Is he the only income in the house right now? I do get a disability, but he works at the post office, yes. What was his degree in? He didn't end up graduating. What was he pursuing at the time? Video game development. hmm well the income is the other lever to pull here because these student loans they're going to be hanging around you can't get rid of these things you can get a degree in video game development apparently so yes he didn't but people can yes wow yeah like a four-year degree

15:16Dave Ramsey:four years yes okay someone's got to make them i am officially an out of touch boomer just put me in the category just put me in the boomer bucket i never thought i'd see the day i'm sure it's a newer degree but you can make good money doing it you'll have to i knew that but i always thought it was just somebody that kind of was self-taught techie yeah that like a

15:38George Kamel:developer who went oh i could figure out like somebody that played call of duty so much that

15:42Dave Ramsey:it became their duty or something. I don't know. I mean, I just thought it was kind of learned that way. I didn't think it was. I didn't know there was an actual four-year freaking degree. I wouldn't be surprised that a technology place maybe had a certificate or something in it, but I'm a little shocked that somebody's actually offering a four-year degree in video game development. It is a big industry. I guess it's logical. It's just, it shows how out of touch I am. That's what, how irrelevant I am. All right. Gideon's in Phoenix. Hi, Gideon. What's up?

16:15George Kamel:Oh, nothing too much.

16:15Dave Ramsey:How are you doing? Better than I deserve. How can we help?

16:19George Kamel:So I've got, I'm a college student. I've got an employer sponsored IRA, 401k, excuse me. I'd like to start a personal IRA because I won't be at this job forever and I'll need to roll the 401k into my IRA. How would you recommend I go about doing that?

16:36Dave Ramsey:well your rollover ira will be different than the ira that you add to there'll be two different account numbers rollover account numbers don't technically combine with individual iras that are opened does that make sense and so uh but i if you are interested in doing some investing and you want to learn about that you could get in touch with one of the smart investor pros that we recommend it's really not that big a deal it's not that hard i mean have you ever opened a bank account? It's been a while, but I think so. Okay. How old are you? 19. Okay. Well, it's about as much paperwork plus a little bit of opening a bank account.

17:18Dave Ramsey:Like if you go open a checking account or you go open a savings account, you have to fill out four or five pieces of paper and, you know, put your social down four or five times and that kind of thing. And it's like, you know, they, they, and then poof, you have an account and the same thing's true of opening an IRA. See, an IRA is not technically an investment. You're actually picking a mutual fund in this case, that was what we're recommending, to put the money in. And the IRA is the blanket, the individual retirement arrangement is what it stands for, the blanket that wraps around the mutual fund and keeps it warm from taxes.

17:48Dave Ramsey:The IRA itself is not an investment. It's how the investment is treated for taxes. And you want to make it a Roth so that it grows tax-free. What year of school are you in? I'm going into my, well, it's kind of weird.

18:03George Kamel:I did some dual enrollment, so I'm technically a sophomore, but because I did classes early, I'm also technically a junior.

18:09Dave Ramsey:Okay. And so what are you studying?

18:12George Kamel:I'm getting my Bachelor of Biblical Studies and Admission from Crown College of the Bible in Tennessee.

18:18Dave Ramsey:Mm-hmm. Mm-hmm. Good.

18:23Dave Ramsey:And how are you paying for all of this? I'm working through it.

18:29George Kamel:working through college. My parents are helping a little bit, but I'm working mostly. Good for you.

18:34Dave Ramsey:Good for you.

18:35George Kamel:Well done. Do you have a Roth option with your employer for that 401k? I don't believe so. It's just a 401k. I put in 3%. They match. That's all.

18:49Okay.

18:49Dave Ramsey:That's okay. Let me back up three steps and say, before you did a 401k and before you did an IRA, my first concern is that you graduate with a degree that is usable in the marketplace, that you can go get a job and make a living with that set of information, and that you pay cash for that degree. If you do that, that is a better investment than a mutual fund. Yes, sir. Knowledge is the tools in the tool belt. not the degrees but the knowledge in your tool belt is what makes you set you apart in the marketplace and you will be worth more than that mutual fund will be ever so i'm more concerned that you do that first before you do either one of these other things but if you're already doing that then um and it sounds like you're on a ministry track which is wonderful good and uh then yeah have a have a 401k and if you want to add to that in addition to an ira that's good

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21:26Dave Ramsey:You ever feel like a rat in a wheel with your money where you just run, run, run, run, run, don't seem to get anywhere? If you reach the point on that, that you're sick and tired of being sick and tired and you're ready to say, I've had it, then you start asking questions on this show. And you start going, okay, Ramsey, what do I do to get from here to there? What is the shortest distance between running like a rat in a wheel and actually having some money where I'm actually controlling my destiny, where I can retire with dignity and not have to eat Alpo at retirement? Because I counted on social insecurity.

22:02Dave Ramsey:hey, there's a plan, work your whole life and count on the government, which is well known for their ability to handle money, to take care of you. Well, that would be stupid. So once you kind of break through that stuff and you go, I don't think so, and you're ready, what's the shortest path? Well, we call it the baby steps. And we've helped millions, tens of millions of families become baby step millionaires by working through this process. And, of course, they do it with a plan, and the plan is a budget and it's called EveryDollar. The EveryDollar budgeting app will hold your hand and do a personalized coaching plan and help you find extra money to get out of debt, build wealth, and become a Baby Steps millionaire.

22:45Dave Ramsey:In 15 minutes, you're going to find your first few thousands of hidden margin, money that you're just pissing away, and you can actually start doing something with it. Actually be a grown-up and stuff. And we'll show you how to do it. You can download every dollar for free in the App Store or Google Play, and then you can call here. We'll help you, but you won't really need to because it'll tell you the same exact stuff George and I are going to tell you. Sophie's in Brooklyn. Hi, Sophie. What's up in your world?

23:15George Kamel:Hi, Dave. Hi, George. Firstly, I just wanted to say how much I appreciate the way that your show and Ramsey, while being faith-based and in values is still inclusive and useful and relevant for those who maybe share all the same beliefs and values. I think that's rare in media today and after listening to your show for the last four years, I feel like I'm much more able and open to respect and appreciate the opinions of those that don't share those. So thank you not only for what you've done for me financially, but also helping me become less of a dumb bigot.

23:57Dave Ramsey:Wow, that was cool. What a great phrase. You're awesome. How can we help you?

24:02George Kamel:So my question is around giving with intentionality and being generous with integrity. Currently, my giving, it consists of three charities that I've selected based on sort of my values and things that are important to me. And they're on automatic, you know, monthly debits. And it feels like I'm just picking a box each month versus being intentionally generous. You know, as mentioned, I'm not mentioned, but insinuated. I'm not part of a faith-based community, but I love what I hear on the show about tithing. You know, this idea of giving to a community with shared values where you are both involved in and can tangibly see how those funds are used.

24:47George Kamel:I'm currently on Baby Steps 4, 5, and 6 on track for 7. in the next six months, and want to make sure that as I'm approaching, you know, becoming outrageously generous, I want to make sure I'm doing it with integrity and intentionality.

25:02Dave Ramsey:So what is your question to someone like me? It's just an excellent question.

25:06George Kamel:Sorry. That's okay.

25:07Dave Ramsey:It's an excellent question. Thank you. Thank you. Very, very well thought out.

25:11George Kamel:Thank you. Okay.

25:12Dave Ramsey:So as you said, what we're going to suggest is you find something that aligns with your values and something that, and honestly, it's something that kind of makes your heart beat. Okay. This, this thing matters to me for whatever reason, either it's something in my history or something in my family's history, or I just care about it for some reason. And it makes my heart because, you know, the weird thing is, is that not everything that's valid is going to be yours to do those things. Some things that are valid, they're not yours to do. They're somebody else's because they care about them. So I want you to find something that does do that.

25:48Dave Ramsey:Um, And then what we have done at Ramsey in the family is it started out with we were looking at that. And then we wanted to get a touch more sophisticated and really look into how that particular charity was operated. Yeah. For instance, let's just say you were giving to something that was feeding hungry children. You were worried about food security. Okay. then you would want to know that a high percentage of the donation is actually going to feeding a child, not the bonus plan of the president of the charity. And so you can look at their books if they will disclose them. If they won't disclose them, we don't give to them.

26:38Okay.

26:39Dave Ramsey:If they're ashamed of where their money is going, then Ramsey don't give to them. So if they're transparent, then I can look and I go, hey, you know, 10, 15 percent of their income goes for administration and salaries and overhead to operate the thing. And the other 85 or 90 percent or 75 percent or whatever goes to the actual thing, the drilling of the well to create the clean water for that community or whatever it is you're doing. Right. I don't want that flip flop. I don't want 85 % going to salaries and 15 % going to the hungry kids. I don't want to give that$100. You follow me? Right. So I'm looking at the way that things operate, how well it's operated.

27:23Dave Ramsey:In our case, we don't give to ministries or charities that borrow money because that would be inconsistent with our family's belief. It would make us seriously hypocritical. Now, that wouldn't necessarily be true of you. You could decide if you want to do that or not. But I'm just saying that's one of the things we've decided. So then back to your original question, what we do is we set some things on autopilot like that where we're automatically giving just out of not necessarily because the thing is tickling us every month and tickling our heart and making a smile every month. But instead, we just want that rhythm of generosity to be there as a part of who we are as people, not as a part of the thing.

28:09Dave Ramsey:Then that's one bucket. The second bucket is we do look for some things that make us cry. That when we give to it, we read the letter from the person later and we cry. And I really want some of those. And then the third thing we do is that we allocate a small amount, and some of it is a small amount relative. It's not a small amount, but it's a small amount relative to the total budget of the foundation. My daughter runs the foundation, and she's authorized to just randomly bless something. And I carry a pocket full of hundreds, and I may just randomly bless something. If I'm standing at the gas pump and I'm looking at a lady and her kid's clothing is not great and the tires on her car are bald, she's probably a single mom, 52 % of which live below the poverty level.

29:00Dave Ramsey:And God might speak to me and say, buy that lady's gas and roll her car over there and put some tires on her car. And I got enough money in my pocket just to go do that one. And those are so fun. That's the most fun you'll ever have. Because that's really in your face.

29:13George Kamel:I remember listening to an episode where you shared that. And I also heard an episode where you said you were in Australia, I'm Australian, and you love the Australian people. And I said to myself, if I saw Dave in a restaurant, I would be buying him dinner to say thank you.

29:26Dave Ramsey:Oh, you're sweet.

29:27George Kamel:But I hate you on the random acts of kindness.

29:30Dave Ramsey:Yeah, but the random acts are actually the most fun because you're right there in the face of the thing. The second most fun are the ones where you hear back later and say, you know, we just did a huge fundraising event at our farm the other day for a sex trafficking interdiction organization, meaning they send the ex-military guys in and get the girls out of the situation and sometimes very forcefully. And it's basically really and truly saving somebody's life. And so we just did a fundraiser for that. And you meet some of those girls that were dragged out of that and saved. Oh, my gosh. You know, there's no ticking a box on that.

30:18Dave Ramsey:Your heart's changed forever. I have. You know, and so on. You can mention that with a whole bunch of different charities or ministries that are out there. So you probably want some different kinds of buckets. Some spontaneous, some intentional. To kind of keep your generosity pump moving.

30:33George Kamel:And get some ones you can get involved in. The closer you get to it, the more intentional it's going to feel. Yeah, exactly. So see if you can serve them. We have ministry time here. We actually can go do that for a week.

30:41Dave Ramsey:We're least likely to give to some big, invisible thing where we have no connectivity to them at all. I mean, we do give to some large ministries, but we end up with some connectivity in there somehow. I want our family somehow to get the psychological income from the generosity.

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32:42Dave Ramsey:speaking of fun things and she was a fun caller for sure love that uh dave on take a moment thank you and the team for the work you do i'm a hospice chaplain wow i spend my days walking with people through some of the most vulnerable moments of their lives. Your teaching has shaped not only my own financial journey, but I'm working my way through Baby Step 2, and it's also given me tools I've been able to share with the people I care for at end of life. One of my patients wanted financial freedom more than anything. She told me her goal was to die without owing anyone money. Together, we worked through the Baby Steps slowly and faithfully, and she made it all the way Baby Step 4 before she passed.

33:23Dave Ramsey:Because of her hard work, her kids will be able to sell her house and have a little something left over. The peace she felt knowing she was not leaving debt behind was profound. It was one of the most meaningful parts of her final months. She loved the EveryDollar app, by the way. It gave her a sense of control and dignity at a time when everything else was slipping away. Thank you for giving me the tools to be successful in my own life and for equipping me to help others find hope and freedom as well. Her story reminds me that it is possible and that the work that you guys do reaches further than you will ever see.

33:59Dave Ramsey:Wow, that is not one I've run into.

34:01George Kamel:That's special.

34:02Dave Ramsey:That's wild.

34:03George Kamel:That's an angel walking among us right there. For sure. That's the Lord's work. And what a cool story to have her go, this is the goal I want. This is the legacy I want to leave for my family is that of freedom.

34:15Dave Ramsey:Man. And she did it. Pretty amazing. Taylor is in Orlando, Florida. Hi, Taylor. How are you?

34:22George Kamel:Hey, doing great, guys. Thanks for taking the call. Yeah, so first of all, listening to all these other stories of all the stuff you guys are doing, it's super impactful. So it's really cool to just not know that it's not just me out here having all these questions, but really cool stuff, seriously. Thank you. But my question is whether or not saving 20 % for the down payment on the house is actually mission critical or if that's something that's – I'll kind of give you the background of we recently discovered the baby steps.

34:58Dave Ramsey:We had enough cash to just pay off all the debts right away. Wow. We decided to go get debt free. Good for you. That was hard. And yeah, well, it was a lot, but we've been blessed and we both have good jobs.

35:12George Kamel:My wife, or I guess fiancee technically, but soon to be wife is about to start a new job and start making about 60 grand more than we had previously. Wow. So we have a lot of income that is coming in. We just now, having recently paid off the debts, don't have as much cash saved up as we used to. And we are debating whether or not it makes sense. we've never owned a home, so whether to do an FHA loan because we have enough cash to cover the payments. I know you guys teach, too, like the 15-year, but if we're going to do stuff like that to afford it, we'd need to spend a lot more time saving up.

35:47George Kamel:I'm just trying to weigh on the benefits.

35:48Dave Ramsey:Well, no, you could purchase less house. Fair. Okay. That would work, too. That's a good point. But anyway, way to go. Congratulations. Thank you. The thing on the 20 % down, we don't slap our fist on the table on that. We just remind people that if you put 20 % down on a conventional loan, you avoid PMI, private mortgage insurance, which is about$75 per month per$100 ,000 borrowed. So it's a lot. Yeah. And it's basically foreclosure insurance, meaning that you're buying insurance, private mortgage insurance, PMI, is you're buying insurance for the mortgage company that pays them in the event they have to foreclose on you and lose money on the house.

36:35Dave Ramsey:Because you don't have a big down payment, they're worried that they're going to be upside down on the house at a foreclosure. And that's where that comes from. But no, we don't do that. We just say it's going to be more expensive if you don't. Most first-time homebuyers on the Ramsey plan don't put down 20%. Okay. Most of them put down 5 % or 10 % or something like that. And they do do a conventional loan on a 15-year fixed where the payment is no more than a fourth of their take-home pay. The FHA loan, you can get in for a little less out of pocket. That's the biggest difference in it. But it is more expensive.

37:12Dave Ramsey:The closing costs are higher. The gotcha fees at closing are higher. And the interest rates are a tick higher, just a little bit. Gotcha. So it's not a horrible deal, but it basically was designed for people to buy their first home or to buy a home if they don't have much money. And you pay a premium to get into that to save a little bit on the down payment stroke. But if you'll be patient and now that you don't have any debt payments, build up a good strong down payment, not 20%, but, you know, five or so and get you a good fixed rate 15-year conventional. that's going to be what we'll recommend because that's the best deal for you guys.

37:53George Kamel:Right.

37:53Dave Ramsey:And the 15-year, by the way, is cheaper. The interest rate is always lower on it than it is on the 30. And you'll save way more on interest over a 30.

38:02George Kamel:Yeah, that was kind of a – because I know you guys talk about the 15, and I've been following the math as I do research here. I was wondering if having the 15 but having the more expensive monthly or if you set up, like, additional payments beyond this, you know, if the 30-year has payment once a month, if you pay a little bit more than that.

38:22Dave Ramsey:Yeah, but as of this moment, as we're sitting here talking, the 30-year is three-quarters of a percent more than the 15. It's sitting at about four and a half, I'm sorry, about six and a half, and the other's at about five and three-quarter of 15-year is.

38:40George Kamel:Okay. So it's considerably cheaper.

38:42Dave Ramsey:It's almost 1%. I mean, so if you borrow like$300 ,000, that's$3 ,000 a year more you're paying so that you can wiggle around in your plan you just laid out. Right. And that's all you're doing. You're just trying to wiggle your way into it. Just be calm. Be a little bit more precise. Slow down and build the cash up. Build the cash up. And then it's your first house. You're not going to buy the freaking Taj Mahal. You don't need a McMansion. Yeah, I think that's the other thing. Move out of the city and out to the country. Dun-dun-dun-dun-dun-dun. And, you know, get something that needs a little bit of work.

39:20Dave Ramsey:And get something that not everybody's, like, thrilled that you bought it. If some of your friends make fun of you, you probably bought the right house for your first one. But you know what? The stupid thing around Orlando, Florida will go up in value. I mean, just put Mickey ears in the front yard. It'll go up in value. You know what I mean? It's going to go up. and you're going to make good money on it in a few years and your guys are going to be making more money and you'll be able to move up you know it's your first house and taylor do not buy this house until you are married yeah period no exceptions do not buy a house with someone you're not married to i don't care if we call them a fiance or not you're not married the law doesn't go oh wait they're a fiance the law says you're not married it's your roommate and that's a general partnership that has a whole different set of laws on it.

40:12Dave Ramsey:Do not buy a house, people, with someone you're not married to.

40:14George Kamel:If you listen to the show long enough, you'll hear that call and they're in a nightmare situation and they thought, well, I thought I'd be okay and life didn't work out as they planned.

40:23Dave Ramsey:Yeah.

40:23George Kamel:And now you don't have the protections that you would have if you were married.

40:26Dave Ramsey:So here's what's interesting also, Taylor, this difference in a 15 and a 30. I guess I've been doing this, it's coming up on 40 years now. and I've had the question from day one. Because if you add up the total, 30 payments on a 30-year and 15, I mean 360 payments on a 15-year and 180 payments on a 15, 180 payments on a 15-year for your 15-year mortgage, and you add up, including interest and principal, and you add up 360 payments for the 30, of the 30-year mortgage, and you look at them, it's hundreds of thousands of dollars more you pay for the same house. Hundreds of thousands in every case.

41:04Dave Ramsey:So I've been using that example to go never do a 30. My whole, for 40 years I've been talking about this, and people go, well, I'm going to take out a 30 and promise to pay it like a 15. Here's an interesting stat for you on promising to do stuff that you're not going to do. The FDIC has studied that, and they say that 97.3%, that's all of them, of the loans, the 30-year loans, are not systematically prepaid. They're often prepaid, but they're not systematically prepaid, meaning I'm going to add the difference every month, and I'm going to be very precise and very disciplined because I'm the one human on the planet.

41:48Dave Ramsey:No, you're not. That's just absolute bull crap. You're not. I'm very disciplined in my life. There's a lot of things I'm very precise on. I don't miss on. And I'm not going to set myself up and make that promise to myself. And I teach this crap for a living. Instead, trick yourself into doing smart things like signing up for a 15 instead of a 30.

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43:45Dave Ramsey:Welcome back to the Ramsey Show in the Fairwinds Credit Union studio. George Camel, Ramsey personality, is my co-host today. Maria is in Los Angeles. Hi, Maria. How are you?

43:56George Kamel:Hi. Hi, Dave. Hi, everyone. Thank you for taking my call.

44:00Dave Ramsey:Sure. How can we help?

44:01George Kamel:Yes. So I have a, my husband and I are in baby step number five, and we have five 29s for our daughters. The youngest is 10. The oldest is 20. and the new Trump accounts just came out. So we were debating whether to get an ESA or do the Trump accounts, not the$1 ,000, but the regular investing. And I wanted to know your thoughts on which one we should get.

44:26Dave Ramsey:You said you already have 529s?

44:28George Kamel:Yes, yes. And we learned about the ESAs doing the baby steps. But I'm just wondering.

44:35Dave Ramsey:I would just keep using your 529s.

44:38George Kamel:much smarter for college than the Trump accounts because the Trump accounts are going to be taxable income. The 529, if used for college, is completely tax-free, and it stays in your control. Uh-huh. Okay. So as far as the financial benefits, the 529 wins every time. Well, how much is in the 529 so far? For each one, about$1 ,500. Okay. We just started doing this. Good.

45:05Dave Ramsey:You got it going. You got it started. Good for you. That's more than most people. Most people just talk about it. You actually did it. Good for you. Thank you. Thank you.

45:13George Kamel:The other great thing is the 529 way higher contribution limits. There's really no practical limit compared to a Trump account. It's$5 ,000 a year.

45:21Dave Ramsey:Yeah.

45:21George Kamel:And the ESA is$2 ,000 a year. So you're good. The 529 plans have come a long way.

45:26Dave Ramsey:You always pick a 529 plan that has the, you have the right to pick the mutual funds and move the mutual funds that are inside of it. So if I don't like one of them three years from now, I can get out of it and move it. Some of the 529s are fixed. You're locked in and you don't want to do those. but the mutual the proper 529 the ones we like and recommend will allow you to select the mutual fund to put in the 529 and if it's underperforming you could deselect it and select a different one and just like you could do with a Roth IRA or something like that same exact process and that's going to give you the best rates of return and have give you the best best tax benefits and the most flexibility over the ESA and over the Trump accounts for sure.

46:19Dave Ramsey:The Trump accounts are all right, but largely it's a Trump thump my chest thing. It's a thing Trump's going, look how great I am. You already could do most of the stuff that the Trump accounts do. It's not like it's something really substantially earth shatteringly new other than it's got a big T on it for him.

46:40George Kamel:I did get my free thousand bucks, Dave, from my little guy. That's true.

46:44Dave Ramsey:You are getting free money from the government. If you have a child born. George is on welfare now.

46:48George Kamel:Yeah, apparently. You know what I thought? I thought, I've given so much money to the government this year, I'd like a little bit back.

46:53Dave Ramsey:So thank you for that. Oh, that's it. It's not actually government money. It's actually some of my money coming back to me because I've already given you more than that. I see it as a tax refund. I'll go with that. That's better than welfare.

47:04George Kamel:So thank you from the government. But if you've had a child born in 2024, 5, 6, 7, then you can get that free$1 ,000. And you got two of them. I got two. One was born in 25 and one was born in 23. So she missed the boat on that one. But we shall see. It is cool as a retirement vehicle for your kids because what you can do is once it becomes a traditional IRA at 18, you can do conversions to Roth and let that grow tax-free for the rest of their life.

47:30Dave Ramsey:Which is an interesting math riddle to run out. But again, the practicality of you actually doing all of that all the way through is almost zero.

47:38George Kamel:Well, and it's a good reminder, parents need to be investing 15 % into their own retirements first. Yes. Then save for college next, because that's coming up a whole lot sooner than your kid's retirement. So this is a nice to have for people who have -

47:50Dave Ramsey:This is like after you become really wealthy and you get bored and you're trying to come up with something else to do with money.

47:55George Kamel:It's like a baby step seven item for most people.

47:56Dave Ramsey:Yeah. And beyond. Yeah. It's like trying to figure it out. It's kind of like, you know, I tell you what I did do that was in that category. So the kids were teenagers and they were working, some here at Ramsey and some at the mall and some babysitting and dog walking or whatever. So I filed a tax return like on Rachel Cruz Ramsey at the time when she was 13. And for some reason, I remember it. It was$1 ,233. I don't know why I remember that. Let's go, Rachel. All right. I remember numbers. It's what I do. And so it's$1 ,233. I filed a tax return. And the taxes on it were like, because she could not take a standard deduction because I'm using her as a dependent.

48:37So I had to pay taxes on the 1233 because I filed that tax return for her on that.

48:44Dave Ramsey:But that enabled me then you can put up to your earned income into a Roth IRA. So she's 12 years old. I opened a Roth IRA and put$1 ,233 in it. And I paid a little bit of taxes. Those were extra dollars coming out of my pocket. It didn't cost the kid a thing. The kid made$1 ,233, put it in her. I want to buy a car account. That's what she did with it. But the but I actually filed a tax return on it, paid a little bit of taxes and then put the 1233 out of my pocket and put it in there. And then I ended up doing that subsequent years on all three of compounded for the next. So by the time they get out of college, all of their earned income had been put into Roths by me as extra.

49:24Dave Ramsey:But that's beyond the baby steps. That's way past. You're out of debt. Your house is paid off. You're doing everything you want to do with generosity. And I'm just going, what's a math fun thing? But, I mean, you take that for a 12-year-old. What's 1 ,233 become by the time they're 76? A lot. Hundreds of thousands of dollars tax-free. Pretty cool. And so in addition to the other thing. So you can do some stuff like that. I would do that kind of thing before I'd screw with a Trump account.

49:50George Kamel:Yeah. I just don't want someone calling in going, hey, my kid had to go into a bunch of student loan debt. But, hey, they've got$1 ,000 in a retirement account. That's not what you want.

49:58Dave Ramsey:Don't do it in that order. You're exactly right. Stick with the baby.

50:00George Kamel:Time and place for it.

50:02Dave Ramsey:Good point. Good point. I'm just shocked to hear you're on welfare. That's a new thing. Jonathan's in Jackson, Mississippi. Hey, Jonathan, how can we help? Hey, Dave. Hey, how y 'all doing? Better than I deserve. What's up?

50:15George Kamel:Well, I got good news, and I guess you could say good news, too.

50:18Dave Ramsey:I just wrote the last check yesterday to pay off all our debt, about$62 ,000 total. House and everything? Well, the house was already paid for. Way to go, Jonathan. How does it feel to not have a debt in the world, dude? Different. Unusual. Surreal. Yeah, for real.

50:40George Kamel:Good for you, man. Well, thank you. I appreciate that. It was a lot of hard work. My wife and I both worked part-time jobs to get it done, and she worked actually full-time and part-time while pregnant. And we had our first child in January, and we had to quit our part-time jobs. But we still didn't quit paying down on it. Good for you.

51:01Dave Ramsey:Good for you.

51:02George Kamel:What's your question? My question is, I haven't really, I've been so focused on that, I haven't really looked at our retirement accounts. So my question is, I have an old IRA, God, from years ago, and it's got a grand sum of two cents in it. and my question is should I keep start re-contributing to that and have my wife open up her own or should we do like a joint retirement

51:27Dave Ramsey:there's no joint retirement there's no joint it's tied to one person they always have one name on them you can name her as a beneficiary she can name you as a beneficiary in the event of death and if you get divorced the judge will make you split it up anyway but it's in your name and or her name so you're just she can have an IRA you can have an IRA. And you can have that, take that old IRA and start it. And so sit down with a SmartVestor Pro and start planning out your newfound ability to save and invest. Just jump online at RamseySolutions.com. That'll help you pick out one with the heart of a teacher.

52:01Dave Ramsey:And you guys sit down and figure out whether you would need to roll that old IRA into some good mutual funds and all the stuff you're going to want to do now that you don't have any payments. I'm so proud of you.

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53:46Dave Ramsey:Trudy is in Los Angeles. Hi, Trudy. How are you?

53:50George Kamel:I'm good. Thank you, Dave.

53:52Dave Ramsey:How can we help?

53:54George Kamel:Okay. My question is, I just got married about five months ago. My husband is retired. He has like 10 properties and his retirement income is from renting those properties. When we got married, He says, you know, I came in with debt. I have about$48 ,000 worth of debt. And so he says, you just pay your bills, use your money, because I receive a pension. He says, use your money to pay your bills. You know, don't worry about any of the expenses. So, you know, he buys all the food. He puts gas in the cars. He takes care of everything. He's just kind of absorbed me into his home. his home. So I'm just wondering, is it okay to stay separate in our accounts while I get out of debt?

54:45George Kamel:And then should I talk about moving into one account? Or is it because he's so well established and maybe he should stay separate to protect his income?

55:01Dave Ramsey:If he has to be protected from you, he shouldn't have married you.

55:06George Kamel:Oh, well, maybe that's the wrong choice of words. But I don't know. I just wonder.

55:12Dave Ramsey:If you guys want to do this, you do whatever you want to do. I wouldn't recommend it. All the years of doing what we do, we see the couples that have the best marriages and the best wealth building probabilities are the ones that work together and combine and make combined decisions.

55:31George Kamel:Okay.

55:32Dave Ramsey:And so we don't have one playing daddy and one playing little girl. It's okay, little girl. I'll just take care of you. Or mommy's going to put me on an allowance. I work hard and I give mom the check and then she tells me what I can do. And he's 60 years old or 40 years old and mommy's telling him what to do in the form of his wife. No, that's not the healthiest form of relationships that we see. It sounds like you guys are both okay with it. If you want to do it, you're free. and it's America and you can do what you want to do, but you're called here asking if you should do it. No, I don't think you should.

56:10Dave Ramsey:I think he should write a check today and pay off the debt that you have and your pension ought to go into the same account that his income goes into. And we sit down and decide what we are going to do with our money because we are now married. The preacher said, and now you are one.

56:27George Kamel:Okay. If you listen back to what you said, you basically said, I'm going to be punished until I pay off my debt, and then maybe he'll let me into his financial world. Right?

56:38Dave Ramsey:Well, or he's just being real sweet and saying, I'm going to take care of you, little girl, while you go clean up your mess.

56:45George Kamel:Yeah.

56:45Dave Ramsey:That's just not a cool, I don't like that vibe. Yeah.

56:49George Kamel:What is your income compared to his?

56:55George Kamel:I'm not sure how much comes in from the rentals. he's got 10 properties. But he lives very humbly. I mean, he doesn't even tell anybody that he has these properties. Only me and his son knows that he does. That's fine. I'm not asking him to put it on a billboard, but he should tell his wife. But if you make$2 ,000, he makes$10 ,000, it's going to take you a decade to pay off your student loans if you're lucky. So that's where I'm going. If you combine this, it's done so much faster. He probably has the money sitting around to just knock it out.

57:27Dave Ramsey:and and oftentimes trudi again you guys if you guys want to do this it's whatever you want to do you can do but you asked us and so we're obligated to tell you what we think we love you and what we think is going to be best for the two of you this comes up most often in second marriages that are later in life we don't have two broke 22 year olds asking this question hey they don't have 10 properties, right? But there's this weird thing that happens that you feel like you're bringing the new family, the new marriage down, and he feels like he brought more to the table, and that's just not how it works.

58:12Dave Ramsey:It's a combining of our lives for unity. And so you've got to work through the emotions of that, both of you. And he's humble. He doesn't tell anybody. Well, he ought to tell his wife. Hello. I'm pretty humble about some things. And I ought to tell my wife, honey, this is what we made this year. You know, this is what our tax returns is. This is what we just, you know, we just closed that. We just got that thing signed and here's what we made on that. And she has very little inner working knowledge of a lot of that, but she ought to know what's going on Sharon wants to know she needs to know I get hit by the proverbial milk truck she's going to need to know what you know how this is going to work out um and how how she can function without me paying all the bills and so forth and so um these are two standalone adults not what we would call a kept woman um and so that's that's what we would want for you guys we would want some more of that and guys it's interesting I didn't even know this I found it out later as we've been talking about this and teaching it for all these years.

59:18Dave Ramsey:The old marriage vows, I mean, you've heard, most people heard the standard marriage vows, in sickness and in health, for rich or for poor, unto thee, you know, and so on, right? But there's an actual set of marriage vows in the ancient Book of Common Prayer, like if you're Orthodox or something, you would find it there. And it says, in sickness and in health unto thee all my worldly goods i pledge

59:47George Kamel:at the altar in front of the preacher all of my wealth income toys it just became ours it's now

59:55Dave Ramsey:a we it's not a mine and it's not like i'm gonna pat you on the head and take care of you because you're somehow deficit and i'm superior and he's not that guy this guy here is not trity's husband's a nice guy. He's a sweet person and he's not being that condescending.

1:00:13George Kamel:He just lives so long in his own world. He's going, hey, let me just cover the bills. You do your thing. I'll just take care of it.

1:00:17Dave Ramsey:I got you covered, kid. I got enough money. I'll take care of you. I love you. And that's all he's saying. But the downside of that is then that Trudy doesn't, you know, she doesn't have insight into how the whole thing's operating. And she should as his wife, I think.

1:00:34George Kamel:Well, and there's a lot of unity and excitement of just going, we're going to build wealth together versus, hey, let me handle it. You do your little thing over here. I got this. I'll cover the bills.

1:00:44Dave Ramsey:And I run into it. Truthfully, it's a blue collar thing more. The neighborhood I grew up in, it's like the mom takes care of the money and dad just works shift work and comes home, brings the check on Friday and plops it down. And they always call the wife mom. I just call my wife mom. I call Sharon mom or Mimi. That's what I call her. We're on the golf course and i'm like good hit mom you know and they're like it's your mom no it's not it's not my goober it's the mother of my children but the uh so but that's you know and so that's the neighbor that's the the vernacular i grew up with kind of thing but it's like you know mom only gives me so much allowance and i can't do so much says a 45 year old guy working 60 hour weeks and it's like his wife is his mother the old ball and chain the old ball and chain that's exactly Yeah.

1:01:34Dave Ramsey:And because she's assumed headship in the household. And he just defers to her then. I'm on an allowance and I can't stop by and I can't do, you know, I can't do that. We can't go fishing Saturday. I don't have the license, you know, all, you know, all this stuff. It's the stuff I heard my whole life. It's like, well, you know, it's like, are you a child or are you like a man? That can't be a quality fun marriage. It's just very transactional almost. It's almost a cop-out. Like, I don't want to be responsible, so I'm going to let her or him be that. And Trudy's not any of that. No. But this whole discussion, though, goes in the same bucket.

1:02:15Dave Ramsey:But Trudy's is much, honestly, much more functional than a lot of the things we hear. Yeah. And they'll be okay. There's a kindness coming from her husband, I heard. Yeah.

1:02:24George Kamel:She received it as kindness. You said, hey, you'll be fine doing it this way, but it could be so much better.

1:02:30Dave Ramsey:Yeah. I think it'd be better if the two of you both stood up like two adults. and we, I, you know, I brought you, you know, this is, you're my wife, and we're going to write a check today and pay off this debt. He's got, that guy has the money in his account right now to pay off that debt. And then it just uncomplicates everything. And you didn't marry him for that, or you wouldn't have gotten married. He wouldn't have, he wouldn't have gone for that.

1:02:55George Kamel:He would have smelled it a mile away. Exactly.

1:03:08Thank you.

1:03:33Thank you.

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1:04:51Dave Ramsey:Buying or selling a home is a really big deal. You don't want to overpay for a house. You don't want to sell your house too cheap. You know, we had a caller the other day, George, that had listed their, his mother-in-law listed the house. Oh, boy. For$335 ,000. It sold in two days. The appraisal came back at$375 ,000. And he was wanting to know how to get his mother-in-law out of the contract because she had sold her house too cheap. They left a lot of money on the table. $30 ,000,$40 ,000. You know who I blame? Real estate agent. Oh. Who put this house on the market? $40 ,000, 15 % under what it should have been priced at.

1:05:33Dave Ramsey:She didn't do her research, didn't run the comps, didn't price it. He or she, the agent sucked. So you need to get a real estate agent. You make a real estate mistake. You don't make$100 mistakes on real estate. You make$10 ,000 mistakes on real estate. So you need to get a high-octane, high-protein, professional real estate agent. And we vet the agents that we put on our website to recommend to you. They're called Ramsey Trusted. They do, you know, 50 to 300 transactions a year. They don't do two transactions, and they actually know how to do a comparative market analysis, an appraisal to get your house on the market for the right price, so you don't call me up and say my mother-in-law just sold her house for$40 ,000 too cheap.

1:06:17Dave Ramsey:Ouch. Ramseysolutions.com slash agent, and you can find a Ramsey trusted agent for free or click the link in the description if you're on YouTube or podcast. Andrew is in Cincinnati. Hi, Andrew. How are you?

1:06:32George Kamel:I'm doing pretty good. Thank you, Dave and George, for taking my call. Sure.

1:06:36Dave Ramsey:How can we help?

1:06:37George Kamel:So my question is, well, first I want to start off by giving the context. I recently just gave my life over to Jesus Christ and I'm taking the Bible seriously with my life. Good for you. I've discovered that I have a Ph.D. in BUMB, just like you would say, and I'm new to the Ramsey Baby Steps. I have$41 ,000 in debt,$25 ,000 a part of that total combined debt of an auto loan,$9 ,000 in one credit card to about$1 ,300 in another credit card and a$5 ,000 debt that I owe my parents.

1:07:15Dave Ramsey:How old are you? I just broke up with my girlfriend. I'm 32 years old. Okay. What about your girlfriend? Say that again.

1:07:21George Kamel:So I just broke up with my girlfriend. She didn't want to go to church. She didn't believe in God. So I want to do a 180 with my life and be a good steward and a leader to myself and my community and my future family. Wow.

1:07:35Dave Ramsey:Man, you have been through it. Look at you. You are on fire. Good for you. Okay. And what do you make a year, sir? I make$52 ,000, have my primary job, my secondary job as a real estate agent. I've made about$25 ,000. Okay, so$75 ,000. All right, very cool. Yes, sir. Very cool. Well, as you've already figured out by poking around the Ramsey stuff, we are also Jesus people, and we build the systems that we use based on biblical principles. Now, not everything we teach is from the Bible. some of it is the implications are from the Bible but like the Bible says the borrower is slave to the lender so we take from that I don't want to be in debt which is why you called so that kind of is the way we now how do we do that how do we get out of the debt well that's not necessarily a biblical thing but it is it is a cool thing because here's part of your young your young faith experience as you're brand new in all of this what you're going to discover is that God is going to use this money subject to help you with the transformation you're going through in your in all parts of your life because it's you're going to become a different person as you go along the process of getting out of debt and as you go along the process of handling money properly and becoming the different person is actually the goal the money stuff is a side goal Does that make sense?

1:09:06Dave Ramsey:Yes, sir. Yes, sir. And so I'm real proud of you. Thank you for giving us all that context, and I'm proud of where you are at this moment. Okay, so$75 ,000 a year, and you probably heard about the baby steps. They're not in the Bible. We made those up, but they work. It's in second opinions. It's in second opinions, second hesitations, yeah. And so, yeah, you're going to first save up$1 ,000 after being on a budget. Now, being on a budget is a biblical thing. God talks about planning all through Scripture. Jesus said, don't build a tower without first counting the cost, lest you get halfway up and you're unable to finish, and all who see you begin to mock you and say, this man began to build and was unable to finish.

1:09:48Dave Ramsey:So you don't build a house without a blueprint, and you don't build a life without a budget. So you're going to do a budget on every dollar. We're going to hook you up with that and pay for it. The upgraded premium version will give you a year's worth of it when we get off the line here. So you're going to do your budget, and in your budget, First thing you do is you find$1 ,000 and set it aside as your starter emergency fund. And then we're going to list these debts, smallest to largest. $1 ,300 worth of credit cards will be your small one. And we're going to pay minimum payments on everything but the little one and attack the little one with a vengeance.

1:10:23Dave Ramsey:Now, are you paying your parents' payments on the$5 ,000? Yes, sir, I am. Okay, good. Okay, so keep paying that minimum payment. Keep paying your car payment and keep paying the$9 ,000 payment. And then all other money we squeeze out of the budget. After we've got our baby step one,$1 ,000, we're going to throw at that$1 ,300 credit card and cut up all the credit cards when you get off the phone. Okay. Yes, sir. Get a debit card. It'll do everything your credit card will do except going debt.

1:10:54George Kamel:And where I broke up with my girlfriend, she had her house on land contract and I helped her pay all of that. And so, of course, I wasn't able to pay down a lot of my debt. So I think my next question is I literally moved in with my parents. Should I seek independence and just go rent while I'm doing this? Should I live with them? Should I save up for a home? How exactly should I go about that?

1:11:16Dave Ramsey:So you've been there for two weeks. Yes, sir. Yeah. Well, you don't want to stay there indefinitely, But you're in the middle of a chaotic, transformative period of your life. Okay. You have a breakup, a move, a reset spiritually. You are adjusting, you know, the other parts of your life to align with the spiritual connection with your newfound faith. And so all of those things are good. I'm okay with you using your parents as a safety net but not as a hammock.

1:11:56George Kamel:Yes, sir.

1:11:57Dave Ramsey:So I would establish a period of time I'm going to stay here, assuming that it's not a toxic environment, assuming it's a good environment, a period of time I'm going to stay here, and after that I'm going to be out. And so maybe you sit there six months and you use that six months rent-free to really knock out a few of these small debts and get some wiggle room in your budget. I don't think a 32-year-old is going to want to stay there for three years unless you're weird. No, sir. No, sir. Does that make sense? So let's just kind of find that balance. Maybe six months is the number. Maybe three months is the number.

1:12:39Dave Ramsey:I don't know. You look at it and you figure it out. But, yeah, start, you know, let's get our feet under us and get, you know, touch ground here and then say, OK, based on that wisdom and what my budget's telling me, I'm going to make a much better and much more informed rental decision. I mean, I'm going to rent the cheapest thing I can possibly rent, but be out on my own and have my adult dignity back, so to speak. But using them as a safety net is fine. and uh so people often i always tell we're gonna we're always hard on parents have their kids in their basement and all that kind of thing but people always say ramsey says never do that no we actually do think there's a moment in time that for a short period of time that mom and dad

1:13:24George Kamel:can be a great safety net for adult children when there's transition all of that yeah we don't want

1:13:30Dave Ramsey:to be a hammock and not for andrew because he's not in this situation but uh uh but for uh you You know, everybody else, I mean, that's the thing. For everybody else, you know, an eagle that doesn't leave the nest is a turkey. So you just can't, that's a problem. So we've got to work that out. But, you know, can you come home and heal if the eagle got, you know, got damaged? Yeah, and he's in a healing period, a changing, a metamorphosis period right now. And so good for you and good for your parents that that's available to them. available to you, that you've got a good relationship with them.

1:14:10Dave Ramsey:So yeah, let's do a little bit of that. But go ahead and figure out how long that is. Is it three months, six months, nine months? What is it?

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1:16:01Dave Ramsey:The Ramsey Show question of the day is brought to you by Why Refi? missed private student loan payments putting you in default can keep your budget stuck. Y-Refi helps borrowers explore how fixed rate financing with low payments based on what you can afford gets you moving again. Visit Y-Refi.com slash Ramsey. That's the letter Y-R-E-F-Y.com slash Ramsey. Might not be in all states. Today's question comes from Michael in Alaska.

1:16:32George Kamel:How do you protect your debit card while shopping, either online or in a store? I'm worried about someone accessing my bank account funds. Simple question. I've got a lot of ideas here as sort of the mixture of my worlds of tech and finance. Have at it. One of the main things, and this is great with modern technology, is Apple Pay. So Apple Pay blocks your actual card number at these transactions, and it's a tap to pay, so your card is never actually used or exposed. So that's one way it's encrypted. Another one, and this one's actually a new advertiser on my YouTube channel, but I've used them for years.

1:17:07George Kamel:They're called privacy.com, and they create virtual card numbers that you can lock to merchants with spending limits, time limits, one-time use. So I use those when I shop online because your actual debit card number is never exposed. It's a virtual card number that's attached to your bank account or debit card. So that's pretty cool too.

1:17:25Dave Ramsey:Most websites, including ours, and I've learned about this because of owning Ramsey. Otherwise, I probably would have never learned about it. When we accept your debit card to purchase a total money makeover book or George's book on our website, the number is not stored literally. It is tokenized is what they call it in the tech world. And so it's encrypted, in other words. and so we have a token an encrypted token on you then that when you come back you can use the same card very easily so like if you return to a website of any kind where you do shopping that's what's happened if it's a decent website if it's sophisticated in any way it they will have tokenized it meaning they're not in their database to be hacked is not your entire card number we simply do not have your entire card number we it's gone we could get it But we have access to your account through that token only.

1:18:28Dave Ramsey:And so it keeps fraud from actually happening because we would have some liability if you got hacked through here. We don't need the PR problem of that. So if you're dealing online, you're going to run into that a lot with reasonably sophisticated sites. The second thing is that you are not liable for charges on your debit card that were fraudulently made, just like you're not on your credit card. And I've heard people incorrectly, and that's a minimum, ignorantly say on other financial shows, well, you'd never get a debit card because the credit card protects you in the event of fraud. Debit card gives you the exact same protections.

1:19:16Dave Ramsey:Look it up on Visa.com. Look it up.

1:19:19George Kamel:It's zero liability policy.

1:19:21Dave Ramsey:It says it right there. It's got a little paragraph called the zero liability policy on all Visa and MasterCard products, whether it's a Visa credit card or a Visa debit card, a MasterCard debit card or credit card, zero liability in the event of fraud. So if someone steals your number and buys stuff, and this actually happened to Sharon a week and a half ago. Oh, wow. Our bank contacted us and said, did you buy$10 ,000 worth of Louis Vuitton in South Carolina last week? And we're like, no, we did not. We weren't in South Carolina, and Louis Vuitton was not on the Christmas list. So it didn't happen.

1:20:08Dave Ramsey:and uh they're like okay 84 000 worth these people whoever wherever they grabbed her number wherever they scarfed her number they hit louis vuitton and coach all over america and i don't know how they were doing it wow but it was hitting my wife's it was hitting my checking account with my wife's debit card and you know what it cost me zero dollars zero dollar you know what it cost stole louis vuitton i don't know i don't know did they actually let those purses and suitcases get out the door with the fraud they might have but when they got back and the charge was denied maybe they recalled the order maybe it was an online order i don't know but it was 80 000 that's why it was a lot i think they knew whose card they'd gotten a hold of yeah they went ding ding ding i think we just hit the lottery so uh we don't know what happened whether it got picked up whether somebody took a picture of it in a back room or where it happened but that happens with credit cards it happens with debit cards it's identity theft and there's fraud online and there's fraud in stores and there's atm you know gas pumps or have you know the artificial thing where they the crook is scanning your number and keeping your number and that kind of thing i've heard of all of these things happening i have never lost a dime and i've had a debit card for as long as there have been debit cards, probably 30 something years.

1:21:32Dave Ramsey:Wow. I've never lost a dime. Now I've had all kinds of situations where they come, the bank sends me the email that says, is this you? Or the fraud department will call and say, is this you? And the 800 number rings on the phone, right? And, but they do that with your credit card as well. They'll check. Yep. One good note. If it breaks the algorithm. so like if we if we head out of the country uh we just spent three weeks in argentina if we head out of the country we ring we we email my banker my private banker and say we're going to be in argentina that is us those charges are us look for that you don't need to because that'll trip the algorithm and the whole stinking thing will get shut down i'll be down there with no money that's not a good idea right so but i let them know but uh uh but the algorithms are all they're excellent.

1:22:19Dave Ramsey:They're getting better all the time. The identity theft protection that Xander has is there as well, but I've never had to access that for any of this. The debit card is as safe as the credit card, period. And especially if you keep up with your stinking banking. Yeah, the big part is just pay attention. You never look at your checking account, but once a year, well, no wonder you got screwed because you're screwing yourself. You're doing a bad job of handling your money. You need to know what's going on with your money. So, same thing.

1:22:49George Kamel:I get text every transaction that comes through goes to my phone. Really?

1:22:53Dave Ramsey:Yeah.

1:22:54George Kamel:Every single transaction? That would drive me bananas. I guess it's probably when you're using it at a point of purchase. I don't get it at all. I don't get a single transaction. You're missing out. It's a good time. It's the only people that text me is my bank. George, it's a good time. I can't get a hold of my wife. It's a party. It's a banker party. It feels good to get a text. Sounds like a party

1:23:12Dave Ramsey:to me. That would drive me bananas. I don't need all that activity, but I do need the protection, though. I don't want some crook loading up on Louis Vuitton with Sharon's name. I don't want that happening. And they tried. Man. They tried. And we were happy to sign. I think they sent. Oh, they did. The bank sent over an affidavit because this was an unusually large. Yeah, that's like a police report level. Yeah. So we signed affidavits and everything for them to put in the file.

1:23:38George Kamel:Did they do a search of your house to make sure there was no Louys in there?

1:23:42Dave Ramsey:well they would find louis in there but they would be older than last week and uh and they would have been actually paid for by us so yeah and not stolen by us but yeah wow uh not in my closet but in my wife's but anyway yeah so i covered all this dave uh in my

1:23:59George Kamel:book in the credit card chapter breaking free from broke i literally have a spot about the fraud protector that's the archetype of the credit card user who says well credit cards are safer and I go through all the nitty-gritty details, the Electronic Fund Transfer Act and all these 17 ways you can stay protected, and it's really a nothing burger. It's more paranoia at that point and a justification to keep your credit card more than it is reality. So I want to just convict everyone out there going, well, I don't want to cut it up because fraud could happen. There's a higher likelihood you put yourself into debt than fraud happening if you're using that credit card.

1:24:30Dave Ramsey:Well, fraud, you really should – the only way you're going to catch it on your credit card is if you look at the statement and go, well, I didn't charge this. The only way you're going to catch on your debit card is if you keep up with your statement. Keep up. And I didn't charge this. So you actually have to freaking pay attention to your life or you're going to crash. Because, I mean, there's crooks everywhere. There's more people. There's people that work harder at being crooks than they do at their job. And they're even better at it than they are at their job.

1:24:58George Kamel:And if you lose your debit card, you've got to lock that thing immediately. So like Fairwinds, which has been an awesome partner, I've got their debit card. If I lose the Fairwinds debit card, I go into the app and hit lock. No one can use the card. I'm pretty sure our bank has that one too. Yeah, there's a lot of these protections these days that it's actually safer than it's ever been to use a debit card.

1:25:17Dave Ramsey:Yeah, and it may actually, because the algorithms are more sensitive, it may actually be even safer than a credit card. I believe it. But they do have the same exact fraud protection. You get charged zero. That's Visa and MasterCard's guarantee on their written agreements.

1:25:51Dave Ramsey:Welcome back to the Ramsey Show in the Fairwinds Credit Union studio. I'm Dave Ramsey, your host, George Camel. Ramsey personality, number one bestselling author, is my co-host today. Mike's in San Diego. Hey, Mike, what's up? Great to speak with you guys today.

1:26:07George Kamel:You too. I'm calling to find out if you all think we, my wife and I, are potentially contributing too much to retirement to a time when maybe a little bit further down the road we won't have access to that money for a while, and there's some other things we could be doing with it.

1:26:24Dave Ramsey:Okay. Are you out of debt? Yes, sir. House and everything? Yes, sir. Good. Way to go. How old are you guys?

1:26:36George Kamel:We are 41 and 39.

1:26:39Dave Ramsey:Good for you. Okay. And how much is in your retirement accounts now total?

1:26:44George Kamel:So because we have two different jobs, we have access to a number of different accounts. So between the 401k, the 457, and the 403b, we have 600k. and then in an after-tax brokerage we have$600K, and then we've got$100K in a 529 and then$40K in an emergency.

1:27:08Dave Ramsey:Excellent. Okay.

1:27:10George Kamel:So if you have$600K in a brokerage account,

1:27:13Dave Ramsey:I assume the$600K in an after-tax brokerage is invested in good mutual funds?

1:27:19George Kamel:Yes, well, it's between that and S &P index funds.

1:27:25Dave Ramsey:Okay, good mutual funds, yeah. I mean, you're earning market returns then on those investments, which means that$600 is going to double about every six years or so. Okay, so when you're 47, it'll be 1.2. And why would you need more than that before you're 59 and a half? Oh, by the way, when you're 54, 53, you'll have 2.4 if you don't add anything to the brokerage account.

1:28:01George Kamel:Right. I think the key there is we have the ability to contribute in pre-tax money, right? So saving us quite a bit in our income to both a 401k, a 457, and a 503.

1:28:16Dave Ramsey:Yeah, but you said, your question was, am I currently putting too much into retirement? Wasn't that your question?

1:28:21George Kamel:Correct. Yeah, so we're maxing out all of those accounts. Yeah, but it's only$600K.

1:28:26Dave Ramsey:And then the other$600K is an after-tax, right?

1:28:30George Kamel:Correct.

1:28:30Dave Ramsey:Okay. And you said, I'm afraid I'm going to have too much of it tied up and I won't be able to get to it. But my point is your$600K is going to be$2.4 million before you get to$59.5. And that's if you don't add anything to it in the brokerage account. Right. That's the brokerage, but... And the other account will be growing faster because you're putting more into it. That's me saying if you don't put anything into the 600K. So what is it that you think you're going to need to buy that's millions of dollars before you're 59 and a half?

1:29:05George Kamel:Well, we are in San Diego, so houses are not cheap. Do you not own a home yet? We do.

1:29:13Dave Ramsey:Okay, and it's paid for? Yes, sir. And what's it worth?

1:29:19George Kamel:Probably$1.7.

1:29:20Dave Ramsey:Way to go. You guys have done so good, man. Congratulations. You got a lot of money. So what's your income?

1:29:29George Kamel:Take-home is around, depending on the year and bonus, maybe around$300.

1:29:34Dave Ramsey:Okay. Man, you guys have just done a wonderful job. Way to go.

1:29:38George Kamel:So what are those future goals? So there's other things that we want to do. Have you guys laid those out to see what they're going to cost, when they're going to hit? Well, the big one for us is we'd love to either invest in real estate locally, which given the area we're in is a challenge because it's so expensive, or even potentially upgrade in-house. But given where we're at, you sneeze in the wrong direction and your taxes go through the roof or whatever else with respect to homes here. But because we're contributing close to$75K toward retirement, if we were able to reallocate some of that, then it would be a little easier.

1:30:16Dave Ramsey:600K after tax account at all?

1:30:20George Kamel:Not right now. Okay. No.

1:30:22Dave Ramsey:Okay.

1:30:24George Kamel:All right. If you guys make 500 gross, then 15 % is 75K. So I think you guys, you know, obviously you can invest more than that. Your house is paid for, but it doesn't sound like you're contributing so much. You're filling them up. You're maxing them out. And then once you reach the point where you don't have access to those, you can go to the brokerage. Yeah.

1:30:41Dave Ramsey:Buy some real estate. The answer overall is to be investing, and you're doing that. And so are you going to have enough at retirement? Yes, you're going to be in great shape. You're already in great shape, and you're only 41 and 39 years old because you've just done a wonderful job. So now it just becomes a nuance of how we want to flesh this out. If instead of maxing out all available retirement and keeping the government's hands off of it, if instead of doing that, you said, I'm going to put 15 % into my Roths and my 401k Roths and so on. And the rest of it, I'm going to put over into this other brokerage because I want to do some other things like buy some real estate for cash.

1:31:23Dave Ramsey:And that's going to be my other investment that I want to do. Then that, you know, that's a decision and you're not wasting the money. Both are going towards investments. Both are going towards good quality investments. So I don't have a problem with it at all. You're going to have plenty for retirement. Now, what I would challenge you to do is to monitor that as you go along. So let's say that you said, all right, we're going to put 75K into retirement. That's 15 % like it was baby step four. You're not at baby step four anymore. You're at seven. But let's just say, okay, we're going to put 50.

1:32:00Dave Ramsey:And everything else we're going to put in the after tax brokerage account. And when it gets big enough, we're going to buy a piece of real estate with it. That's okay. But what I would do as you're doing that then is I would monitor going along and say, you may look up someday and go, okay, now I've got enough in there or I'm putting too much in that 600. I could be keeping the government's hands off of more of this money by maxing out a few of these other things and come back and max out everything. In my case, what I personally did in your situation, my income was different than yours, but I maxed out everything to keep the government's hands off of it and then piled up cash for after-tax investments.

1:32:42Dave Ramsey:And I still do. I still use a simple brokerage S &P 500. I don't even have it in a brokerage account. It's just an S &P. And I just throw cash in there. I get a big royalty check from a publisher, and I just chunk cash over there. and when that account gets big enough, I go buy a piece of real estate with it. That's my personal strategy. It's not any fancier than that. But I'm maxing out all the other stuff, even at 65 years old, just because I get so pissed off about how much of the government takes from me, and I want to get it all in any kind of tax-protected account I possibly can. But you could limit that for a little while and get that$600 up to$2 million and then start that plan.

1:33:28George Kamel:Yeah, that's really the key there, which is kind of, it's hard not to contribute to some of those accounts because of the tax benefits. But I also want to do these other things sooner than I'm going to be able to

1:33:39Dave Ramsey:if it's all over in that other account. Yeah.

1:33:42George Kamel:So maybe you max out the ones with the best tax advantages and then move to the brokerage once you get that piece of property.

1:33:47Dave Ramsey:So if you put$75 away in your retirement, how much more could you throw at your after-tax brokerage account beyond the$75? It depends on how much we want to have fun during the month. I know. I know. How much are you thinking? I think it's really five grand. It depends on how motivated we are. How much are you thinking? A couple thousand at least. Okay. All right. Then that's not a big deal. Yeah. The big thing is going to be keeping it invested well, and it's going to double on your investments in six years, seven years.

1:34:38Dave Ramsey:All right, let's cut to the chase. It's easy to get discouraged about crazy house prices and interest rates. But when you have the right real estate agent to help you buy and sell the right way, you'll have confidence to make smart decisions. Ramsey trusted agents aren't just experts who guide you through buying or selling. They're people you can trust to have your back from the first call to closing day. Find a Ramsey trusted agent near you at RamseySolutions.com slash agent. That's RamseySolutions.com slash agent.

1:35:26Dave Ramsey:Thanks for joining us, America. So the network net worth calculator is happening, George.

1:35:32George Kamel:Oh, yeah. Coming up in a few episodes, I'm going to be walking through the latest data on net worth by age. A sort of America's financial report card, if you will. And I want to know how our audience stacks up. And here's my bet. I bet you that our audience has a much higher average net worth than most of America. So here's the challenge. We're going to include a link in the show notes of this episode to our Ramsey net worth calculator. Here it is. Go calculate your net worth. Let us know in the comments your age and your net worth, wherever you're watching. We're going to compile the comments and see how our audience stacks up against the data.

1:36:04George Kamel:So head to the show notes if you're on YouTube or podcast. Take the net worth calculator and put it in the comments with your age. That'll be a fun exercise. It's all at RamseySolutions.com, right?

1:36:13Dave Ramsey:That's how you find the calculator?

1:36:14George Kamel:And we'll link it directly in the show notes if you jump down there.

1:36:17Dave Ramsey:Okay, that's the easiest way. All right. But yeah, because it's my scientific research. Deep in the internet there on the Ramsey page. There's a lot of Ramsey solutions pages. So net worth calculator is a good measure because that's, you know what? We need to teach people better to use that. We're actually working on adding a net worth calculator. Automatically does it inside your every dollar budget. Oh, to track that. Where it tracks all your stuff and then constantly is updating. You know, like you hook it to your mutual fund accounts and you hook it to everything. It'll add up your investments, your cars, your home.

1:36:50Dave Ramsey:It wouldn't have your real estate. You'd have to do your real estate by hand. But, you know, you just open up your every dollar and you go, oh, my net worth went up. You know, like Warren Buffett says, you know, stock price goes up on Berkshire Hathaway. His net worth goes up. Yeah. All you've got to do is just calculate the stock price, you know. So same kind of thing. But the net worth is an actual measure of your financial health as opposed to, say, the stupid-butt FICO score.

1:37:17George Kamel:You got an 850 with negative net worth. You're not crushing it.

1:37:21Dave Ramsey:You're crushing paying the bank too much. Yeah. And so if you said, I actually have a net worth, a positive. I mean, most people have a negative net worth, by the way. You owe more than your worth.

1:37:34George Kamel:If you got nothing in savings and debt.

1:37:36Dave Ramsey:I've got$100 ,000 in student loan debt and I live in an apartment. You have a negative net worth. Okay. Because your net worth is what you own minus what you owe, assets minus liabilities, which is the actual measure of financial health. If you want to set long-term goals, like 50-year goals, 30-year goals, and you say, I want to be a millionaire, well, a millionaire is a net worth goal. That's what you own minus what you owe equals a million dollars. If you owe nothing and you own a million dollars worth of stuff, you are by definition a millionaire. And people are like, well, you don't make a million.

1:38:22Dave Ramsey:It's not how much you make.

1:38:23George Kamel:I don't feel like a millionaire, Dave.

1:38:24Dave Ramsey:This is not a how much you make thing. This is a how much you keep thing. A lot of people make a million dollars and got nothing. Welcome to sports world, right? Welcome to the NFL. okay i got nothing honey but i made a lot of money or other people didn't make nothing and they saved all of it and they got millions of dollars so your net worth is actually not your income is actually your measure of financial health it's one of the primary measures and we've gotten away from it because the banks have taught us to get screwed by them they've taught us thoroughly what's in your wallet not your card my money that's my answer samuel jackson i'll tell you what's in my wallet had got nothing to do with you nothing to do with you actual benjamin franklin in my wallet looking at me smiling he's that's what's in my wallet so i mean you know you but they've taught us over and over and over with these dadgum, you know, more money is spent advertising Visa, MasterCard, and American Express and Discover than almost any other product in the world.

1:39:35Dave Ramsey:That should tell you something. Hundreds of millions of dollars a year spent advertising, teaching you that you can't live without those goobers. You need the rewards. You need to up your score. You need more lines of credit. That's what's pitched. Yeah. You're walking through the airport and they're yelling from the table, you can get airline miles sign up here like a carny it's like a carny and it just like the carny when you go over and pay your money you don't get the stuffed rabbit because the game is rigged just like a carny only it's southwest air is the carny and they're standing in front of you while they're telling you to put your seat belt on selling you a credit card from the aisle and the stewardess is doing it You don't think these people are good at what they do?

1:40:27Dave Ramsey:They're better at what they do than you are at what you do because you bought it, people. So the banks, their job is to sell you on believing that the FICO score is a measure. How do you get a FICO score? You borrow money so that why? So that you can borrow money. So why? So you can borrow money. Is this a dog chasing its tail or what? It's a dog chasing its tail with NASCAR stickers all over it that look like banks. Just visualize your dog. Put Bank of America, Fifth Third. Put all the bank little stickers on your dog and then teach your dog to chase its tail. Now you've got a FICO score. It's a great representation.

1:41:01Dave Ramsey:That's exactly what's going on right there. So you look like NASCAR. Looks stupid. So don't do this.

1:41:08George Kamel:I had a fun interaction on a Delta flight. The stewardess walked up to me and said, close your ears. And then she did the pitch for the credit card. She recognized me and she went, I'm sorry, George.

1:41:17Dave Ramsey:I have to do this. It's my job. She apologized ahead of time. That's funny. That's funny.

1:41:22George Kamel:I went, la, la, la, la, la. I can't hear you. George standing behind her going, no, don't do it.

1:41:28Dave Ramsey:It's not worth it. Dive on the grenade, George. Dive on the grenade. I'm not a good salesperson for your credit card pitch. But seriously, if we did on the Ramsey Show just a tiny bit as good as they do selling debt about selling the net worth calculator, calculator which is an actual measure of winning because your as your debt goes down and your savings investments and real estate values go up you are winning that's that's the definition of net worth if we get this net worth calculator to be the thing rather than the fico score wow we

1:42:05George Kamel:would have actually done something your net worth is intangible whereas the debt gets you the thing you want right now the net worth takes time to build and the net worth requires that your emotions

1:42:16Dave Ramsey:be mature, the FICO score requires that your emotions be immature. They want you to be impulsive. They want you to be a child, a baby child. I want it. I want it. I deserve it because I work so hard.

1:42:29George Kamel:And they'll tell you that in the marketing. They'll literally say, you work so hard. You deserve it.

1:42:34Dave Ramsey:And we say, you work too hard to be broke. I was at McDonald's. You deserve a break today, right?

1:42:37George Kamel:Oh, that's right.

1:42:38Dave Ramsey:Yeah. That's good marketing. You deserve a Big Mac. Is that all I deserve? Wow. I'm really not doing very well, Lord, if that's all I deserve is a Big Mac. That's a dark future. I think fine dining is what I deserve. You deserve a steak, but settle for a McMuffin. Settle for a McMuffin. Get you a McRib. We're not sure what that rib came out of, but we're just saying it's a rib.

1:43:02George Kamel:Whatever it is, it's not alive anymore. It's all we know.

1:43:05Dave Ramsey:If it ever was. It's a zombie rib. Yeah. So, oh my gosh, guys. So, hey, net worth, net worth, net worth, net worth is how you measure success. And if someone says, well, a million dollars is not enough. It's not. It's not enough for some of the things you want to do. A million dollars will not buy you a jet. Not a good one, anyway. A million dollars will not buy you seven cars. People that have a jet and seven cars are billionaires. They're not millionaires. A billion is a thousand million. if you have$1 ,000 million and you spend$8 million of that on a jet, you're okay. If you have$8 million and you spend$8 million of that on a jet, that was dumb.

1:43:53Dave Ramsey:Okay? So, I mean, this is how the net worth works, right? I mean, you're looking at your ratios and you're going, okay, that makes sense. That's not a million. No one should have a million dollars. A millionaire is a – net worth is a math thing. It's not a moral construct. It's not a spiritual discussion. I can have that argument with you, too, and teach you about capitalism, how it is more intimately moral and ethically moral than any other form of government or economy. But that's not got anything to do with being a millionaire. It's just the byproduct. Millionaire is the byproduct of being free, having liberty to get up, leave the cave, kill something, and drag it home and not have it forcefully taken from you by your government.

1:44:35Dave Ramsey:Oh, wait, they do that. It's called income tax. Thank you.

1:45:12Dave 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.

1:46:04Dave Ramsey:Jennifer is in Philadelphia. Hi, Jennifer. How are you?

1:46:08George Kamel:Hi, I'm great. How are you guys today?

1:46:10Dave Ramsey:Better than we deserve. What's up?

1:46:12George Kamel:Excellent. So I had a question. I'm a bit stuck right now. I am recently divorced. My ex-husband and I, we own a home. It's probably worth at least$300 ,000. We have about$125 ,000 remaining on the mortgage. He's offering to let me stay in the house and split the equity later, but I have some student loan debt and car debt. If I sell and get out of the house, I feel like the equity would wipe out all of my debt and leave me with a decent emergency fund. So I'm just wondering, should I sell the house to get a clean break or try to stay?

1:46:53Dave Ramsey:How old are you?

1:46:54George Kamel:I am 47.

1:46:57Dave Ramsey:Are you kids at home? um one 19 19 years old yes how long were y 'all married we were married um 19 years wow i'm sorry yes it's a hard thing to go through it absolutely is yes

1:47:17George Kamel:what do you make i make so gross pay this next year i'll be making a little over a hundred thousand

1:47:26Dave Ramsey:And you said you're 40 what? 47? 47, yes. Okay. What's the mortgage payment?

1:47:33George Kamel:The mortgage payment right now is 1890. And that's something that I've struggled with.

1:47:41Dave Ramsey:My answer is more emotional than it is mathematical. Uh-huh. And I'm answering this is what would I do if I were in your shoes, okay?

1:47:52George Kamel:Okay.

1:47:53Dave Ramsey:But it's the way I function, so I'm not sure it applies to you. You'll have to decide that, okay? Okay. But for me, I think you make$100 ,000 a year. You're 100 % free if you sell this house. Mm-hmm. 100 % of this heartbreak is in your rearview mirror. You're not walking into the same bedroom anymore. Mm-hmm. You're not walking into the same kitchen anymore. Correct. And you have zero debt and you make$100 ,000 a year. You turn the page and chapter two begins. Okay. I love the cleanliness of that and what that opens up your world as a world of possibilities. your life becomes a new adventure after this tragedy and this heartbreak and whatever whatever words we want to use for the past uh year and a half that you've gone through this or whatever it's taken to get this done and um it's just been hell and to put all of the burning embers of that trash fire that dumpster fire in the rearview mirror for me and i'm making 100k and i'm completely free.

1:49:08Dave Ramsey:I can do whatever I want. I like that more than I like this house.

1:49:16George Kamel:Agreed. That is my thought recently. It would be a great feeling to be debt-free and planning for the future and the next chapter.

1:49:25Dave Ramsey:Yeah. Knowing what I know now, I'm going to turn the page, and chapter two is going to be a chapter of possibilities, not burdened by anchors from the past. Yes. I personally think I get great hope and joy out of that idea.

1:49:44George Kamel:Yes, absolutely. And that is what I need right now. I need some joy and happiness back in my life again.

1:49:50Dave Ramsey:Yeah, it cleanses some of the heartache, and hope replaces some of the rage. And, you know, I, I, you know, anytime you go through a life trashing thing, I mean, I've not been through a divorce, but I've been through a bankruptcy, lost everything. And, you know, and, and what they say about bankruptcy is it's a fresh start. Well, only if you do it right, you know, and only if you clean off everything when you do it. And we did, and we had our fresh start. but man it was uh you know we're standing there in ashes for a fresh start yeah you know and and in a sense a little bit that's what you're doing but you got you know you got a there's a lot of positives in chapter two already freedom adventure sun is out there's a hundred thousand dollar a year income i don't i don't have you didn't tell me you got two two-year-olds to deal with i mean

1:50:47George Kamel:No, no, yes, I'm very close. Yeah, the 19-year-old can figure it out.

1:50:52Dave Ramsey:Well, we're not that far off.

1:50:55George Kamel:Exactly.

1:50:56Dave Ramsey:And not put them in the therapist's office too quickly anyway. Yeah, yes, yes.

1:51:02George Kamel:I'm encouraging him to listen to you and your show. Thank you. And your team so that he makes responsible decisions, especially over the next few years of his life.

1:51:11Dave Ramsey:Yeah. So that he doesn't use this family not turning out like he wanted it to be an excuse to do something dumb financially. That's a good idea on your part. Way to go.

1:51:24George Kamel:So I don't know, George, you got any thoughts on that? Well, I think should you sell the house just to pay off the debt? Probably not. But for the reasons you mentioned, I love. And then the byproduct of that is, man, I get to just get rid of this debt, have an emergency fund, probably for the first time in a long time.

1:51:38Dave Ramsey:And you can rebuild and buy a house pretty quick. And I'd personally rather live in a different house if it's me.

1:51:44George Kamel:Yeah, my guess is if you chose again today, you'd probably choose a different home based on your season of life. I probably would. I'd want a similar style, but maybe just downsize a bit would be perfect.

1:51:56Dave Ramsey:Yeah, yeah.

1:51:56George Kamel:Yeah.

1:51:57Dave Ramsey:I don't know if I was single, if I would live where I live. I never thought about it much, but I guess I would. I don't know. A lot of the reasons we're in there is because of Sharon, so I don't know if I would or not. If Sharon to think. That's the reason we're in that particular neighborhood.

1:52:13George Kamel:Sharon wanted to live in a society, Dave. You wanted to live in the woods.

1:52:16Dave Ramsey:There you go.

1:52:17George Kamel:You know, she won. She won. Her vote mattered a little more on that one.

1:52:20Dave Ramsey:Well, that's how we've been married for 45 years. I told her if she leaves, I'm going with her. So that's how it works. She took that to heart. We're not doing anything else. Yeah, I love that. I think it's, there's a fun thing about having an encore. A guy talked about an encore career. You know, you lose your job in your 40s or 50s. And it was your big thing. And a lot of people end up with their encore career. And think about what an encore is. The curtain goes down. The audience is on their feet cheering. The curtain goes up. You take a bow. The curtain goes down. And then the curtain goes up and you play another set.

1:52:58Dave Ramsey:That's the encore, right? And so that's what this is. It's the turning of a page, chapter two. The curtain has gone up. It's your encore. It's like the old ShamWow commercial. But wait, there's more. You always love that.

1:53:12George Kamel:We always want more.

1:53:14Dave Ramsey:Genzu knives.

1:53:16George Kamel:It's not over.

1:53:18Dave Ramsey:What would America do without infomercials? I love it. QVC went bankrupt.

1:53:23George Kamel:No way. They did. Dave, you should have been supporting them. Probably not.

1:53:29Dave Ramsey:Can't see Dave calling in. Mike Rowe. You know, Mike Rowe's career started on QVC. That's where he was doing. Yeah, that's where he started.

1:53:38George Kamel:That's fantastic.

1:53:38Dave Ramsey:They found out he had a great voice and he entered theater because of his voice. He left QVC and went into theater.

1:53:44George Kamel:What I wouldn't give to have a voice that deep and rich. And a great singer, too. He does like opera. Oh, yeah. Big time. Big time. It's fantastic.

1:53:50Dave Ramsey:Yeah. And he went from theater to dirty jobs. Now figure that one out. He's a Renaissance man. Well, that he is for sure. But interesting. I do love that idea, though. This chapter two thing is a good thing. Well, you can either treat it. Encore life. What's the next thing? and there's just all this freedom and adventure and, you know, I'm going to backpack Europe or something. I mean, I'm not, but. Just kind of eat, pray, and love journey. What is it you want to do? Sisterhood of the traveling pants. What's your thing? Yeah.

1:54:19George Kamel:I love this concept of most people either treat it like a comma or a coma. You get to choose. Are you going to let this be. Is that like a sermon? That sounds like a sermon. I might. Maybe I stole that from a pastor. You might have stole that from Sunday morning sometime. But I just love that idea.

1:54:35Dave Ramsey:That's a great line.

1:54:35George Kamel:Are you going to let this control you, keep you frozen, stuck, or are you going to go, all right, there's a comma. The sentence is not over. Yeah. That thought might be, but there's a continuation here.

1:54:48Dave Ramsey:So I think that's a fresh thought. When we filed bankruptcy, I did have that. I had a period of time where I just sat around and moaned and blamed everybody else. And, you know, that's what you do when you do something stupid. You blame other people, right? And like McDonald's serves hot coffee. Who knew? You know, it's like, you know, I'm going to sue you. You served me hot coffee. Well, you'd serve me if it was cold, you know, because you're that guy. But, yeah, but instead, you know, I sat around and blamed other people for my stupidity. And then I actually went to breakfast with a buddy of mine and I was whining.

1:55:18Dave Ramsey:And he said, you whine a lot. Ouch. He goes, you need to, you got a lot of lemons. You probably ought to make some lemonade and stop the whining. I went, oh, don't you love a good friend? Comma and not a coma. You can use that one, Dave.

1:55:36Thank you.

1:55:53George Kamel:Hey, what's up guys? It's Jade Warshaw. Listen, summer spending adds up so fast between vacations and road trips and camp fees and events and all the extra gas and grocery runs. Money can get tight before you know it. To really get your money under control and keep it that way, you're going to need a plan. And that's what you'll get with the Every Dollar Budget app. It helps you track your spending, free up cash to put toward debt and savings. and it's the simplest way to make a plan for your money before the month begins. So no more wondering where your money's going. You're telling it where to go.

1:56:26George Kamel:Download every dollar in the App Store or Google Play and start for free today.

1:56:37Dave Ramsey:Our scripture of the day, 2 Corinthians 8, 11. Now finish the work so that your eager willingness to do it may be matched by your completion of it according to your means. Marvin Phillips said, the difference between try and triumph is just a little oomph. I like that. The right insurance acts as a shield around your loved ones and your wallet if disaster strikes. Our free insurance coverage checkup helps you figure out if you have the right coverage by giving you a personalized action plan with clear next steps. Go to RamseySolutions.com slash checkup and take the free coverage checkup and find out if you have the protection you need.

1:57:21Dave Ramsey:Danielle is in Toledo. Hi, Danielle. How are you?

1:57:25George Kamel:Great. Thanks for taking my call.

1:57:27Dave Ramsey:Sure. What's up?

1:57:28George Kamel:My question is our youngest child will be going to college in just over two years. So I've been reading about applying for financial aid, filling out the FAFSA, all of that stuff. And I keep coming across suggestions that it is better if the parents, and especially the child, use their cash. And I'm not comfortable with that. We've had our son take the foundations course. We've gone through Financial Peace University. He's been saving up from his church job for college, and that goes against what we've taught him. and we feel he should pay for part of his college, but we also don't want to mess up our chance at financial aid.

1:58:12Dave Ramsey:Well, there's several types of financial aid. There's scholarships, obviously, that are not based on financial need. They're based on academics, citizenship, other things, and we always suggest you go and get as many of those as you can, and there's billions of dollars of those out there floating around, literally. Then we also, you know, there are grants that have to do with specific situations, nuances, demographics of your life or whatever. And grants are fine. There's nothing wrong with those. Financial aid that is needs-based, like a Pell Grant, is for poor people. and when a website or a person suggests that you spend all your money in order to qualify for welfare um that's like saying quit your job so you can get welfare no that we're not doing that like you like you said that runs against what you believe and we're not doing that so that's what that that's the spirit in which these people are you know but financial aid is not all income or asset based.

1:59:24Dave Ramsey:But that that that is that is for poor people. And if you're not poor people, then don't spend your money or hide your money and act like you're poor people. So don't do that, you know, and and then that solves your problem. So what I would tell you to do is to begin to look at the cost of a particular college versus another college. that is a bigger difference number than anything you're going to find in FAFSA. Okay. And FAFSA really is a funnel to get people on student loan debt is mainly what it does.

1:59:59George Kamel:That won't be allowed. There will be no student loans.

2:00:01Dave Ramsey:Yeah, good. And if you qualify for a certain type of scholarship or grant, fine, take it. There's nothing wrong with that. But you're probably, you know, based on what you're telling me, you're probably not going to qualify for Pell Grants. Yeah.

2:00:17George Kamel:I mean, it's interesting to see the actual formula. I was looking it up. Your parent income is the biggest factor. So spending down all of your savings and cash is a very small portion of this. For Pell Grant? For the FAFSA formula. The Student Aid Index is what they call it. It's what they use for the formula. The parent assets is only 5.64%. So$10 ,000 in savings is only going to add$500 to the parent's portion that is counted toward FAFSA. The student portion, the assets, flat 20%. So if he has$10 ,000, he has saved up$2 ,000 would be factored into the student aid index. So it's not as big of a deal as people think, and income matters far more.

2:00:55Dave Ramsey:The truth is that we don't find people hardly ever that get through college using FAFSA. Unless they use student loans. Yeah. Now, you know, so FAFSA is really not the ticket. School choice. School choice is the ticket. Working while you're in school is the ticket. Applying for scholarships. And looking for scholarships is the ticket. Those are the three things. And we find people doing all three of those all the time. I mean, we had Christina Ellis that was with us for years here, is world-renowned on getting scholarships. She wrote a book called How I Got a Half a Million Dollars in Scholarships.

2:01:29Dave Ramsey:she ended up going to Vanderbilt and getting her MBA paid for in full and all of her undergrad too and she was the daughter of a single mom who had no money and so you know but it wasn't FAFSA she went and she made it her job in her junior and senior year of college of high school to apply for scholarships her mother made it her job she wrote so many essays her fingers bled you know kind of thing but she got a half a million dollars worth hello that means free college anywhere you want to go and so uh and it's the book was a bestseller and she's still out there and she's wonderful if you can find her information anywhere um so yeah that but that concept is there and that's what i would lean on and then i would lean on school choice and what mom and dad can contribute and so on but i wouldn't i wouldn't burn a lot of my brain calories trying to manipulate

2:02:26George Kamel:the fafsa formula is the moral of this story yeah not worth it you're better off taking that time

2:02:31Dave Ramsey:to just save up and pay cash and for sure don't you know don't spin down oh god man people are so that's a you know what this is it's the it's the quintessential discussion between a scarcity mindset or an abundance mindset. A scarcity mindset says the government will have to take care of me because the little man can't get ahead. So therefore, why try? Therefore, I'm stuck or spend it down or move all your money out of your name so that you go into a Medicaid nursing home and that way the nursing home doesn't steal your money as if they stole your money. They provided a service. They don't steal money.

2:03:13Dave Ramsey:They provided a service. They took care of you old people. That's what they were doing. And, you know, but they stole, they took all the nursing home. The nursing home got paid. You go to a restaurant, you pay them for the food. You go to the car dealer, you pay them for a car. You go to the nursing home, they stole all my money. See, that's a scarcity mentality. Now, go for an abundance mentality and go on, I'm going to stack cash and scholarships and a good, inexpensive school and study something because knowledge is the key, not degrees and not where you graduated from. Your knowledge is what moves you forward.

2:03:53Dave Ramsey:Your degree is freaking worthless. And the only thing more worthless than your degree is where you went to school. That's so laughable. It's so stupid. I can't believe it. so choosing a school where you get quality knowledge to use in the marketplace and and paying a reasonable fee for that and and your kid works while they're in school and and let me tell you what working while you're in college is not child abuse most of us worked while we were in college shut up you entitled brat you're gonna work while you're in college we don't have any money we're broke and we're not going to take out welfare you're going to work that's how this is going to be we're going to go to school well my friends are i don't give a crap what your friends my girlfriend i don't really don't care what your girlfriend's doing because she won't even be your girlfriend by the time you get there george knows about this yeah that breakup is impending i tell you from personal experience this is how a boy from boston ends up in southern in Mississippi.

2:05:01Dave Ramsey:Yeah. That hurt. Dave doesn't even know where I got my degree from. If you tell you that's how little he cares. I missed it. I missed it. Exactly. No, I got it. I got it the other day. We were telling the story the other day. That's why I remembered it. Good. But it really, it's not a factory thing. Danielle, that's a great question. Thank you for calling in with that. And thank you for being a good mom and thinking this through and get that senior front and center on all this decision making where they're emotionally bought into what they're going to have to do to get through school. 54 % of the people that start college finish.

2:05:27Dave Ramsey:finish wow that means colleges are failures if you get a 54 on a test they give you an f 54 of you that start college finish ever so then think about the ones that took the last thing you want is an almost degree that's a really bad degree the almost degree that's a really bad one because you got all the student loan debt to go with it so and an interesting thing people who pay for their school and their parents are paying for their school have a higher degree of completion. You know why? Skin in the game, baby. Skin in the game. That puts us our The Ramsey Show in the books. We'll be back with you before you know it.

2:06:10Dave Ramsey: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.

2:06:25Thank you.