Slow and Steady Beats Get Rich Quick

21:47George Kamel:All right, heavy question, but we have to wrestle with it. If you died tomorrow, how would your family keep the lights on? How would they pay the mortgage? Could they afford necessities, basic necessities like groceries? If anybody in your life depends on your income, you need life insurance. So if that's you and you're going, okay, we need to do something here. How do I figure out all the options? It's really simple. Life insurance has one responsibility, to replace your income if you die. And term life insurance is the only kind of insurance that does that. The others like whole or permanent life insurance try to add in investing, and that's a really bad product that doesn't do what it's supposed to do.

22:26George Kamel:You only need life insurance while someone depends on you financially. So if you're like most people, you need a policy worth 10 to 12 times your annual income for a term length of 15 to 20 years, and it should be a level policy, meaning the premium stays the same. For more info and resources on this very important issue, use our free term life insurance guide. Go to RamseySolutions.com slash term life guide. That's RamseySolutions.com slash Term Life Guide. Or you can get the link in the description of the show notes if you're on YouTube or podcast. Lisa joins us now in Ohio. Lisa, how can we help?

23:03Hi. We recently sold our home after experiencing some financial difficulties and medical setbacks. And we're just looking for the best way to kind of move forward. We have three teenagers. They're very involved in extracurricular activities, some medical issues. We just kind of want to move forward. We want them to have a normal childhood. So, yeah, just kind of looking for the best way for us to move forward.

23:32George Kamel:Okay. So we need to paint a clearer picture for us here. So when we're tackling debt, we've got two things that we have to do just at the top, right? We have to decrease expenses wherever, however. And then we also need to increase income. So give us a picture of the debt. But before you do that, give us a quick household income. What is our take-home pay? We're about, I would say, about$11 ,000 a month. $11 ,000 a month. That's good income. Very good. And is this double income? Yes. Okay. Double income. Okay, now walk us through the debt. Smallest to largest. Sure. So we're looking at about, I would say we have$60 ,000 in cars.

24:23We've got three cars, my 17-year-old and then the two of us.

24:29George Kamel:That's it? That's the total debt? It's just the cars? No, no. Okay, so I want you to walk me through smallest to largest, because that's what we teach in the debt snowball is to attack the smallest debt. So walk us through that. Sure. So$20 ,000 in credit cards. And then we have, I would say, our medical debt. We're looking at, I don't know, about$9 ,000. And then we just keep having these medical costs pop up periodically. We'll kind of be making some good headway. And then my son has an anaphylactic food allergy, so he'll wind up in the hospital. We'll all have scans. Are you using the credit cards to help supplement the medical costs?

25:18Well, so my kids were still in daycare when I had cancer. So we had I had to keep them in daycare. I wasn't able to care for them during the day. So a lot of that is still left over from.

25:31George Kamel:And by the way, we're not judging you. We're just trying to figure out how we're. So let's keep going. Is nine thousand in medical debt? Is that is that the smallest debt you have? Um, yeah. Yeah. Okay. What's next? I was chipping away at, um, we have 30, oh, sorry. We have 13 ,000 in a student loan. 13k. So 9k medical, 13k student loans, 20 ,000 in credit cards. That's multiple cards. So what's the smallest credit card amount? Um, 500. Okay. All right. You see where I'm trying to drive you to this? I'm going to get, I'm going to get George here, but any other debt outside the, the 60 ,000 in cars.

26:11George Kamel:We had three cars. What are the cars? Give me the three car amounts. About 25, 25 and 10. Okay. Are you underwater in all three of these or any of these have any equity? Just in the one we're underwater. Which one? Mine. 25? One of the 25, yeah. Okay. Any other debt? um no i mean our kids are in um our kids are in activities which those are costing about oh let's say eight thousand a year okay that's on the chopping block all right i'm bringing in dr camel here he's got his lab coat on stethoscope he's got his scalpel mostly scalpel just as he's mostly what we need his scalpel is ready to go all right george walk her through this well Well, now, while the medical issues, that is something that is out of your control.

27:04George Kamel:I'm so sorry that I hope you're doing better than you were. Are you currently in remission or what's the status of the cancer? I am. Yeah. It's just those darn scans we have to have. And have you done the math, you know, the ins and outs of your insurance? Because I would know that like the back of my hand. How much am I going to pay? What's the deductible? What's the out-of-pocket max? They didn't cover my chemo. So that kind of kicked our butts. Do you have a high deductible plan or is it? No, we're about$900 a month in insurance. And then our out of pocket max is$7 ,500 a year. Okay. So now we kind of know, here's how much this is going to cost us out of pocket max.

27:47George Kamel:And do you guys have nothing in savings right now? So from the sale of our house, we have$18 ,000. So we had to pay out, like we paid a chunk of that medical debt off. What's the rest of the$18 ,000 doing right now? What's the goal with that money? I have it in a high-yield savings account. I just feel, we had like$50 ,000 equity in our house. And so my goal, I just wanted to like pay ourselves back for that and get back into a house eventually. But I just, I don't know, is that like the best thing to do? I don't know. We're paying$2 ,600 in rent. That feels like I'm just flushing it down the toilet.

28:22George Kamel:Well, what's being flushed on the toilet is$102 ,000 in consumer debt with varying interest rates. That's what's crushing you. That's fair. Not right. So the other part of this is we've been living high in the hog, taking out car payments for every single car we want. And that's the part where I go, all right, these cars could be offloaded to clear over half the debt. Oh, yeah. Not to mention a massive race. Just give us real quick, what do you think the car payments are for all three of those cars? Do you know off the top of your head? Oh, I do know. No, it would be, I would say it's probably about$1 ,200.

28:53My heart said$1 ,200 there.

28:55George Kamel:Ding, ding, ding. Imagine a$1 ,200 a month raise. Now you can make progress on that credit card debt and you can get ahead of the medical stuff. So that's my goal for you guys. $1 ,200. You're bringing home$132K a year, which is awesome. My guess is your expenses are right up there too. Because whatever the kids want to do, I want to give them a great childhood. Yeah, what are the$8 ,000 in kids' activities a year? Yeah, so sports. I mean, my son's a golfer. My other son plays football, baseball, basketball. My daughter is in dance and tumbling and cheer. Okay. Are they going to do any of these professionally?

29:34My son is a senior this year. He's the golfer. Like, is he like scholarship level? I mean, I don't know. I don't know that college is. He's kind of thinking more about trades.

29:46George Kamel:Well, the answer is no. Perfect. Because if he was, you had already known. Here will be my take. Are they 16, 17, 18? 17, 13, and 11. Okay. I would have a 17-year-old start working, and they're going to start funding their own extracurriculars. He has two jobs. But it's still costing you$8 ,000 a year to cover some of his stuff? Well, he has been up to this point, I would say about$2 ,000 of it with golf. So, yeah, I mean, he's right on the tail end of us covering that. Listen, part of this thing, and you said something that was very interesting at this top of the call. You said, we want our kids to live a normal life.

30:24George Kamel:And I get it. I completely get it. There's no judgment coming from me. However, your daughter's in three major things. And one's enough. And there might be a season where she can't do any of it, where she learns this is why. And it maybe keeps her from getting into debt. Like, you guys are going to have to make some changes. And you have to throw the kids' activities on the block. You have to. And then you're putting skin in the game too. You're saying, hey, mommy's got to sell her car and we're going to have to cut you down to one activity because we need to clean up a mess that your dad and I made over the past several years.

30:56George Kamel:And we know that health issues are going to continue in our family. We need to get ahead of this. And that takes priority over these other activities. So you'll get back to it. But the next two to three years, you're going to be just chunking 30 plus grand a year of this debt to clean it up. That's what it's going to take. That's the math behind it. And I believe you can do it if you offload the cars, get the expenses down. Now we can breathe. We've got that margin to attack it. Then just me, I would never pay a nickel for tumbling. Tumbling?

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32:36George Kamel:Hey, how you doing with staying on track with the baby steps? You can take a quick quiz to check your progress and then get a personalized plan just for you. Head to the show notes, James Child's favorite place, Treasures Trove of Goodness over there. Click on the link titled, Are You On Track With The Baby Steps? And complete the quiz. Great way. Let me tell you something about winning. I don't care whether you're trying to lose weight, whether you're trying to accumulate wealth, whether you're trying to grow in a relationship. I don't care what it is. knowing where you stand and having a constant reminder of where's my progress is the key to sustaining growth.

33:14George Kamel:We humans need progress. And when we get stuck, if we don't realize where we are in that gap between where we are, where we want to be, it can really slow us down. So that quiz is a fabulous little tool. Brett is up in Maine. Brett, how can we help today? Yes, I'm 100 % disabled vet. I have several benefits. The housing market is crazy. I am trying to figure out should I stick to the 27 % of my income for the payment and zero down on a 15-year, or can I move to a 30-year since I have a fixed income? Well, first we want to say thank you for your service. You're a great American. Yeah, that's some serious sacrifice, man.

34:07George Kamel:How are you doing? Getting better every day, but a great job. Good, good. Well, because of your disability rating, the funding fee on that VA loan would be waived, which is great news. Because VA loans can seem like a great deal, but then you realize they're also riddled with their own issues. And the property requirements are also strict. Interest can be higher. And so I would tread with caution. And the biggest thing I would caution you against is going in with zero down. So that makes me ask another question. What's the state of your financial world right now? I am three to six months from completing step two.

34:47I have a fully funded – well, I have the step one completed and put away.

34:53George Kamel:Good. I expect another one to two months to fully fund a three to six month. emergency fund, and then after that go into 3B if I should still accumulate a 10 % to 20 % down payment. Okay, so you were speaking out of order for the baby steps. You have six months to go to get out of consumer debt. Correct. Then it's going to take you another three months or so to stack up six months of expenses? Correct. Okay, then that puts you at a year from now we'll be in baby step 3B saving up for a down payment. Correct? Okay. How much money, once you're out of debt and you have the emergency fund, how much money could you save up in that, let's say in a year, if you had no debt?

35:44$2 ,000 times 12, that's$24 ,000.

35:48George Kamel:Okay. So you could save up$24 ,000. And what kind of house would you be looking at? Have you started looking at the price range in your area? $150 ,000 to$215 ,000. house. Okay. So my goal for you is to be, can we put down 10, 15, 20 % on this house? And if that VA loan is the best choice financially based on the rates and the fees and all that, I'm totally fine with you doing that because that funding fee is waived, but I still would stick with a 15 year and work to pay it off as aggressively as possible. Because here's what we found. People who take out a 30-year loan tend to pay it closer to 30 years and they do 15 or closer to 10.

36:27George Kamel:People who take out 15-year loans tend to pay it off in 10 or if you're the average baby stepper, seven years. And so there's a forced savings plan you have there when you get that 15-year and worst case, it's done in 15 years. How old are you? I'm 27. Amazing. Young guy, a lot of life ahead of you. And that means this house searching is on pause because we have a year to or even saving up the down payment, another year, maybe year and a half of stacking up the down payment, then we can begin the hunt.

37:02George Kamel:So here's what that means. Before you're 30, you're going to have equity in that home and be in a place that it's really peaceful instead of going, hey, this is now way too much of my take-home pay is being eaten up by this mortgage. And then you're going to pay it off before you're probably 40. Now that's a game plan for some wealth building right there. Love that. Again, And thanks for the call, Brett. And glad to see that you're on your way up and hanging there, cheering for you. Hold the line, do exactly what George said. And this is going to turn out to be a great, great situation for you.

37:33George Kamel:Annie is joining us now in Iowa. Annie, how can we help? Hi. So I have kind of an investing saving question. So me and my husband are both investing 15 % of our income. We're set to pay off our house next year. I'm wondering, yeah, very exciting. I'm wondering with the access, we're kind of wanting to start saving for a future house and upgrade that one in cash. Love it. We had a meeting with our financial advisor and he suggested putting it in a Roth IRA so that we get tax free growth versus I had kind of planned on putting that in a brokerage account. And I don't think they're lying with... They're wanting you to pull out the contributions tax-free?

38:20George Kamel:Is that what they're saying with the Roth IRA? Correct. Go ahead and max out the Roth IRA. And then five years down the road, when we want to step up in-house, just pull out the contributions. I would personally just use a non-retirement account if you're going to use it for non-retirement purposes. I like to keep things real clean. So a Roth IRA is my retirement account. A brokerage account is used for things before I retire. And so you will have capital gains on that. And depending on your income and how long you hold those investments, it'll likely be 15 % is what you'll pay only on the growth.

39:00George Kamel:So if you throw in$100 ,000, it grows to$150 ,000. You'll pay 15 % of$50 ,000 in taxes. And the other thing is how long is this going to happen? Is this like a five-year goal to upgrade in house and cash, or is it two years? I would say it's five years, yeah. Okay. If it's five-plus years out, investing that money's fine. If it's anything less than that, I start to get a little cautious and go, probably better to park it in a high-yield savings account to keep things more liquid. Because you don't want to get there and go, oh, the market took a negative 24 % dip this year. There goes our house fund.

39:37George Kamel:So the longer it stays in there, the better chance you have of that money growing. And this is going to be a long-term plan, right? Yes. How many years are you thinking? I would say five years at the soonest, maybe 10 years. Love it. It just depends kind of on our situation in that time. We're not in a rush to move out, but we do want to know that we want to pay cash for our next house. Love that. How old are you guys? 26. Oh, my gosh. Any kids? No, not yet. Oh, see. So we'll have the house cut off from five and a half years. So we beat the average a little bit. Annie, that's what I was wanting to know.

40:13George Kamel:Can I just say you are going to be in like a rare air for a young couple. I love this story. They're already thinking, but she's being patient about it. What caused all of this? Because most people go, why would you pay down your house? You're 26. You got a low rate. Just ride it out. Invest the difference. Yeah. Where's this patience come from for this young couple? What's going on, Annie? I've been a big fan of the show. My parents obviously have raised me on Dave Ramsey, so that's been a big part of it. What's your household income? About 180. Good heavenly days. You guys are going to be rich.

40:52George Kamel:What's your mortgage payment? The principal and interest portion. Yeah, about$1 ,300. So you're going to free up that amount, plus all the margin you have being debt-free, which means you're going to stack up. about, yeah,$4 ,000 extra a month that we'll start probably stacking up. $50 ,000 a year, saved up for five years, invested. Yes. You're going to have a couple hundred,$300 ,000,$400 ,000. That's a nice house in Iowa, huh? Yep. On top of the equity you have in your current home, which once it's paid off, will be how much? About probably$220 ,000. Awesome. Depending in five years what the market is like.

41:27George Kamel:But yeah. I mean, my goodness. So excited for you. The title company, they're all going to be like, what, you're pink? Yeah, they're going to think you guys are punking them. Like 30 years old, buying a house in cash? Yeah, they're not prepared for it. So, so happy for you. What great piece you guys are setting yourself up for, Annie. We're just applauding you. Thanks for sharing the details. Because I think you've modeled the way for a lot of young people that are listening right now. So, fantastic job. Thank you so much. These are luxurious questions you can ask when you follow the Ramsey plan to a T.

41:57George Kamel:I'm telling you. So proud of her. Yeah, really good stuff. Folks. This young generation, they're fine. They're going to be okay. The good ones are going to be fine. That's right.

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43:42George Kamel:Welcome back to the Ramsey Show in the Fairwinds Credit Union studio. Alongside George Camel, I'm Ken Coleman. So excited that you're with us. David is up in Florida. David, how can we help? Yes, I was calling to see. I lost my job about a month ago. And we have a few months left to go until money runs out. And I'm just wondering, when should I start considering selling my house? Now, when you say the money runs out, runs out of where? Well, we have a couple months of savings and also a severance package from my employer. Are you using the savings now or are you able to live off the severance?

44:23George Kamel:So far, just the severance so far. How much do you have in savings? About$20 ,000. Okay. What were you making? What was your income, your take-home before being let go? Base salary was$105 ,000 plus bonuses. Okay. Are you doing – what kind of work were you in? I was head of marketing for an e-commerce company. Okay. Okay. I'm assuming that you're aggressively, you've got recruiters helping you, kind of that background, what you've done seems like you're probably... I haven't. No? I haven't connected with any recruiters. I've been applying for jobs diligently. I think today I applied for about 20.

45:04And I also have been reaching out to local businesses to see if they need any help with their marketing. Okay. Maybe see if I can get freelancing or something.

45:11George Kamel:Great. I would keep doing that, but I would absolutely at this stage, because you were at a director level, high level, I would get a recruiter involved because, again, they don't win unless they get you something. So I would add that to the strategy here. Okay. But the other thing that I would tell you, and again, I'm giving you advice on what I would do if I were in your shoes. And what I would do is while I'm prospecting and hustling and connecting, I do not want to touch that emergency fund. That's just me. And so while I've got the severance that's paying the bills, and you may be doing this, are you working even just side jobs right now to bring in some money to supplement the severance so that we're stacking some cash?

45:57I haven't, like, applied for any, like, entry-level positions or anything yet.

46:01George Kamel:I'm just telling you. I'm open to working. Yeah, definitely. But I haven't applied to anything. Well, I would. And my point is, you know, whether this is I'm working at a Walmart or I found a manufacturing job where it doesn't, you know. DoorDash, Instacart, Uber, Lyft, whatever it is. I'm going, where can I make a minimum of$20 to$25 an hour? Because this is just a bridge. But you want to slow down the burn rate. That's the goal here while getting that job. Is this the only income in the family? Are you single, married? No, my wife, she works as well. Okay, what is she making? She makes a little over$80 a year.

46:43George Kamel:Okay, so can you guys live off the$80 and not touch this?

46:50George Kamel:Not really, no. And what's that due to? Do you guys have a big mortgage? Well, we do have quite a bit of bills. Our mortgage is about$2 ,500. Well, if you include property taxes and insurance, about$2 ,500. Okay. And then do you guys have any debt outside of the mortgage? Our cars will be paid off like March of next year. Dude, I'm offloading these cars before I burn through my savings. What are the cars worth? They're worth roughly probably about$15 a piece,$15 a piece. What do you owe on them? $3 and$5. What are the payments? About$800 a month. Yeah. Why not take eight grand from your savings, pay off the cars?

47:39George Kamel:That frees up actual money in your budget every month. Yes. I'd actually sell the cars. Would I do that earlier or would I do, okay, sell versus? I'd sell one at least, you know. Because you have to turn around and go buy something is the issue. Oh, I know. But still, instead of using that, I mean, yeah, I'm with you, George. You'll still have 12K in savings. Yeah. You still have severance. You'll free up 800 bucks a month. my goal would be have you guys ever made a budget together just sat down and said hey here's okay so i would go through that very judiciously tonight and say what can we cut from this to live on a very bare bones emergency style budget which means no eating out whatsoever we are only covering covering the four walls housing utilities insurance food keeping food on the table that's the major things.

48:29George Kamel:Outside of that, there's really nothing else you need right now, correct? Correct. Okay. And until you get a stable income, until you get back up to making, you know, 200 as a household, we got to live like we make 80 grand a year. That's right. Right. And you can see we didn't immediately go to you selling the house. That's what you proposed. But let's walk through the numbers. That's the scariest part to me because I don't know where, at what point do I decide? And I I know right now it's kind of taking time for people's hours. Well, I mean, you guys bring home still four to five grand a month.

49:01George Kamel:What is she taking home? She brings about, say that again? Is she bringing home four grand a month? About five to six. And then I also have a retirement from the military. And that's what I'm saying. You guys can't figure out how to live on seven grand a month right now? That's the scary part. We were living – we had about$20 ,000 or more that we didn't – well, actually, there was more that we didn't need. But we had budgeted in like Christmas and vacations and stuff so we can cut everything out. We could probably cut back about$30 ,000. That's what I'm saying. See, you don't need to sell the house.

49:40George Kamel:See, the house stays there. Don't touch it. You don't want to mess with that. That can't be your fallback. And quite frankly, I think what George has figured out is it doesn't need to be your fallback. This isn't – we don't use the house and then throw the family into disarray. unless it's the only option. And I don't think this is, I mean, while you're finding something between your military, let's run these numbers again for you, just real quick. You're bringing in how much a month on the military benefit? $1 ,200. $1 ,200. And then your wife's bringing six? Yes, sir. So that's$7 ,200. $7 ,200.

50:13George Kamel:A mortgage is$2 ,500 of that. So why do you need an extra$5 ,000 a month? Where is this money going? Well, there is – I did set up like the envelope plan where a lot of money gets set aside for like birthdays and Christmas and stuff like that. So there's all this money that moves over for like saving for – Okay, but I'm talking$60 ,000 a year that we need to account for here. That's$5 ,000 a month. So that's the part where I go, I think we've been a little lackadaisical. We've got a little comfortable, and I need to feel some fire under your butt to go, dude, we need to do something now. We got this debt we need to clean up.

50:49George Kamel:I don't have a job right now. our lifestyle just got cut over 60 percent because of this income hit so everything we were doing before is off the table right now we'll get back to there once you're making 120 grand a year again we can reinstate the sinking funds and the vacation funds and all that but right now we're not doing any investing we're not doing any spending all we're doing is trying to keep food on the table keep the mortgage paid keep the lights on and and george is right by the way uh i'm fully in board with george i would i would pay off the two cars today like as soon as you hang up.

51:20George Kamel:And the reason is because you just gave yourself another 800 to the equation we just ran, which means we're now at 8 ,000 a month. Okay. I pulled up my budget. Our bills are about 6 ,000 a month, not including food and stuff like that. Why doesn't that include food? Well, the way I set the budget up is more like these are non-negotiable kind of like bills that are the same every single month. I don't believe you have$3 ,500 of non-negotiable bills outside the mortgage. I would do an audit with your wife tonight and you both go, can we live without this for a season? For three months? Can we scale down Christmas to a, you know, white elephant secret Santa swap?

52:01George Kamel:The answer is yes. This will be a very popular segment, I think, on your YouTube channel. I'm going to suggest it. Just slashing the budget. No, a house call from Dr. Camel. It's all Zoom. And you just sit there and you go through. Because I think you could literally in five minutes... Do I get a stethoscope? I'd give you one. Alright, I'm in. We'll be right back.

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54:15George Kamel:All right, Noelle is joining us in Oregon. Noelle, how can we help today? Hi, guys. I'm such a huge fan of the show. Oh, thank you. Basically, yeah, of course. I've been watching you guys for years now. So basically, I'm 25 years old, and I almost make$90 ,000 a year. Wow. I'm currently... What are you doing? Yeah, I'm doing digital marketing. Good for you, Noelle. Way to go. Thank you so much. And I'm currently working on my MBA program, and I've been dating my boyfriend for almost two years now. And when we first met, he was making a similar salary to me. But since a couple of months ago, he was let go from his job, and now he's been unemployed for going on three months now.

55:06We currently live together, and my concern is with all of our combined student loan debt, car debt, and consumer debt, I'm a little bit worried if he doesn't find a job. Should we continue living together? Do we start splitting everything 50-50? Do I dip into my savings to help? Hold on a second. All right, hold on, hold on.

55:28George Kamel:Okay. I got to stop you here. Should we start splitting things 50-50? What does that mean? What have you been doing? That's what I want to know. So basically when we decided to start living together, he said that he will cover the rent, which is about$1 ,300 a month, and I would pay for groceries and our utilities. And then everything else we pretty much take care of independently. Okay. And now he can't afford it because he's the broke roommate. And so you're going, I guess we need to split. Should I cover? Who's been? Well, wait a second. He's been out of work for three months. Did he have a severance?

56:09He got his PTO pay, but I think that's now gone.

56:14George Kamel:Who's been paying the rent for the last three months? So he paid the rent last month, and then I paid the rent this month. And yeah. All right. So now here's what's interesting to me. So you called us, and we're so thrilled you did. I mean, couldn't be any happier because this is serious stuff. But the fact that you called us and the way you've set this question up, you're like, it leads me to believe that there's been some conversations maybe, or he has made some statements, or there's a pattern of the way he's handling this that's got you going, uh -oh, there are red flags swirling. So what is it that makes you call and ask this question of, should this mean that I put the brakes on sharing all this kind of stuff and not think about this dude as marriage potential?

57:04George Kamel:What's happened? Well, I think what's happening right now is that he has been interviewing for places, but nobody seems to be hiring. And he doesn't really want to take a lower paying job or like two part time jobs in the meantime. And I'm just concerned about how what jobs he's willing to take versus not and being potentially too picky in this environment where it seems like nobody's hiring. Well, that's true. So just a quick for the rest of our audience and for you, the job market is very soft right now. Unemployment is eking up. This is this is a real thing. So the job market is very, very soft.

57:47George Kamel:So what that means is, is that it does take longer to get hired because companies aren't hiring as quickly, because quite frankly, the economic uncertainty with tariffs and everything else, a lot of companies are holding and in a holding pattern. So that's real. But what is also real is, is this young man, for his own mental and emotional health, needs to be doing something. And I get the temptation to go, well, I don't want to go backwards. But yeah, this should concern you. And yes, I would not be thinking about anything in this relationship. I'll just play your dad for a second, because I'm probably old enough to be your dad.

58:26George Kamel:But yeah, I would not be thinking about long term with this young man until we see how he handles this storm. This is a real storm. Let me say this on his behalf so I don't sound like the angry boomer dad. I'm an exer, by the way. We know from research that losing a job has the same emotional impact as losing a loved one. So I do have a lot of empathy for him. And I want you to have that empathy and understanding that he's three months into having his world rocked. And so I do have some sympathy there as well as empathy. But to your question, and I want George to jump in here, I absolutely think today is the day.

59:09George Kamel:We should have been separate. I mean, I would have never told you to live with the guy, but you are. No judgment. I'm just telling you, I wouldn't have told you to do it. but I would be separating everything. What is yours is yours. What's his is his. And you guys split everything down the middle. And unfortunately, you're romantic roommates. But that's where it ought to be, George. Yeah, I think this is not a punishment to him of you. I'm moving out because you don't have a job. I think you go, hey, this was a mistake. And it's just this is making it more and more clear. And it just makes it a weird relationship now.

59:45George Kamel:Because now you're like, well, does he get kicked out and he has to go find his own place? Because that might be... Here's the thing. I would have more onus if I needed to cover rent that month. I'm going to be doing Instacart that night. But because he has you to float him, I think that's creating a sense of kind of comfort and complacency in his life. And yes, it should scare you, by the way, as he's a future mate, potentially. I'm going to tell you something right now. And Stacey knows this. If I lost my job, there is no sitting around for three months. Nothing. I'm working. I'm busting it.

1:00:18George Kamel:And so, yeah, you ought to be concerned by that. Because while I acknowledge that it is an emotional blow, I'm also saying that life sucks sometimes. It hurts. And we don't just sit at home. So imagine you with two littles. And if this happens to this guy. So, yeah, this ought to scare the crap out of you. Yeah. Yeah, and I feel like, too, when I talk to him about it, But my mindset is like, if I want a job by this date, I'm having it. I don't care what it is or how much it pays. I'm just going to go get it. Love it. And I just feel like he's waiting for the perfect job. And I don't know. Yeah.

1:00:57George Kamel:Yeah. So, hey, Noel, I'm not telling you what to do in this relationship, but I'm telling you to press pause on the relationship. Meaning you're not thinking about what this looks like in the future until we see how this dude steps up. And by the way, George, do you have any problem with her telling him that? I don't, but I tend to be a little bit more black and white, you know, like just lay it out there. Well, I can tell she's very professional with her language and her words. And so this is, it's going to feel like an awkward conversation because it is. It's going to be uncomfortable. And how he reacts is not up to you.

1:01:29George Kamel:So that's the tough part. And it sounds like he's going to be probably deflecting, making excuses, probably going to get upset and defensive. And again, that's very telling. Yeah. When's the lease up? April. Yeah. That's a long ways away. That's a long ways away. Because I was like, if this thing went around the corner, I would just tell you, hey, you know what? Let's redefine the relationship. I'm willing to stay in the relationship, but I'm not going to live with you. I'm concerned about how you're handling this. I think you need to say, I need to go find a roommate who was able to pay their share of the bills.

1:01:58George Kamel:Well, that's 100 % the case. And I would choose a female friend at that point. And I would not move in with anyone else until marriage. Now it's a sitcom. Three's Company. You don't even remember that show. Oh, I do. Do you remember that? Three's Company, too. There we go. But, Noelle, seriously, you've got to take care of your finances, right? Because your name's on the lease. Yeah. And my fear is you go, well, I guess I'll cover it this month. Don't cover it. And then month. I go get a roommate. That's kind of a real – by the way, that's not passive-aggressive. That's a legitimate move that's protecting your finances.

1:02:28George Kamel:And if Sparky doesn't like it, tough. Yeah. I just don't know if I should just wait and see or if I need to start – No, you shouldn't wait and see. No, you've already got an instinct that this dude is showing a lack of character. I'll say it so you don't have to. That's why you called us. Yeah. And I'm telling you, sweetheart, I'm begging you as your fake podcast dad, your instincts are right. Your instincts are completely right. I can tell by your tone you are not being cruel and out of control and overreacting. No, you are not dramatic, Noelle. You are sharp. You've got your act together. And by the way, you deserve a guy, whether you're living with him or not, who's like, man, Noelle's worth this.

1:03:16George Kamel:100%. I'm not going to sit around and play video games and let her pay the rent while I'm eating ramen noodles. And the research bears this out. Professor Scott Galloway says what women are looking for is a man's ability to provide future resources. And so this is a signal, and you should be paying attention to it. Don't wait, Noelle. Put the pressure on this young guy. If he can't handle it. Listen to your fake podcast ad. I've never said that before. So much wisdom. Take it from your fake podcast dad. You're worth more, Noel. You're worth way more. And you got to take care of you. I get to be fake podcast uncle.

1:03:47George Kamel:Calling it. I was going to say brother.

1:04:01Thank you.

1:04:31George Kamel:is different. They work with borrowers in tough spots without judgment. Check them out at yrefy.com slash Ramsey. That's the letter Y-R-E-F-Y dot com slash Ramsey. It's not available in all states. Today's question comes from Hudson in New Mexico. My parents are in their early 70s, and they think their money will run out in the next several years. They want me to sell my condo and buy a bigger home with an in-law suite that they can live in. They will contribute$225 ,000 toward the purchase of the new place. Additionally, there is a life insurance policy that will leave me and my mom$450 ,000 when my dad passes away.

1:05:10George Kamel:The problem is that my wife does not want to live under the same roof as my parents, as they do not get along. If my wife drives my parents away, I will end up with nothing from the insurance policy as they will cash it in instead to use it for their living expenses. What do I do? Oh my gosh. First of all, this is framed terribly. He's created an impossible choice. Do I choose my wife or my parents? That's the real question here. Oh, boy. It's a non-issue. You got to go with the wife. But it doesn't have to be all or nothing on this, George. Am I right? Well, now there's a price tag on the parent's relationship.

1:05:48George Kamel:He's going, hey, I'm losing out on half a million if I go with my wife's side. He can tell the parents, hey, you're not living with us. Yeah, I don't think your quality of life is going to be great if you do this. number one for your marriage, but number two, just for your own independence. My confusion is they're in their early seventies. They can use that 225 grand to go get their own place. Yeah. And if they can't afford that, they can use that towards rent for the next several years. Such a false choice. I would not combine my financial life. I've only seen it go poorly and it gets very messy financially when you go, well, this house is partially ours because we put in this portion and we want to do this renovation and we want it this way, I think it's going to create an even more rift in your marriage.

1:06:30George Kamel:So for those reasons, I'm out and I would leave the half a million on the table from the life insurance policy and go, I chose to be married to this person, the old leave and cleave. And this is, we are going the opposite direction with mom and dad moving in, creating some awkward situation and tension. You know, because I think it's actually maybe valuable. We'll see. Let's put you in this scenario, George. It's put you in this guy's actual shoes. Okay. Your parents come to you and they say, what do you - Hey, George, sell your condo, get a bigger house within law suite. We'll give you 200 grand toward it.

1:07:06George Kamel:And there'll be a life insurance policy to help cover expenses once dad passes. I go, mom, dad, that's very sweet of you to bring this idea to me. I talked it over with my wife, Whitney, and it just doesn't make sense for our family right now. Selling a condo is a big move. It's very expensive and we want to help in any way we can, but we don't want to combine our lives in this way living under the same roof. And we love you guys. And if you need any assistance or advice on what to do with this money to help create a life for yourselves, I'm happy to help. That's it. That's what I would say. I love that.

1:07:38George Kamel:Leave it there. I love that. So good. Phil is on the line right here in Nashville. Phil, how can we help? Yeah, thanks for taking my call. I'm 72 years old and I'm halfway through a 30-year mortgage. So I've got 15 years left. I owe$234 ,500 on the mortgage, which is at 3.5%. I also have a brokerage account of$291 ,000 that's been earning me 7.1%. I have two IRAs with$750 ,000 in them, and I also get$55 ,000 annually through Social Security. My question is, should I take the brokerage account money and pay off the mortgage or keep the mortgage for the mortgage interest on my taxes? Mathematically, keeping the mortgage for tax purposes doesn't make sense.

1:08:37George Kamel:It's stepping over a dollar to pick up a quarter. And so what I personally, if I was in your shoes at your age going, man, OK, I'll pay it off by 87 at this rate. I think life's too precious and I want you to have a retirement with dignity. And for those reasons, I would free up that mortgage payment today. You could cash that money out. You'll have the capital gains taxes on the brokerage account, but you'll still likely have enough to cover the mortgage, right? Oh, yeah. I would do it. And how much is your mortgage every month? What number are you freeing up? It's$2 ,380 a month. I just gave you a$2 ,300 a month raise, my friend.

1:09:14George Kamel:And you can do without what you want. You can go invest that. I would continue to invest it if you don't need the money and just keep piling onto that nest egg. And then you've got 55 grand from Social Security. Plus, you'll have a, you know, within the next several years, you'll have multimillion dollars in there in that nest egg. So you're going to be OK either way. I just don't want to live for the next 15 years with a mortgage if I don't have to. Right. All right. Especially because your mortgage is a guaranteed fixed rate you're making. right that three and a half percent is what you're making by paying it off the market lord only knows i hope it continues to do well but in the short term it could be negative 22 percent next year and so it's it's hard to compare them apples to apples but what i will say is freeing up that mortgage especially at 72 is just going to give you some peace it's one less thing living in your head rent free yes and that way um i would also be debt free i don't have any other debt oh yeah you reduce your risk you reduce the need to touch the nest egg are you married No, I'm single.

1:10:15George Kamel:Oh, wow. Phil, single guy, 72, you just freed up some money. Are you in good health? Yes. Okay, so you'll likely live into your 90s with this freed up mortgage payment, which is incredible. All right. So I would go crunch the numbers in your budget and go, what kind of life can I live now? Can I spend a little more? Can I give a little more? Can I invest a little more with this freed up mortgage payment? And I don't think you're going to miss the brokerage account sitting there. You could stack it back up if you want. Right. All right. Congrats, man. I feel like we're celebrating Phil's debt freedom today.

1:10:48George Kamel:I think we are. I mean, and who knows? I mean, the future's bright, Phil. I mean, you're an eligible bachelor that George just found$23 ,000 extra income. So come on, man. All right. Time to travel, I guess. There we go, Phil. Hey, Phil, are you a good-looking guy? I think he's a good-looking guy. I do. He sounds like him. Reasonably. All right. We're going to apply to get him on the Golden Bachelor. You know, it's interesting. That's my goal. True story. This is crazy that you said that. My wife and daughter, I have a 16-year-old daughter, and they love this Golden Bachelor. It's so much more entertaining.

1:11:24George Kamel:I've not seen it. Phil needs to check it out. But I feel like, Phil, you could be the real-life Golden Bachelor. I mean, do you know how many ladies out there your age need a stable man like you who's got plenty of dough? I mean, come on, buddy. Get on those cruises. Okay, thank you so much. Congrats. Hey, Phil had enough. Phil said, don't get involved. He's like, guys, I got this. I got this. I asked for financial advice, not relationship advice. Yeah, we went to the Golden Bachelor, which, by the way, he may not even know what that is. I mean, it's a television show. There's a thing called television for the young kids out there.

1:11:58George Kamel:I got to explain it to them. Yeah. Yeah. Do you watch this Golden Bachelor? I saw an episode or two, and it was a little cringy for my take. And that's why I want Phil on there. I think he'd be much better. much better candidate for the show you know it's just awkward they did like boo the older ladies are doing like photo shoots and kind of this boudoir thing and i went this is too much for me okay you just said that you just you took me to a place that quite frankly i didn't want to go to i'm not going to unsee that you're welcome again uh you know in phil's case though this is a great thing here you hear that story and um you know i love that decision george i love that the i love that you walked them through that.

1:12:36George Kamel:And that's such a good... Because to your point, I've seen some data recently. What is the average age now that people are reaching? Isn't it? It's gotten higher. Oh, like as far as longevity? Yeah, longevity. Yeah. Because if you take in the average age, well, that's factoring in infant mortality and other things. So when you look at it, if you've made it to 72 and you're in good health, there's a strong likelihood you'll make it into your 80s and 90s. Right, right. So in that situation, it's not too late. And to your point, I love how you laid that out. This money can be working for you. And if he doesn't need the nest egg right now, it just sits there.

1:13:12George Kamel:About every seven years, it's going to double. So you have$750 today. Seven years from now, he's 79. $1.5 is sitting there. At$86, it's at$3 million. That's fantastic. So quite the legacy. What is 86-year-old George Campbell doing with his time? With all the money you're going to have. Hopefully just not being bothered. I would just like to remain unbothered. That means you're just sitting in your lazy boy unbothered? I never said it was lazy. I could sit outside. I ask you, what are you doing? And you say, I just want to be unbothered. I'm probably playing a 99-year-old Ken Coleman in pickleball.

1:13:43George Kamel:That's my goal. Now that's an answer, and I think a lot of people would like to see that. I really do.

1:14:22George Kamel:Hey, if you're tired of living paycheck to paycheck and feeling like you can't get ahead, we'd love for you to join one of our free EveryDollar trainings hosted by one of our Ramsey personalities. That'll be George Camel. We'll be doing one of those. We're going to show you how to stick to a budget and even find thousands, that's right, thousands of dollars of margin using every dollar. So you can get out of debt and start building wealth. Plus, you can ask questions during the live Q &A. Here's where you sign up for free, by the way. RamseySolutions.com slash webinar. RamseySolutions.com. It's free.

1:14:54George Kamel:Sign up. You won't regret it. That's right. Jeff is up in Michigan. Jeff, how can we help today? Yeah, so I'm 49 years old. My wife recently passed away from cancer. Oh, so sorry. Sorry, Jeff. Yeah, so we're in good shape financially, no debt other than our mortgage. She was a teacher. And one thing we talked a lot about during treatments and cancer treatment and all that was, you know, we saved all this money. We were financially responsible, you know, which would have done more trips, more vacations instead of just, we did a lot of home projects ourselves. We didn't hire out a lot of contractors.

1:15:39We both have kind of a background and kind of a fearless trait to take stuff on. And, you know, where's that fine line of living life and still putting money away to do the right things, you know, working still to find what my new budget is, you know, and dealing with all that. And there's just a lot of stuff on answering questions. And, you know. How recent did she pass?

1:16:08George Kamel:Six weeks ago. Oh, goodness. Goodness gracious. Wow. Well, I would just give yourself some grace and time to grieve right now. Yeah. I wouldn't even be thinking about a budget. I would just do enough to make sure your bills are covered and taken care of and you've got food on the table. But, man, I mean, I can't imagine the fog of grief that you're in right now. And so are you in a good spot financially to just kind of float and grieve and cover the bills and get some help and heal? Yeah. Yeah, when we bought this house eight years ago, we did everything that was based on one budget and one income.

1:16:44If something would happen, looking back, you know, I'm grateful for it, but, you know, it was all based on one income. We both made roughly the same amount of money. I had a little bit higher income, but, you know, it was, yeah. And the biggest thing I'm fighting right now is insurance because she was a teacher, so health insurance was there. And so I'm paying COBRA, which is outrageous. But for the next four months, you know, all our out-of-pocket was matched in February. Versus starting over.

1:17:18George Kamel:What's your work situation? I'm a sales rep. Okay, so you have no insurance through your company? No, we do not. Okay. Jeff, one piece of homework I would give you, check out our friends at Health Trust Financial and see if they can get you a lower-priced plan. You can go to healthtrustfinancial.com and just kind of get the quote and see what they're offering, what the rate is to help you shoulder some of this burden right now. Did she have any life insurance or anything? That's part of my fight. She had one that was through school, and I found out yesterday I'm going to get taxed on that one because it was one that she did not contribute to.

1:17:59It was just one that they provided. I imagine it wasn't a lot. No, it was 75. Enough covered funeral expenses and everything else. Why not have to take anything out of savings and all that?

1:18:13George Kamel:Yeah. But she started her 22nd year this year. and every other year she elected the supplemental life insurance through school or through the insurance plan, which was$150 ,000 to$200 ,000, depending on which one she selected was available each year. And they're telling me that she did not elect it last year, and I have a hard time believing that after doing that every other year. And it's just fighting with a few people to try and get the information because I can't access her documents unless they open things up for me. And so she was very detail-oriented, and I can't imagine she would have not elected that last year.

1:18:53She was diagnosed, well, they found the tumor right around Halloween. So all her insurance paper would have been submitted before then. And so, you know, it's just those fights. Those are the ones that are driving me nuts right now.

1:19:06George Kamel:But even without her income and even with the COBRA, I'm wondering how much margin you have every month just off your income. I'm still clearing between$800 ,000 and a grand. Okay. That's extra. On top of your bills? On top of your bills right now. Okay. After all bills are paid, yeah. Okay. Your question was how do you balance? Including the Cobra. Okay, including Cobra. Okay, good. So you're wanting to know how you balance, quote, living for today versus saving for the future, especially after you know your life just changed dramatically i mean the picture that you had for the future is just gone and you have to grieve that and create a new one for yourself and you're still a young guy you're 49 are you in good health yeah okay well once once you've grieved and you've begun to heal i think then you can start dreaming a little bit again and go okay what does the next five year 10 year 15 plan look like for me and part of that is intentionality to just, you know, let's get the mortgage knocked out in the next decade, but also what are the things that were on the back burner that you don't want to have regrets about later on?

1:20:13George Kamel:Yeah, I'm curious to know what your investment portfolio is. What's your retirement accounts look like? We're sitting pretty good between IRAs and everything else we had combined. I just spent time the other day with our investment guy kind of signing the paperwork over into my name, all her stuff and we're sitting at about 400 there plus she has a pension and i'm waiting for the paperwork from the state because the other part of that will be taking a lump sum on the pension or riding it out and taking whatever that's going to be yeah monthly income yeah generally what we find is that taking the lump sum and investing it is a better option if you're not going to need the money because you have control over it the pension has a terrible rate return.

1:20:57George Kamel:There's risk there. And, you know, I don't know what the survivor benefits are, if it all gets passed down to you, or if it's 50 % of what the rate is, but you'll have much more control on your own taking that lump sum and investing it. Annette, you know, you said you're 49? Yes. Okay. So even with your 400 grand, at 62, you'll likely have 1.5 million if you added nothing to it. And so I would just continue on with the baby steps. Do you have kids? we have an adult daughter with a four-year-old grandson oh wonderful well i would lean on family right now lean on that support get your 15 investing still into retirement accounts work on anything extra put some toward the house but also i would sit down with a budget and go what are some fun things that yeah that you need to be doing now maybe that you didn't get to do you know you were a caretaker i imagine for a while and going through a real tough season And so what are those things that do light you up and bring you some joy?

1:21:54George Kamel:Yeah, I love that. I love that. And Jeff, I was going to ask on the heels of what George just said. I think he's right. Was there a place that you and your wife talked about that you always wanted to go to that sticks out to you? Maybe you thought, well, that's probably the one she would have most wanted to go to. Well, the only place we went out of the country for our honeymoon, and we cut that short because we both got sick. And so she wanted to never go out of the country again. That was her first and only trip out of the country. Okay. But what about a place that you guys talked about that you'd like to go to?

1:22:24George Kamel:We were supposed to go to Yellowstone this past summer. We started planning for that last fall before she got diagnosed. I'm going to throw it out there. I'm going to throw it out there. I think that's the trip that you take, and you honor her, and you make it a part of your healing process. I would definitely think about that. And Yellowstone's beautiful. Yeah. That's where I was so good. very fortunate for the last nine months that my employer, you know, I collected my pay and just said, Hey, take care of family. I was able to do a lot of that remotely and, um, you know, kind of reverted back to COVID times.

1:23:04And, um, right. You know, so I'm so grateful for that, that, you know, otherwise I couldn't get back to nine months ahead.

1:23:12George Kamel:Yeah. What was her name, Jeff?

1:23:16Kim.

1:23:17George Kamel:Kim. Kim. Well, We want to honor her legacy, and I know you are going to do that and have done that. By the way, you have just lived your life. By the way, you take care of your family, take care of your finances, and a great reminder to hug your loved ones and know that tomorrow isn't promised. And that's why we prepare for the future, because we just don't know what it will hold. And so we can't go full YOLO, but you can prepare, and you guys have done a great job of that, being debt-free, having money in the bank, and we wish you the best on the healing journey, my friend.

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1:25:03George Kamel:Welcome back to the Ramsey Show in the Fairwinds Credit Union studio. I'm Ken Coleman. George Camel is alongside. And Mike is going to start us off in Florida. Mike, how can we help? so i really uh have had a few uh major life events go on um i've uh recently had to uh relinquish my uh rental apartment and move my uh wife and son into a one bedroom and uh really had to just stay there and try and save up income um and did you get evicted What do you mean relinquish? So I was the sole income for my family, and we didn't have the EveryDollar or the Ramsey Solutions way of doing things, so I didn't have a budget.

1:25:59And so it just got piling up and piling up, and rather than get evicted, my wife and I decided to talk to our landlord and say, hey, we don't want to leave on bad terms. and so we relinquished it without having an eviction on our record.

1:26:18George Kamel:Okay. So essentially you kind of broke the lease, had a mutual agreement to say, hey, we can't afford to live here anymore. Can we leave on good terms? Yes. So you guys downgraded to a one-bedroom that you can afford? What income do you guys have right now? So right now I am delivering pizzas and doing DoorDash and Uber Eats to supplement my income. I would probably say my income is probably around$25 ,000 to$30 ,000, with that being fluctuational based on tips. So you're making my$2 ,000 a month right now? Correct. Okay. My wife is currently working part-time for the county, and she's probably bringing in $20 ,000 herself.

1:27:05Okay.

1:27:06George Kamel:Okay. With that, and I do want to explain the one-bedroom situation is actually staying with a blended family. I'm staying with my in-laws right now in a 10 by 12 bedroom as a family of three. So all three of you are staying in there? Correct. Okay. And how old's your kid? So my son is a year and a half. Okay. You're in the same bedroom with your in-laws. You're all sleeping in the same room? No, no. My wife, myself, and my son are in the same room. Oh, okay. Got it. All right. Sorry. And you're not paying any kind of rent or you don't have any expenses there for housing right now? They're just letting you crash?

1:27:50Correct.

1:27:51George Kamel:Okay. So what's your question today? So my question today is I have a huge passion to start my own business, start my own side hustle. I don't know if it's going to be more harm than good if I was to invest that in a startup and try and bring in some income for myself. I'm very much a work or performance-based worker, so I would invest all my time in doing that. What's the business? So I'm a finance guru, I feel. A guru? and I like to deal with numbers. That doesn't make you, but that doesn't make you a guru. A guru means like you're widely respected because of the, I just want to help you out there because I'm a little nervous about where we're going with this.

1:28:48George Kamel:What is the business? It's just a bookkeeping, accounting. It's what I want to go to school for and I feel like bookkeeping would be the first level in doing that. Have you done any bookkeeping before? I have. I have about a year and a half to two years experience entry level. Great. And so right now, let's play this out. What would you charge? What's the going rate for somebody like you with your experience? I don't know if it's an hourly thing. Give us the numbers here. So I was thinking it would be a monthly recurrent fee. I would be charging anywhere from$300 to$500, depending on the size of the companies.

1:29:34If they're a smaller business, it would probably be about$350. I would track all their financial transactions.

1:29:41George Kamel:How many hours do you anticipate working for$350? So I'm thinking anywhere from about 10 to 15 hours per client. And you're only going to charge$350 a month? Just starting now, yes. And you have no credentials right now? No credentials. I do plan on going to school, but at this moment I figured increasing my income is top priority. Okay, the reason I'm walking you through this is to be a sounding board because that's what you wanted from us. I don't know in this particular, in your financial situation, unless you've got previous clients that can open up doors for you, and that's certainly worth trying if you've got that to where you could pick up some people on the side and you could start doing this for extra income, then great.

1:30:36George Kamel:The other thing about this business is that it doesn't require a whole lot of investment to get up and going. You're not buying machinery. So that's a positive. But, you know. I'm projecting no more than$500 just for the startup cost and the LLC created and computer and stuff like that. I wouldn't put a lot of effort into that right now. I would see if I could get some people, if we could throw the fishing rod out there, cast the rod, and let's go. Let's see if we can find something. And if we can pick up something, let's just go do that. And let's just do basic 1099, if it's a small business.

1:31:16George Kamel:Let's see what we can get. I wouldn't invest a nickel right now, George, in trying to launch this business. Yeah, you guys are underwater right now. So it's not the time to kind of like invest into a passion project. I love the idea of you making income. So if you can get a few clients, let's do that and use the proceeds from that to then fund this thing later on to get the education. But right now, you guys can't afford to breathe. Yeah. You'd be better served working at Walmart stocking shelves. I've tried to plan everywhere. I go into Walmart multiple times during the week, and I've asked to speak to a manager trying to get that on-site job.

1:31:52George Kamel:And they tell you to go online. And I appreciate that, Gumption, but we don't just – and my point is you keep going. You keep going. You right now have got to do anything. If you show up on a construction site and go, do you need a laborer? And I'll give me a shovel. I'll carry bricks around the site. Like that's the level of, of urgency that you need right now. We don't just, you know, and I appreciate you went to Walmart, but your response to me should be, you're right. You're right, Ken, I'm continuing to do that. And I've done Walmart. It's not working out, but I'm going to go to, I'm going to go to Target next or I'm going to big lots or I'm going, you know, and I'm going to show up again on a construction site.

1:32:29George Kamel:I'm going to tell you something right now, George, I've said this before, but in today's current environment, if I was looking for fast money that was decent money, I would literally get in my car and drive around construction sites. I'm not saying that you're going to get something every time you go, but a lot of times you're going to find that they need somebody to just do something. Hard work. And manual labor is not the place where everybody's lining up. There's not a line out there. Well, if you live in a neighborhood, you've got clients there. Because as Dave says, rich people are scared of leaves.

1:33:02George Kamel:So you just go around and say, hey, I saw your grass a little overgrown. I've been cutting lawns in the neighborhood. I'd be happy to do it. Here's my rate. You're going to have to get creative until you can get this side hustle off the ground. But right now, we need to get some consistent income, see if your wife can work more. I don't know what the child care situation is. But if we have that under control, both of you need to be working 40, 50 hours a week to clean up the mess, get to a stable place so that you can rent your own place again soon. But this is a lot going on. It's not the time to pursue this thing over on the side.

1:33:32George Kamel:I agree.

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1:35:21George Kamel:Go to RamseySolutions.com to get your first class set up, or you can click the link in the description if you're listening on YouTube and podcast. Dawn is up in Philadelphia, Pennsylvania. Dawn, how can we help today? Hello. I'm looking for a little bit of advice on how I should approach some debt that I have outstanding. Okay. So just for background, I'm recently divorced July of last year, and I had to refinance my house as a result of the divorce. So not talking about the house right now, the only debt that I have is$18K for a car. So I'm trying to determine, do I get a second job? Am I being too conservative fiscally that I could probably pay more of it off now?

1:36:11George Kamel:That leads me to believe that you are. It's a very question that you asked there leads me to believe you are. So what evidence do you think that you have that says, hey, I could put a little bit more towards this? Well, just in my checking account, I maintain about$7 ,000 to$9 ,000 month over month after, you know, I pay my bills and everything. So I have that, and then I have in my emergency fund about$31K. Whoa. So I have some cushion. I mean, you could pass the car today. A relatively stable job. If you were doing the baby steps, we'd say start with$1 ,000 in the starter emergency fund, pay off all debt.

1:36:47George Kamel:You have enough to do that. Then begin three to six months of expenses. So you're doing the baby steps out of order, but the good news is you could be debt-free today, and you could burn less brain calories on this whole thing. I guess it's just me now. So I guess if something happened with my job, I don't anticipate that, but if something happened with my job, then I'd be unemployed, and then that cushion would go away. Well, if something happened with your job, you couldn't afford the car, it's getting repoed. And so you've got risk on either side. You've got more risk owing other people money and not owning this asset right now.

1:37:21George Kamel:And you're still going to have$13 ,000, even if you paid off the car today, and then you'll begin rebuilding that. What's your car payment? $415 a month. So you add that. Now you have that extra margin to add to your emergency savings goal. That's an extra$5 ,000 a year right there. and how much can you throw at your savings right now if you freed up that$415? How much could I, if I freed it up? So I come away, after I pay all my bills every month, I do have about$1 ,500 left over. Right. So what we're saying is if there's no car payment, now it's$1 ,900. Well, okay. So that's another$23 ,000.

1:37:59George Kamel:If you did that for 12 months, you just put that$1 ,900 away, you'd have about$23 ,000 on top of the$13 ,000. so you're going to be fine okay and then you can start investing so then that's what i was going to ask you that was the second piece so hold off on the invest i have a little bit of investment now but hold off i'm thinking about some efts that my friend told me about and i do need to research so you mean etf efts i'm sorry electronically uh sunday trade yes efts sorry about that etf um i keep saying wrong yeah yeah that's all right we know similar thing are you do Do you have a retirement account through your employer right now?

1:38:37I do have one through my current employer, and I do have some additional ones from a prior employer.

1:38:43George Kamel:Okay. I would get – part of your homework is rolling over the prior employer money. I would just do a direct rollover to an IRA. That will give you the most control and flexibility. It is an IRA. I should have said that, yes. It's already in the IRA. Okay. It rolled over. It's separate from my current employer, but it is an IRA. Okay, so you have that. So I would just not contribute any more until you're out of debt with that three to six months of expenses. So if your expenses are five grand a month to cover all your basic bills, then I would suggest having$25K,$30K in there. Okay. And a high yield savings.

1:39:23Okay, and then one other question. So for my 401K, I'm currently doing 6%. My employer matches 4 % up to 100K, and then after that it's – I can't remember what it is. It's 50 % after that. Okay. Should I not increase my 6 % while I'm trying to pay off, do all these other things?

1:39:43George Kamel:Well, you just told me you would be willing to pause all investing until you get into a better spot financially. And it won't be long, but I would pause that 6 % because how much do you make a year? About 157. Not including my bonus. this. So 157, 6 % is$9 ,400 extra. You could be throwing your emergency fund, which means it's going to get done faster. So here's the honest truth. You could be done with this whole thing five, six months from now. You could be debt free completely if you pay off the car today, then restock the emergency fund over the next five months and you'll be back to investing, not 6%, but 15%.

1:40:17George Kamel:You're almost going to triple your investing rate. Do you see that? I see some of what you're saying. So you're saying what I'll lose from my employer not matching, because if I stop doing my piece, they don't match anything. So you said what I'll lose on that is not significant enough to make me go the other route. Exactly. And the other thing it does, it lights a fire under you because you love that match. You want to get back to that match, which means you're working even harder to get that emergency fund back stocked up. That's what I found. That's human nature. Here's what's cool about this.

1:40:50George Kamel:You're working really hard to restock your emergency fund, Don, not working really crazy to pay off a car that is a depreciating asset. Right. That makes total sense how you just said it. I work hard to build savings, not pay for something that goes down in value. That's right. You're building for the future instead of paying for the past. That's right. If you do it this way. And yes, and by the way, we love that you called, Don, because it is a very real psychological hurdle to cut a big check from an emergency fund. Totally get it. However, the reason I told you about how you're working hard to replenish your savings so that you can invest and start on your path to becoming a millionaire, which I want George to paint a picture for that in just a moment.

1:41:35George Kamel:but understand that the minute that you pay the car off, which is a depreciating asset, you also are now freeing up$400 plus a month right back into your pocket. So I just want you to see that full picture so you can overcome that psychology of, oh, I don't like writing a big check out of my emergency fund. That's why I asked you, do you see it? I do. I just got to get over it because it's just me now. Totally get it. I'm divorced, so I do get what you're saying now. Yeah, because if you see it, you believe it. The other thing I've been thinking about is getting the part-time job. Sure. My full-time job and get a part-time job to help with this.

1:42:16Do you think that makes sense as well?

1:42:17George Kamel:Yes, and I'll tell you why. I don't know what George thinks, but I say yes because it's going to further help you with the psychology that I just outlined. Like, think about how much more secure you're going to feel because you're bringing in that extra money. Got it. And here's the truth. You don't need it financially. You don't need it. You're going to get through this pretty fast, but I do think it's going to light a fire under you after you just went through one of the hardest things a human could experience. Yeah. And I think action always helps with healing versus just sitting around changing Netflix.

1:42:50George Kamel:Now, real quick, George, paint a picture for her when she gets to baby step four. Oh, let's do it. Let's do the investment calculator. What's your total retirement investments right now? About 380K. Woo! I like it. You're going to like where this goes. How old are you? I am 56. 56. Now we're going to ride this out. You can make 157. That's before the bonus. But if you do 15%, you're going to be maxing out a 401k. That's 23.5 right there. Do you understand that? Okay. So that's, let's say, two grand a month. You're going to have quite the nest egg. Let's say you do this until 67. Oh, boy. Let me see it.

1:43:26George Kamel:Let me see it before you tell her. Okay. Oh, boy. Don, are you ready for this? George, tee it up. I am. 1.6 million at 66. Okay, I don't know how you did the math. Tell her. You can jump on RamseySolutions.com, use our free investing calculator. You're 56, current age. I did 67, retirement age. Currently, you have$380 ,000. If you contribute$2 ,000 a month, and we assume a 10 % rate of return, that's what we've seen overall in the U.S. stock market, you're going to have 1.6 million. Only$264 ,000 of that is the money you put in. Almost a million is just compound growth doing the heavy lifting for you.

1:44:01George Kamel:Go do it yourself, Don, so you can see he's not making magic over here. This is real numbers. I like it. I'm pumped for you, Don. I like it. You got a great income. Let's use it to build some wealth. Go, Don, go.

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1:45:21George Kamel:Hey folks, we would love for you to share the show. If this show is helping you, entertaining you in any form or fashion, Share, like, follow, subscribe, the whole nine yards. Smash all the buttons you see. That's what the YouTubers say, smash the like button. Is this a thing? 100%. It cracks me up how often between you and Jade, I hear something new and I've never heard before. I give Ken an education every day against his will. Yeah. No, I actually appreciate it. But I will say, I'm not comfortable ever saying the word smash in a video. I feel like I'm too old for that. If you hear me do it, I want you to just hit me right in the throat.

1:46:01George Kamel:Your teenage daughter would not like it. Oh, yeah. She would hate it. She would call it cringe, right? She would say, Dad, that's so cringe. There we go. Yeah. There's certain words that I don't think I should say. They're just too young for me. You know? Can I just say, just because you don't like something, it's not your preference, doesn't make it cringe. Can we just drop that? Yeah. Very bothersome. Thank you very much. What is cringe to you? Someone else likes. you know kind of like my cardigan sweaters that is cringe now you're aging into it very nicely it's perfect aging very well all right we digress scott is up in north carolina scott how can we help today hey good afternoon guys so um i overall had a question based on my current financial situation and thinking ahead now that i'm getting a little older um as to whether or not to pull some money out and renovate a separate building on my residential property to rent out as like a one bedroom, one bath studio kind of apartment.

1:46:58George Kamel:Nice. How much money would it cost to renovate this? Currently, I'm thinking it's probably going to be around$40 ,000 to renovate it. And what will it turn into? What will that give you? $40 ,000 for how many square feet? And then also, what do you think you would be able to make on rental? So it would be around 650, 700 square feet. And the realtors that I spoke with, based on the location, et cetera, summated around$1 ,000 a month. But I was kind of thinking$800 as a conservative number. Okay. And what would it add to the overall property value for resale? Now, that aspect, honestly, I haven't really discussed with them that much.

1:47:44So I'm honestly not sure.

1:47:45George Kamel:You planning to be there forever? Currently, yes. I mean, that was one thing that let me get the question because they just did a re-evaluation of property taxes here and then, like, shot up. But see, that's why, even though you're planning to stay there forever, if I'm going to sink$40 ,000 into something, George, on my property, I'm automatically going to go, how much value does this add to the entire thing if I were to sell? So right now you've got your home, X amount of bedrooms, bath, acreage, whatever, and now I've created a second living area on there. So that would be one thing, but if you're staying there forever, that's fine, but I still think it's worth looking into.

1:48:22George Kamel:And then the other thing is what gives you a lot of confidence or how much confidence do you have that you would be able to rent this out on a regular basis? I'm pretty confident. I mean, the area I live in, it's very close to a lot of universities, hospitals, things of that sort. So I wouldn't think that I would have any kind of problem finding a long-term renter for it. So it's a one-bedroom, and you're putting it out there, so people coming in for football games or tourism or something like that, that's what you think this is? Potentially. I mean, I was thinking more like just to establish a long-term renter, specifically.

1:49:03George Kamel:Oh, a long-term renter. All right. All right. I asked all the questions. George is very particular on these things. Well, I'm just trying to backtrack and go, why are we doing all of this? Yeah, I don't see it. Is it just to cover an increase in property taxes? I mean, property taxes, I mean, and the thing is, currently, I've been with my employer the majority of my little life, but there's a lot of change going on. And currently, I don't necessarily feel, I guess, secure in my position. And in the area, I'm not sure that I'd be able to find a job equivalent making to what I make now. Which is what?

1:49:36What do you make now? Not taking into account annual bonuses around$110.

1:49:43George Kamel:I just don't think$1 ,000 a month solves the problem you're trying to solve. Well, and then where is this$40K coming from, you said? So aside from my retirement account, I did start – obviously, I've tried to save some. I've not been the best at it, but I've tried to save. And I did start investing in the stock market during COVID, and the returns on that have been pretty positive. So I think between my brokerage account and personal savings, I have around$80 ,000 saved. Okay. That's actually liquid. You're not going into retirement for any of this money. Correct. Man, I mean, it's a gamble. I wouldn't do it.

1:50:18George Kamel:It's going to take you probably five years to just break even on this. And that's why I'm out. And you also said if you didn't have this job, you'd likely have to move to make something similar, which tells me you might need to sell this house before you even break even on it. So, I mean, 80K, you're fine to cover the property taxes. I just think you're trying to do multiple things at once and go, well, property taxes are going up. Might as well get a rental versus just going, hey, what can I do in my budget to just add a sinking fund and cover this added expense? My payment just went up every month.

1:50:53George Kamel:I can handle it. Because being a landlord on your own property has its own problems. There's risks. There's vacancy. There's maintenance. There's repairs. There's the actual renovation, which is probably going to cost you more than you think it will because that's usually how it goes. I actually think you're afraid. I think what's driving this is the job situation. That's what I heard. I heard that you're a guy who's not so sure that you're going to have your job for very long. That's what I heard. I honestly mean, I think that's the main part of it. Because, I mean, ideally, I wouldn't necessarily want to handle a long-term rental and have that stress.

1:51:29George Kamel:Right. I think you just answered the question. Well, the reason I – okay, so I'm glad you answered that because here's the thing. That's why I drove in on that point. So fear is driving this possibility. And so if we play this out, the very thing you're afraid of happening, this would actually be one of the worst things you could do if the fear came true. In other words,$40 ,000 of cash, and to George's point, there's no guarantee that it's going to be$40 ,000. So you need that$40 ,000. I'd want that$40 ,000 in liquid. I'd want it there so that I had a cushion if I needed a cushion if I lose my job.

1:52:06George Kamel:So the very thing you're trying to solve with this idea, I don't think this is anywhere near the best idea. I think the best idea is to hold the cash and stack the cash. Okay. Yeah, leaving it invested and then you getting a part-time job will have better ROI in the meantime. So if you're really angling to make a little more money right now and you want to make$750 a month, you can go do that using the skills that you have today. That's a great point. Go make$1 ,000 doing something else. Gotcha. Thanks, Seth. I mean, I guess one follow-up question around that scenario. And I think I already have the answer.

1:52:40I mean, just thinking logically through this, but I wanted to kind of pose it to you as well. I mean, because I was thinking of the worst-case scenario if I were to lose my job. because I don't necessarily want to leave this area this area I grew up in or whatnot. If I were unable to find an equivalent job making what I make, I mean, I considered potentially cashing out my 401k because my 401k...

1:52:59George Kamel:No, horrible idea. You're going to be calling us a 60 going, hey man, I'm broke. I don't have anything in retirement and my body gave out. I can't work anymore. I don't have anything in retirement. Do not cash it out. You're essentially taking out a loan for 35 or 40 % by cashing out your retirement, which you would never do that, right? And that was my initial fault. That was like a no-go. It's horrible. It was a fault in the back of my mind, so I appreciate y 'all coming. Unless you're facing bankruptcy or foreclosure, you never touch your retirement accounts if you're not 59 and a half yet.

1:53:31George Kamel:Scott, if I can, can I encourage your heart on something? And I'm not saying this critically, but here's what I'm hearing. I'm hearing a guy who is looking at a real possibility of something bad happening and you've gotten protective instead of proactive. I think everything I'm hearing is a protective solution instead of a proactive solution. That's what I hear. And I think that you need to happen to this possibility, not try to go, how do I protect myself from this bad thing happening? I consider a 401k thing, which is a horrible decision. I'm considering spending money on this rent thing, as opposed to going, if this happens, I'm going to do this, this, and this, and I'm going to spend my time connecting with people.

1:54:14George Kamel:And I'm going to give you a copy of my book, The Proximity Principle, just as some form of, hey, I'm going to build my network starting today so that if this happens, I can be proactive and not protective. I just sense that over you. And by the way, we all fall into that with fear. But I think the best way to handle something that could be a negative, that could be coming, is to think proactively on how to solve it, not protectively. George? It's a good word. Nothing to add. No notes. No notes.

1:55:25George Kamel:Our scripture of the day comes from Psalm 86 verse 11. Teach me your way, Lord, that I may rely on your faithfulness. Give me an undivided heart that I may fear your name. And our quote of the day from Mark Twain. don't let schooling interfere with your education i know ken loves that one i do love a good mark twain by the way i'm reading the biography on mark twain right now by ron churnow how's that it's tough read really yeah i thought he'd be a fascinating guy he is churnow's a little heavy oh i just i don't want to endorse the book because and i got dave reading it and dave and i were talking the other day on the show he's like man that's pretty heavy i got it's it's just it's not an easy read in light of who twain was you would think it'd be a little more brevity a little bit a little bit lighter fare.

1:56:08George Kamel:It's a very good point. Very good point. Carol is joining us in Charlottesville, Virginia. Carol, how can we help today? Hi there. So I have an anecdote for you. I was at the credit union the other week, and I was at the teller window, and this gentleman walks up to the next teller window, and the teller says, how are you today? And he goes, better than I deserve. And I was like, Dave Ramsey in Charlottesville? The secret signal. That's how you know they're a real one. Yeah. Yeah. Did you like give the guy a knowing look and say, I know you? Yeah, I did. I said, I know where that comes from. And he chuckled as he was depositing his money.

1:56:44George Kamel:Love it. By the way, can I just say, Carol, I love that you used the word chuckle. It's one of my favorite words. I don't think we use it enough. So thank you. You're welcome. Okay. So I have three properties, my primary home, my, and two rentals, the duplex. and primary home is paid off. But how much, based on, how much would you put aside for, you know, like the roof may be replaced one day or the HVAC is going to go out. Is there a percentage of the value of the property I should have in a sinking fund? Or is there a formula for that? Good question. George, what do you think? I don't think there's like an industry standard formula.

1:57:28George Kamel:But I think, you know, kind of going, hey, 10 % of rent, if I can afford to put that aside. So if you're renting it for$1 ,200, can you put away$120 a month? And if you feel like based on the, it also depends on what's going on with the house. Is it a 20-year-old roof? Well, you're probably going to need a roof fairly soon. And so I would, you know, you could do an inspection on it and kind of see where the problem areas might be. Because they'll tell you, hey, the HVAC is okay, but you're probably looking at five years you're going to need to replace this thing. If it's a brand new property, it might mean a lot less issues.

1:58:01George Kamel:So it really depends on the current state of the properties. But more is always going to give you more peace. Exactly. Did you have a number in mind? I read, I have Googled this, and it says anywhere from 5 % to 10 % of the property value. That feels real high. That seems like a lot. What would that be for you? so each each of these duplexes one well one of them just got renovated completely um and that that set me back about 42 but that was everything new flooring siding windows had to replace some floor yeah see none of that's going to just spring up on you and that's the stuff you want to get ahead of the stuff you know is coming and then also have some for the emergency stuff that you can't foresee coming yeah right yeah so the one i've heard is one percent of the property value So 10%.

1:58:52George Kamel:Now 1 % a year. Yeah, 1 % per year. Yeah. So eventually you might have 10 % of the value. One of them is like 300K. The other one is probably 250 because it does need work. But this one's been totally redone. 300. So 1 % is what? Well, it would be 2 ,500. 2 ,500. 2 ,500. Okay. Yeah, I would have an ultimate goal of saying, hey, can we have 30K each in an account eventually? Yeah. But if you can't do that tomorrow, that's okay. But if you know one of them needs more work sooner, I would stack that one up faster. And you can always move the piles of money around. It doesn't have to be$30K here,$30K there.

1:59:33George Kamel:You can move it around eventually if something comes up. Yeah, I had one account that services both houses. Are they paid off? You have a mortgage on both the rentals right now? Well, yeah. Well, the one that I'm in was paid off. and my primary residence had a house fire. Oh, my goodness. Bless your heart. So that was completely gutted. That house was paid off, but I had to gut that house, and I had to cash flow some of the stuff that insurance wouldn't pay for. So to do that, I took a mortgage out on the one rental property to help until I can get settled. Oh, it was paid off, but you went backwards to fund it, taking the equity out.

2:00:15Yeah, but my primary is – so I had this grand plan. I just turned 59 last week. Everything was going to be paid off by the time I turned 60, all of my mortgages, and that didn't happen. But still trying to make that happen. What are they worth? With the insurance company.

2:00:30George Kamel:And what's left on the mortgages? Yeah, so$150 is owed on this one that's worth$300, and I owe$27 on the one next door that's worth$250. And then my primary home, the value, because it's been totally redone, everything's been redone, That's probably going to be a half million. And that's paid off. I'd work on knocking out that 27K rental mortgage and then move on to the 151. And worst case, if you don't like one of them, just sell it and pay off the other one and be done. I've been thinking about that too. You might find the juice isn't worth the squeeze on how much you're actually making per year and what your hassle factor is and what your time is costing to put the effort in.

2:01:13Exactly. Well, I've been living in the one rental while my primary home is being renovated. So that was good. I didn't have to pay rent somewhere else. I'm just living here for free.

2:01:27George Kamel:What are you clearing on both of the condos? On this one, I'm clearing, well, it was paid off. So probably$1 ,100 between the two. So like$500 each. See, that's the point that George is making. It's just – For$13 ,000 a year. That's a lot. Without even the risk and vacancy, repairs, maintenance. I'm going, if you sold one of them and put the excess in an investment account, you could probably make$13 ,000. Yeah. Truly passively with no headache. Yeah. Well, I've got 1.5 in my investment account. Woo! Good for you. I would get rid of one of these. I would sell the one with more debt on it and then pay off the other one and you can hold on to that for a while if you want to and that's a whole lot less.

2:02:19George Kamel:Yeah, the thing with real estate is you need a lot of it in order to actually replace your income. So to make 500 bucks a month maybe, I don't know if it's worth it for you. If you're kind of done with it, you're dealing with a lot of issues, the house needs a lot of repairs, there's nothing wrong with throwing in the towel and going, you know what? I tried it. It was fun for a season. And I'm turning 60. I just want less hassle factor. Yeah. Yeah, no, that has crossed my mind, too. And then, you know, the other thing is I went back through my—I'm not a baby step Ramsey person, but I've always lived below my means because both of my parents were Depression-era kids, right?

2:02:56So we always lived below our means. You know, we had everything we needed. My father always said, if we don't have the cash, then we're not getting it. I mean, that was the role. So that's how I've been raised. then that'll get you far in life curiosity i went back and looked at my social security statement you know for all the years i've been working since like 1984 or whatever the average the average of my salary was 48 ,900 wow and i'm sitting on 2.5 million at the moment

2:03:26George Kamel:so i'm pretty pretty good way to go no you're not pretty good you're pretty freaking awesome is what you are. That's just phenomenal. That's another reason. At 59, I would unload one of these things and not have the debt on it. You've got so much money in your retirement. That's, George, what is she going to - It's not going to change your net worth because that 1.5 million, by the time you're 66, will be three if you don't do anything. If you don't do anything. Right. I would enjoy my life a little bit more. That's just too much of a headache for someone who's worth what you're worth. That's my opinion.

2:03:58George Kamel:Like none of this is, you're not in trouble, but this is just if I look at how much money you're actually making on this for the if it was paid off and it was a cash cow and it was very little effort and a little hassle factor I said just keep it you're enjoying it but it feels like the joy is gone and you don't need it it really I mean I have great tenants um the tenant that I've had she's been over here for 15 years she she is not a hassle um and the tenant that was in this house wasn't a hassle either until she, her circumstances change. But anyway, you know, and I try to help out. Yeah. Well, the people may not be a hassle, just the maintenance and upkeep.

2:04:32George Kamel:Yeah, we're just saying, you don't need any of this. So you're doing great. Fantastic. Fantastic scenario. Thanks for calling us. Glad to end on a high note. Oh, I love that. And hey, to the rest of you, remember, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus.

2:04:55Thank you.