The White House Doesn’t Decide Your Future—You Do

6:41Dave Ramsey:Boy Child's got a problem. Yeah. All right. Yeah, we need to start talking about getting him in some counseling. Okay?

6:49George Kamel:Okay.

6:50Dave Ramsey:That's not cool when you make$10 ,000, okay?

6:53George Kamel:Right.

6:54Dave Ramsey:That's like over the top. So he's got issues here. It's a different system now than what I gave you earlier. I apologize. At this point, it's cutting him off from access to the checking account. This guy cannot be counted on. I think you're dealing with an addict, honey.

7:09George Kamel:Okay.

7:10Dave Ramsey:And so I think you're going to treat this like he was doing cocaine.

7:14George Kamel:Okay.

7:14Dave Ramsey:We're going into counseling, and we're going into Gamblers Anonymous, and we're going to sit down with our pastor, and we're going to see a marriage counselor, and we're going to do all four of those things immediately and start working on how you get to the point that anybody, it's an illogical thing, which points to addiction, okay, to spend$14 ,000 when you make$10 ,000. On freaking scratch-offs, which is like the lowest probability of anything you can do. I mean, the lottery is basically a tax on poor people and people that can't do math. Almost all the lottery tickets are bought in lower-income zip codes, and people that are struggling with math, whether they're in lower income zip codes or not.

7:59Dave Ramsey:But your husband's struggling with math. I mean, he's not even going to win. This is horrible. So scratch-offs.

8:07George Kamel:But it's a sunk cost fallacy where he goes, well, now I've got to grind my way out of this by getting the right scratch-off. And so you're going to have to manage the money on your own right now. I didn't catch that. And then you're going to have to babysit it.

8:18Dave Ramsey:You caught that, George. Good work. I just had a weird sneaking suspicion. Yeah, you caught that one. I was about to drive by it. Wow. I'll put that on my resume. Okay. That's good. That's how we start today right there. Oh, so sorry you're dealing with this. Yeah, but you're going to have to treat this like it's very serious, honey, because it is. Yeah, and you can't count on him to manage money because he can't do math. He's struggling with math because of his addiction. That's what this points to anyway.

9:00Dave Ramsey:You know, one of the first things I discovered working in the financial world is how absolutely devastating it is when the breadwinner of a family dies. And there's too little life insurance or none at all. Grieving families are suddenly left behind scrambling to pay bills and trying to make ends meet. I also discovered that there are a lot of ripoffs in the life insurance world, like that whole life crap posing as an investment opportunity. What you need is level term life insurance, usually 10 to 12 times your income, which is the smartest, most affordable way to protect your family. The key is finding an independent broker who represents a ton of companies and works for you, not for the insurance company.

9:43Dave Ramsey:This is exactly what my friend Jeff Zander and his team at Zander Insurance are all about. They shop the term life companies to find you the best options, and they've been around for over 95 years. So you know they'll be there when you need them. Xander is the real deal, and that's why they've handled all my personal insurance for over 25 years. I trust them, and you can too. Visit Xander.com for instant online quotes, or for a more personal touch, give them a call at 800-356-4282.

10:36Dave Ramsey:so the big beautiful bill um i thought that was a nickname they actually named the law that

10:47George Kamel:which is trippy to say the least beautiful it's just such a strange adjective for a piece of

10:53Dave Ramsey:paper i think it's pretty cool i mean it's kind of fun but um so everybody's wanting to know okay is the world going to come to an end because of it or is the world honestly going to get better well as usual with washington um there's some things that are good and there's some things that are not good and you can just kind of go with that you know i don't think there's any bill

11:13George Kamel:that universally will help anyone and everyone.

11:16Dave Ramsey:Well, because that's not the government's job, by the way. It's your job to help you quit waiting on the White House to fix your house, in other words. But anyway, everybody's wanting to know all this. So we thought we'd spend a segment on it anyway. I'm not going to spend the rest of my life on it, but I probably will because a lot of stuff's going to come up over the rest of my life. But anyway, first thing is the 2017 tax cuts were made permanent. they were scheduled to run out and that's huge because uh the main thing that happened is 90 some odd percent of americans take the standard deduction do not itemize and the 2017 raised the standard deduction super high and so it keeps you from having to pay federal income tax for a whole bunch of you at all just because you get this huge standard deduction some real savings for most people and they increased it another fifteen hundred dollars in 2025 not for 24 but for 25 which when you file next year you'll see that and it's going to continue to increase adjusted for inflation so that's a that's a nice thing there so it makes the income tax filings be fairly easy for most people and um you know you know you but you're not writing off interest you're not writing off charitable deductions with the exception of what I'm going to come to in a few minutes, that kind of stuff.

12:41Dave Ramsey:So a politician kept a campaign promise. Note this. It's fairly unusual. Doesn't happen much. So no taxes on tips and overtime. He dreamed that up and everybody went bonkers. And they actually did it. Now, it's got limitations to it. The bill adds a tax deduction of up to$25 ,000 for income from tips. So you don't pay taxes on that.

13:11George Kamel:And that's not dollar for dollar, but it will reduce your taxable income by that much.

13:14Dave Ramsey:Exactly.

13:15George Kamel:Which is helpful. That's still a few thousand bucks for most people that work on tips.

13:19Dave Ramsey:Yeah. And it's only for three years, 25 through 28, and then it expires. The deduction phases out if you make over$150 ,000 a year or$300 ,000 for couples. Same thing for overtime. It phases out on that and is only for three years. And the bill adds a tax deduction of up to$12 ,500,$25 ,000 for couples for qualified overtime wages. So that's good. That's good. That's a move. Trump accounts, babies born from the start of 25 to the end of 28 would receive a$1 ,000 Trump account deposit. Where is that going?

13:50George Kamel:It goes into – it's managed by the Treasury, and there are no tax advantages like there would be with a 529 plan or a Roth IRA. So the best part is the free$1 ,000.

13:59Dave Ramsey:It's just$1 ,000. bucks.

14:00George Kamel:You get a thousand bucks and that, you know, it'll have compound growth. I'm not sure how they're investing it. I'm not sure how much control you'll have.

14:06Dave Ramsey:Like none.

14:06George Kamel:But it does have restrictions and, you know, you have to withdraw it at a certain time and all that kind of stuff. But it can be used for college, home buying, starting a business.

14:16Dave Ramsey:It's a thousand dollars. One time it's useless.

14:18George Kamel:Yes. So I was excited at first.

14:19Dave Ramsey:And they're handling it. Because I thought this could replace social security. Political BS. But it's not enough. Student loan overhaul. I'm not going to get into that. Don't take student loans, okay? Auto updates. Those who buy American-made new vehicles can deduct up to$10 ,000 a year in interest on the auto loans. And that deduction phases out if you make more than$100K or$200K from couples. The bill ends a$7 ,500 tax credit for the EVs. We knew that was coming. We knew Elon was pissed. Everybody's seen that. That one seemed vengeful. Yeah, there's like, just drop that in there. It's like a bad breakup.

14:55Dave Ramsey:Yeah. But I'll tell you what ended up happening was like north of town here, there's several million square feet. General Motors was building a battery plant. Oh, wow. For EVs. And they shut the construction down in the middle of it.

15:08George Kamel:Because it's really going to hurt the demand when you reduce the credit.

15:12Dave Ramsey:They, you know, took their foot off the gas.

15:15George Kamel:Took the wind out of the sails there.

15:16Dave Ramsey:Took their foot off the battery. Oh, there we go.

15:18George Kamel:No gas here, Dave.

15:20Dave Ramsey:Oh, man. Ba-da-boom. All right. The bill ends tax credits for rooftop solar, geothermal heat pumps, and other energy-efficient home devices at the end of 2025. If you're going to do any of that and want the federal tax credit for that, you do it by the end of this year, installed and paid. Can't just be contracted for. Has to actually be done by the end of the year. Medicaid reduction. The bill creates a tax deduction of$6 ,000 for seniors for three years, 25 to 28. The deduction decreases if you make more than$75 ,000 or$150 ,000 for couples. Currently, no proof of work is required to receive Medicaid.

15:57Dave Ramsey:The bill requires by the end of 26, most adults who do not have children younger than 14, to document 80 hours of work to get Medicaid. As per month. Volunteering or training. Not a week. Don't worry. Or something. Yeah.

16:11George Kamel:So that's about a part-time job right there.

16:14Dave Ramsey:Yeah. 20 hours a week. Well, I mean, you actually have to be doing something, yeah, to get this welfare.

16:19George Kamel:For able-bodied adults. Exactly.

16:22Dave Ramsey:SALT deduction, S-A-L-T, that is, this bill raises the current cap on the state and local taxes that people in high-tax states have to write off on their federal returns to$40 ,000 from$10 ,000 that you can write off if you live in one of those income tax states. Charity deduction, bill lets you write off up to$1 ,000, whoopee, of your donations,$2 ,000 for couples starting in 26, even if you take the standard deduction. All right. That's new. But it's a whole thousand dollars. Whoopee. No big deal. Tax credit for children,$2 ,000. It raises it to$2 ,200 and adjusts for inflation after that. So that continues as part of the 2017 bill.

17:05Dave Ramsey:HSA, more people are eligible and money can be used for more expenses like gym memberships. That's a cool one. That's neat. I'm a big fan of the health savings accounts. $529 can be used for more expenses like tutoring or dual enrollment fees. workforce training after high school. This is great for the trades. Yeah, Mike Rowe will love this. The trades have been kicking up. That's good. And so basically a bunch of little tiny stuff. There's no big, beautiful thing in here. Yeah. It's a bunch of nickel and dime stuff. I mean, tips. I think the big one's no taxes on tips and overtime. But if you're not going to take out a car loan, and you're not going to take out a student loan.

17:46George Kamel:Why not give the benefit to anyone who buys an American-made car, whether they use debt or not?

17:51Dave Ramsey:Something, yeah.

17:52George Kamel:Why only let the people who took out debt benefit from this? That's an odd one.

17:55Dave Ramsey:That's a help. Thank you to the banking. That's America. Banking lobbyists got involved there. We'll make sure we're in debt. Spending like her in Congress, it raises the debt ceiling by$5 trillion, which estimates are that'll probably last about the time that Trump is in office. And then they'll have a bump into the ceiling again.

18:14George Kamel:in so that debt ceiling they just keep raising it how high can this roof go that's the question

18:20Dave Ramsey:so you know maybe if you were going to buy solar uh or maybe if you're going to buy an ev or maybe and the evs go away i think that was september 30th you can still do the ev thing up to september 30th um and then uh but but really there's not anything in here that's going to change your life.

18:41George Kamel:I don't see any someone on a golden horse riding in to save your day here. There's some tax cuts. So if, you know, for the people that were doing well, the best thing that

18:50Dave Ramsey:they did, the biggest thing, and it's kind of quiet on this, the way this is written up, is that they just made permanent the 2017 stuff, which is really big stuff in 2017. The thing they did do, for those of you that run a small business, is they brought the R &D write-off back thank god if your business is under 31 million annually uh you can start immediately taking your r &d tax credits back that had been in place for like 75 years and went away two years ago weird because they didn't renew it because congress sat on their thumbs which they usually do and uh so small businesses were getting slammed because they lost a huge depreciation issue on R &D.

19:33Dave Ramsey:I know I did. If your business is more than 31 million, it's still coming back. If you're, you know, like ours is about 300 million, so we don't qualify. And so it's still coming back, but we're going to have to wait till like 26 or 25 for it to show up. And it's a different issue. But yeah, but still, at least they got it all back in and they put the tax law back together is what they did with that. So big, yeah, beautiful. Bill? Sure. It's a bill. I'll give them that. It's a bill.

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21:59Dave Ramsey:financial peace university coordinators people that coordinate and run these classes all over america are everyday heroes who share the hope and freedom that comes with financial peace university and that deserves to be celebrated if you're a coordinator listen up join us at the virtual 2025 coordinator rally on July 24th to celebrate the impact that you've made. Whether you've coordinated a class before or you just want to see what leading FPU is all about, you're invited. You're going to hear from Jade Warshaw, George Camel, Dr. John Deloney, and other special guests, and we're giving away$3 ,000.

22:35Dave Ramsey:So register for your chance to win. Register for free at RamseySolutions.com slash rally and click the link in the description if you want to go that way and if you're listening on youtube or podcast that is so check that out kate is in chicago hi kate how are you hi dave how are you doing better than i deserve what's up

22:56George Kamel:all right so every year we get an escrow notice that our account has a shortage so they're raising our mortgage payment again in 2019 is when we bought the house and our payment then was 1 640 And our payment now, six years later, is$1 ,840. So with those raises over the years. And now we just got this year's notice saying our account is$1 ,200 short. And so we have two options. We can send in the check to cover the shortage or they will add it to monthly payment. The monthly payment is going up$100 regardless of whether or not we send in this check. But then if we don't send them the check, it's going to go up$200.

23:42George Kamel:So now our mortgage payment would be around$2 ,000. So one of my questions is, is it normal that it goes up every year so much?

23:50Dave Ramsey:Okay, your escrow pays your property taxes and your homeowner's insurance. The only reason your escrow would go up is if those two are going up. Yeah. And they probably are.

24:04George Kamel:Yeah. Especially since 2019.

24:07Dave Ramsey:You live in the Chicago area. And so your taxes are horrendous. Yeah, I agree. And they probably have gone up on your property taxes every stinking year. And it would not be unusual for your homeowner's insurance to go up every year. For one thing, you need to have your homeowners looked at and make sure that as the value of your home increases, you increase your coverage, which will cause your price to go up as well, your premium to go up. Okay. So escrow is pretty simple. Whatever your property taxes are for that year, the year upcoming, okay, and plus whatever your homeowner's insurance is, the total of those two numbers divided by 12 should be added to your standard principal and interest payment.

24:52Dave Ramsey:And that's what escrow is. They're collecting one-twelfth of your homeowner's one-twelfth of your taxes. And what you're telling me is that you underpaid, you did not pay enough last year to cover those two things by$1 ,200.

25:09George Kamel:Mm-hmm. And that's by their estimation a year ago, how much we would have had to pay a year ago. Yeah. If that makes sense.

25:17Dave Ramsey:No, I mean, by now, if you've got a shortage of$1 ,200, it's because of what actually happened, not an estimation. Now, they underestimated last year, and that's what caused it. But, you know, basically what you're doing is you're trying to stay, you're trying to have one-twelfth of what your actual taxes and your actual property taxes and your actual homeowner's insurance are. That's what it is. And when you come up short, it's because those things have gone up or because they didn't collect enough to pay those things. That's what it amounts to. So I'd pay the$1 ,200 if it was me, keep my payment, and then check on the account and figure out are they collecting enough based on what your actual homeowners and your actual property taxes are.

26:11Okay.

26:12George Kamel:Do people ever try to manage those things on their own and just pay property taxes?

26:17Dave Ramsey:Yeah, if your mortgage company allows it, not all of them do.

26:20George Kamel:And once you pay off your home, then it's on you to handle that. because there's no more mortgage company involved.

26:26Dave Ramsey:Yeah.

26:26George Kamel:So I handle my own escrow, and I just make sure to keep track of how much I'm saving for property taxes. Well, you don't have an escrow.

26:32Dave Ramsey:You just have to pay the bill.

26:33George Kamel:I am the escrow. My bank account is the escrow.

26:35Dave Ramsey:George Escrow. That's his name.

26:37George Kamel:It's fancy. So, Kay, there's a few things you can do. You can track your property tax assessments annually, see if your property taxes are going up, call your insurance company ahead of the renewal to anticipate any increases, and then you can even request an escrow review mid-year to say, hey, where are we at based on what I'm actually paying, based on what's in the fund. Are we on track? That'll just help you avoid the like jump scare at the end of the year when you have this bill. Yeah. Right. Because in the background, we're trying to do baby step number two, paying off debt. And so as we're like going through this summer, we're like, yes, we're going to put this payment right toward debt.

27:13George Kamel:And then we get this letter and it's like, oh man.

27:16Dave Ramsey:Yeah. Well, if you're in baby step two and you don't have the 1200, It's okay to add it. It's okay to just have$200 more on your monthly bill. That's fine. But it sounds like your expenses went up$1 ,200 anyway. Yeah. So that's where the$200 comes from.

27:34George Kamel:So I need to look more into that.

27:36Dave Ramsey:Yeah, yeah. I want to find out what's really going on with the escrow and make sure that there's not an overage either.

27:43George Kamel:You can always reshop your homeowner's insurance. I do that with Xander once a year. and, for example, they're saving me money this year because they found that the rates were getting higher and another company had a more competitive offer.

27:53Dave Ramsey:Yeah, you can jump in and look for one of the ELPs on property and casualty in the Ramsey Trusted site. And, you know, one of the people in your area there can help you do that and help you search that out. And you might save some money on your homeowners. That might help the situation, actually, considerably. But that's how it works. It's one-twelfth of those two collected monthly. And if they don't collect enough to pay it, you have a shortage. If they over collect, you have an overage. It's that it's simple math in that regard. JD is in Dayton, Ohio. Hi, JD. How are you? I'm doing great, Dave.

28:31George Kamel:How are you?

28:31Dave Ramsey:Better than I deserve. What's up?

28:34George Kamel:So I have a full time job. I also DJ weddings and private parties through a company. and I do about 100 events a year and an average about 300 per event all over my tri-state area. So I need a side hustle that I can do everywhere so I can work in between my gigs. I tried DoorDash, but it seemed like it's a lot of wear and tear and maintenance on my car. So that led me to looking for an online side hustle. Most of these I've found have turned out to be scams. So how can I find a legitimate online side hustle that I can do from anywhere that actually pays me? Well, here's the thing. When you think about how many people want what you're looking for, it's everybody.

29:19George Kamel:Everybody wants to sit on their couch and make money. And so that's the problem you're also faced. That's what you're up against is that anyone can do this. And so you need to find out what your specific skills are that can make you more than some guy taking a survey for five cents. And so that might be knowledge-based work like freelance writing and editing. online tutoring, voiceover work. I don't know what you're, if you're a DJ, I assume you've got some skills that transfer to that world. And then there's also more tech driven side hustles. There's flipping things online, getting into, you know, blogging or YouTube and kind of the digital space online courses.

29:54George Kamel:But for most people, you're going to find that there are pennies to be made with most of these side hustles that involve, you know, taking some surveys online. And so the The truth is there's not a ton of amazing opportunities to sit at home unless you find a legitimate job working flexible, part-time, doing customer service calls or something like that for a legit company. Yeah. The voiceover thing, I really would love to get into that. I've been told that I have a pretty good voice, so I think that would be awesome. How would I go about getting into that? Because I've looked at – I've seen ads for it like on Facebook and things like that.

30:32George Kamel:but I have no idea if these things are legitimate or not. They're not. If it's a Facebook ad, there's a good chance you're about to get scammed. So you can, like a site like Fiverr, you can make your own profile and you can kind of pitch what you're offering and the price and you can find clients through that that might become long-term. I would get around people who are actually doing it and get in those communities and circles. That's going to be your best bet if you really want to do it. But man, it's going to take getting off your butt. I don't know that there's much you can do from home to make$4 ,000 a month magically.

31:01Dave Ramsey:Probably on the voiceover stuff, I would just start hitting ad agencies that are getting ads cut for podcasts and radio. And you might contact some of your local radio stations as well and say, do you have any opportunities for some of the ads coming on that you need a different voice other than your own air talent? And they probably do. Sounders and other things.

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33:10Dave Ramsey:Elizabeth is in Nashville. Hi, Elizabeth. How are you?

33:15George Kamel:I'm going to steal your line and say that I'm very blessed. Hi, Dave and George.

33:19Dave Ramsey:Hi, how can we help?

33:22George Kamel:So following the total money makeover, my husband and I are doing very well with money. We are net worth millionaires, and we're actually making our last payment on the mortgage tonight.

33:33Dave Ramsey:Yay! Way to go!

33:36George Kamel:Thank you. But here's the issue I'm having. Even though we're doing well, we have lived so frugally for so long that I'm struggling to feel like I can spend any money. So if we are managers of God's money, how can I feel more free to enjoy spending the money we've worked so long and so hard for? How can I flip that switch in my brain?

34:01Dave Ramsey:Well, it's probably not going to be a switch. It's probably going to be a muscle that is rebuilt, that is atrophied. Your spending muscle has not worked in a long time. And so you've got to build that muscle back up again by doing some spending. And how do you do that and not freak out? Well, the way I do that is ratios. I'm always saying, okay, if we do this, does it really matter? Is it really going to hurt us? Okay. And so what is your household income?

34:35George Kamel:It is$138 ,000 a year.

34:37Dave Ramsey:Okay. All right. And so if you spend$10 ,000 and you just completely waste that money, it doesn't affect your life at all.

34:48George Kamel:No.

34:50Dave Ramsey:You can afford that. Okay, so I don't know. And I kind of got to get that in my head. Now, I'm not going to set out to waste money. That's not what I'm saying. But if you're doing something that you're not used to doing, it emotionally feels the same as wasting money. Like, for instance, let's just say you booked a cruise for$10 ,000. And you haven't spent that kind of money on travel in the last 15 years because you've been frugal, okay? Okay. That's going to feel that's going to like shock the system. Right. Emotionally. And so you've got to practice doing that, spending an amount of money, an increasing amount of money that doesn't affect you.

35:32Dave Ramsey:Now, I'm not suggesting if you make one hundred and thirty grand that you go out and blow one hundred grand. I'm not saying that, but I'm going to figure out an amount of money that's a ratio. And, you know, Sharon, I look at each other and go, it doesn't matter. If we do this and it's all it was a horrible decision. It's still OK. You know, and so we can that gives us the freedom to travel or to buy an item or an experience or spend that amount of money, whatever thing on a ridiculously nice dinner out or something like that. You know, that we used to couldn't do, but now we've lived like no one else.

36:10Dave Ramsey:So now we can live like no one else. And so now we're able to do those kinds of things, and it doesn't matter. It doesn't affect our generosity. It doesn't affect our net worth is not damaged. Our finances aren't irresponsible and out of control. But it's going to feel that way in your emotions because you've just not done it for a long time. Does that make any sense?

36:36George Kamel:It really does. It does feel like I would have to flex a really big muscle. I'm used to not even ordering drinks when we go out to restaurants. Yeah. And so the thought of buying a$3 drink feels like, ooh, that's a big purchase for me.

36:50Dave Ramsey:Yeah. So you need to kick that one up a little. You know, you need to start practicing some stuff like that. Okay. It's ridiculous if you're a net worth millionaire and your home is paid off that you can't enjoy a drink when you go out to eat. That's silly. Okay. Mathematically, that's silly. Okay. Yes. So you need to start practicing having that level of enjoyment. And then you need to accelerate it and buy an expensive bottle of wine.

37:19George Kamel:So it's okay to not spend because you don't want to. If you just want water, that's fine. But don't make it about, well, we can't afford this. That's what you're going to have to retrain your brain. And I'm frugal, but I've learned how to enjoy and spend. And a good spouse will help you do that because usually there's some opposites there. And so one thing I've done that is very tactical is I add line items in my every dollar budget. to force myself to spend on things that I think are frivolous. And then my wife keeps us accountable and goes, nope, you said you're going to spend$100 on fun money.

37:48George Kamel:Where did it go? Did you do anything you enjoyed? Show me the fun. Exactly. So both of you have a dream date, nice dinner, get an appetizer, maybe even a dessert, get a drink, and start dreaming about the list of things that we want to do, and then add it to the budget. Wow. Because you're really good at saving. That's a totally different perspective. How did you pay off the mortgage? You budgeted for that extra to go to principal, didn't you? Yep. And now you have to budget for the fun sides that you can avoid having this flat tire like Dave was talking about.

38:16Dave Ramsey:Yeah. And again, it just – we move to intentional. And so this is adults spending, not children spending in adult bodies. Okay? This is – and by intentional, I mean we look at it and we go, okay, it does not damage our ability to retire wealthy. if we order drinks with dinner. Okay? And it does not damage our, and so you can just kind of get used to that. And I got to tell you, Sharon and I have been, we've been increasing that in the last three years because it took us a long time to get those muscles built back because we lived like on beans and rice forever to get to the point where we didn't have to anymore.

39:03Dave Ramsey:And then you've got to just rebuild that mentality. But the difference is when we were spending before financial peace, we were doing it in a childlike manner, an immature manner with no thought as to the circumstances or no thought as to the whole picture. And now when we're doing it, it fits into the picture. So it's an adult viewpoint.

39:29George Kamel:Because you can impulsively spend$10 ,000 and you can intentionally spend$10 ,000. Exactly. And the latter is not going to hurt your wealth.

39:36Dave Ramsey:Well, and one of them is, you know, your level of enjoyment changes. You know, when you're doing it impulsively and with immaturity, you get a rush right as you're doing it. When you're doing it intentionally, you savor it all the way through. Yeah. And so you enjoy the trip at a different level.

39:56George Kamel:With no stress on the other end of, oh, gosh, why did I do that? You did it again.

39:59Dave Ramsey:Trip didn't follow me home.

40:00George Kamel:You always do this. Why did you go into debt? You shouldn't have swiped that card. And so the way Elizabeth is doing it, using debit, using cash, you got a paid for home. Now's your time to live and give like no one else. And I also think they're paying off the mortgage tonight. So they've still been in that.

40:13Dave Ramsey:Yeah. Oh, by the way, you need to do something tonight. Celebrate. Celebrate tonight. I mean, push the submit button from a white tablecloth in a fine dining establishment, kiddo. I mean, you need to celebrate this. You don't sit at home and drink water while you pay off your house. Okay. That's not. No, no, no. We need to have some fun with this.

40:34George Kamel:I wish I knew where they were going. I'd call the staff and say, bring them a cake on us to celebrate.

40:39Dave Ramsey:Bring them a bottle of wine on you. There we go. Add it to Dave's tab. Add it to George's generosity list. Yeah.

40:46George Kamel:I thought a cake would be more or less expensive. I know you did.

40:49Dave Ramsey:I need to live like no one else. I upped your game for you.

40:52George Kamel:You know, Sharon Ramsey and I, we had her on Smart Money Happy Hour, and it was hilarious. And we talked about frugality a lot. And Sharon, at her core, is a frugal person. Oh, God. But in other areas, she's happy to spend. And so how have you guys managed that over time? Because you're still the free spirit spender in the family. No, I'm not.

41:10Dave Ramsey:You're like a nerd spender. I'm a nerd spender, yeah. It's the beautiful combo.

41:14George Kamel:Yeah.

41:15Dave Ramsey:Because you like your toys. You have your hobbies. Yeah. Sharon will blow$6 ,000 on a purse, but make me eat mayonnaise. It's five years past the expiration date. That's the best. That's the part that hasn't ever gotten to fit. The freezer is still good, Dave. That's right. The leftovers are a constant argument still. You just can't get rid of that one. So I make enough money, I don't need to eat leftovers. I'm sorry. I'll just get it. That's a stance Dave takes. It's a thing.

41:43George Kamel:But, you know, she's cooking for two.

41:45Dave Ramsey:And I'm just saying.

41:45George Kamel:There's going to be leftovers. George, you're not supposed to take her side. I'm coming over to eat the leftovers, Sharon.

41:51Dave Ramsey:You are. You're going to have to if you start this crap. I'm going to make you do it. That's how this is going to work.

41:56George Kamel:It's a good discussion, though.

41:57Dave Ramsey:It's a wonderful discussion. And it happens a lot. Thank you. Our point is that everyone faces this. And the good news is you did learn how to be intentional. And now all you've got to change is your intentionality towards your generosity and your enjoyment, not just building wealth.

42:20George Kamel:Yeah. It's hard to move, though, from that scarcity to abundance mindset, even when you have the abundance. It does take a lot of training. It is. And that budget is what helped me personally to make it really tactical and force myself to build that muscle.

42:32Dave Ramsey:Yeah, put that in your every dollar line item. Yep, in your every dollar app. That's the hack. That's the one. Good, good call, George.

42:58George Kamel:You know what makes a summer party great? Good friends, cold drinks, and great food. But you know what can bring the party down? Spending way too much money to make it all happen. And that's why I get my summertime grocery hauls at Aldi. They've got USDA choice meats, fresh organic produce, and all the stuff you need for an epic or low-key backyard barbecue without breaking the bank. There's no better feeling than good eats at low prices. So stop paying more and shop at Aldi, where they have the lowest prices of any national grocery store. Find a store near you at aldi.us. That's A-L-D-I dot U-S.

43:33George Kamel:Savings based on regional analysis of Aldi versus select competitors. Prices may vary by location, product availability, and the market.

43:51Live from the headquarters of Ramsey Solutions, it's The Ramsey Show, where we help people build wealth, do work that they love, and create actual amazing relationships.

44:07Dave Ramsey:I'm Dave Ramsey, your host, George Camel. Ramsey personality, number one bestselling author, is my co-host today. The phone number is 888-825-5225. Danny's in Chicago. Hey, Danny, what's up? How's it going, Dave?

44:24George Kamel:I was just calling because I've been working baby steps for a couple years, and I'm back to square zero, and I just feel like giving up, and life has gotten really hard in the last year, and I just wanted to do a few advice you can give me.

44:41Dave Ramsey:What do you mean, back to square zero?

44:45George Kamel:Well, I was on baby step two. paying off my debt smallest to largest and but I ended up losing my job on July 1 and and so I was down to one job and and I left I spent through my emergency funds covering my cost of living you know protecting my four walls and that's gone and I'm just waiting on my first paycheck from my only other job.

45:13Dave Ramsey:Why'd you lose your job?

45:15George Kamel:So I was a pastor, and unfortunately the church just didn't have me in their budget anymore.

45:24Dave Ramsey:And you didn't see that coming? You didn't know that was going to happen? It caught you off guard?

45:32George Kamel:I had no insight into the finances of the church. That wasn't part of my job.

45:38Dave Ramsey:I mean, there was no warning at all? I was given about a 45-day notice. Oh, okay. All right. And so what is the job that you still have?

45:53George Kamel:So every summer I pick up a job lifeguarding, and right now I'm working anywhere between 80 to 85 hours a week, open to close, as many hours as I can get. I'm seasonal, so I don't make overtime pay.

46:07Dave Ramsey:but it's just enough for me to live off of. Yeah, what are you making? What are they paying you?

46:14George Kamel:My take-home pay after taxes is about every other week or so,

46:21Dave Ramsey:just over$2 ,000. Okay, so you're making$4 ,000 a month. Roughly, but that job is going to end here at the end of the summer. Yeah, I got that.

46:34Dave Ramsey:But so why would you, if you're making$4 ,000 a month, you can't live on that?

46:39George Kamel:No, I am preparing for the end of the summer when I don't have a job.

46:43Dave Ramsey:No, no, you said you went through your emergency fund to keep the four walls open. Why would you do that? Yes, sir. If you're making$4 ,000 a month, why would you need to do that?

46:54George Kamel:Because when I was pastoring, I was only working for them about 10 to 20 hours a week. I wasn't able to up my hours until after I was let go from the church.

47:08Dave Ramsey:Okay, so why did you not schedule the 80-hour work weeks beginning the day that the church—because they gave you 45 days' notice. So why did you not sync these things? You left a month in between or something?

47:23George Kamel:No, sir. I let my boss know, and she upped my hours as soon as she could. and maybe they're scheduling about a month in advance.

47:29Dave Ramsey:Oh, okay. All right.

47:30George Kamel:Okay. How much debt do you have? I started with$200 ,000, and I'm down to just about$120 ,000. Good job.

47:41Dave Ramsey:All right. And what were you making as a pastor?

47:44George Kamel:I was making about$35 ,000 to$40 ,000, depending on how I was working. Sometimes I would pick up extra hours for them.

47:54Dave Ramsey:Okay. All right. So what's your plan in the fall? What are you going to do for income?

47:59George Kamel:So my game plan is to go back to McDonald's. That's what I did in my undergrad. And I'm trying to apply to 10 jobs a week. But I'm in the early stages of applying, and so I'm not sure where I'm going to succeed there.

48:16Dave Ramsey:Okay. I'm sorry. You're going to work at McDonald's?

48:22George Kamel:uh it's some form of income for me yes sir um it's what i did in my in my uh undergrad yeah why would that be your plan though um why would you not have why would you not have a career plan what was your undergrad for uh mass communication and applied communication so why aren't you using that to have a career instead of just a job um i am working towards that, but I've got to finish up my master's degree before I can do that. I have a communication degree. I work here. Oh, yes, sir. You can work in media, PR, marketing. Yes, sir. My career goal was to be a pastor. And you told us your plan is to work at McDonald's, so we need to have some bigger goals since we did this undergrad.

49:11George Kamel:Yes, sir. What advice would you give me on how to utilize my undergrad? Apply for jobs. that are in the communication field that will pay you double or triple.

49:19Dave Ramsey:That pays$60 ,000 or$80 ,000 a year. Why would you go back to being a teenager? Yes, sir. Okay, so I think you need to think about a big career aspiration, start working towards that. I'm going to send you Ken Coleman's book, Finding the Work You're Wired to Do, and take the assessment. And I'm also going to send you his book, The Proximity Principle, on how to properly apply for jobs. just filling out applications will not get you hired in today's digital world. Okay. It's a waste of time to just fill out applications. Okay. So instead you have to create connections and move in a direction you want to go.

50:00Dave Ramsey:But don't, don't, you've got a little bit of time until the end of the summer. Let's use that time wisely to not be so desperate. and already have, out of desperation, already have dumbed down your life to McDonald's. It sounds like you're scared and you're just running back to the last thing you knew that was comfortable. And so what we're trying to do is give you some, you know, I think you're a whole lot better than you feel like you are right now. And so, and this pastoral, the loss of the pastor's job has hurt you emotionally. because it's what you always wanted to do, and now you can't do it.

50:43Dave Ramsey:So at least at that place. Maybe there's some jobs in the pasture that are out there. Maybe there's some youth pasture jobs or something like that that are out there that you can get into. And so I don't know what it is you're looking for, but I think McDonald's is a desperation move. I'm not putting it down because it's McDonald's. I'm putting it down because it's a desperation move. and I just think you can do a whole lot more towards your future and that's what I want you to aim at and that when you get the income situation and the career thing stable and moving again instantly you're going to get back in the saddle you're going to start reducing your debt again but right now your goal is to get enough income coming in and to get and to get in the proximity of people doing the type of things you need to be doing in communications and pastoring or whatever it is.

51:33George Kamel:So if fast food is not your solution, a master's degree, not your solution, you're just going to be overqualified at that point and definitely not get the job. And so you need to focus on what you can do now with the degree that you have, with the skills that you have. And I think you just need to get your mojo back after you got knocked down.

51:48Dave Ramsey:You landed a job as an associate pastor of some kind. So do it again. You did it once, do it again. This time do it with a church that actually has a little money to pay the bills. and you know that that's what i'm looking for here hey man keep at it i think you're better than you feel like you are right now that's what we're trying to tell you

52:40George Kamel:Let's be real. Buying your first home can feel like reading Ikea instructions upside down. It's confusing and stressful. And you have no idea if that cam bolt is supposed to go there. And if you try and buy a home with some click and go lender, well, good luck because you're just another line on their spreadsheet. So here's the thing. When I was buying my home, I didn't want to just be a loan number. I wanted a relationship with a real person, someone who was willing to answer all of my questions along the way and understood my goal of paying off my mortgage fast. And that's why I love Churchill Mortgage.

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54:04Dave Ramsey:Patrick's with us in Chattanooga. Hey, Patrick, how are you? Hey, Dave, I'm great.

54:10George Kamel:How are you?

54:10Dave Ramsey:Better than I deserve. What's up?

54:13George Kamel:Hey, thanks for taking my call. I'm 28. My wife's 27, and we bought a duplex last year for$325 ,000. We live in one side and round the other. We've paid the mortgage down to$166 ,000, and we're throwing really large sums at it each month, and we have a 6.5 % interest rate. We've got about$190 ,000 invested, and$110 ,000 of that is in a taxable brokerage account. My wife is super debt-averse. She's been that way since taking financial peace in high school. And even with the progress we've made, the mortgage just stresses her out. She wants to cash out the brokerage. it'd be about$106 ,000 after taxes to pay most of the house down so we can finish paying the rest in roughly six months.

55:00George Kamel:And then after that, we plan to put the large sums currently going towards the house back into investing on a regular basis. Another thing I should mention is we're considering starting a family. And when that time comes, we're both on board with my wife staying at home and we've cut our income in half, paying off the mortgage quickly feels like a smart security. But I'm worried about selling the investments early. We're long-term buy and hold index fund investors and have never touched those accounts before. And we both realize how powerful compound interest is over time. And I really wouldn't like to lose the momentum if we don't have to.

55:39George Kamel:So I would leave the brokerage alone and keep paying large sums on the mortgage and be debt free in around 18 to 20 months and then shift all the money into you.

55:49Dave Ramsey:You definitely married well.

55:52George Kamel:Well, thank you. I would have to agree with you. In other words, she's right.

56:00Dave Ramsey:She's right.

56:02George Kamel:You lost the argument, Patrick.

56:04Dave Ramsey:And here's why, okay? Here's why. If we reverse engineer this, you would not do it. So let's pretend that, uh, you owed a hundred thousand dollars less on the duplex and you're in a process of paying it off that you'd already done all this. Okay. And you're in the process of paying it off within six months. And the opportunity came up to borrow$106 ,000 on the duplex at 6 % so that you could put it into an index fund. You wouldn't do that. She for sure wouldn't do that, but you wouldn't even do that. And that's the same thing that we're talking about. We just did it in reverse.

56:48Sure.

56:49Dave Ramsey:You see what I mean? I lost you, didn't I?

56:53George Kamel:No, no, I'm with you. I'm totally in tracking.

56:56Dave Ramsey:Yeah, so in other words, if you owed$100 ,000 less on the duplex today and you did not have this brokerage account, you would not go borrow$100 ,000 at 6 % against the duplex to put it in a brokerage account for the same exact reasons you would cash out this brokerage account. And you're not going to lose any ground. You're going to be fine. You're still going to be multimillionaires. And here's why I know that. Number one, you have a propensity to save. Number two, you're very, both of you are very, very intentional about these things. Number three, you're aligned and you're not doing things against the, both of you are talking about this and you're coming into alignment before you do things.

57:38Dave Ramsey:These are all the key things we have in all of our data points of people who become wealthy. spouses that work together and that are aligned and that talk through these things together, which you guys are, people who live on less than they make and have a forward-thinking mentality about saving and investing, which you are, and people that hate debt, which both of you are. She just hates it a little more than you do.

58:04George Kamel:Yeah, we definitely talk a lot about these things, and that's really why I'm calling. Yeah, you guys are amazing.

58:11Dave Ramsey:You're a power couple, man.

58:14George Kamel:Thank you. I appreciate that. We've asked friends and family, but some of the friends and family we've asked don't have a paid-off house.

58:21Dave Ramsey:Yeah, they're behind you. And so don't ask broke people about finances. I mean, that's just so no. I mean, you guys, you're a power couple. You have all the data points of somebody that's going to be worth$10 million probably in about 15 years from now.

58:38George Kamel:And I can help crunch the numbers here to give them some hope. But let's say they're throwing nine grand, it sounds like, with the principal and interest plus the extra based on all the numbers he was telling me. So let's say you cash out the brokerage and you start back at zero a year from now. You pay off the mortgage. We freed it up. Now we're investing all of that. From age 29, because you're 28 right now, to age 65, 10 % return, nine grand a month. You'll have$37 million at 65. I think we're going to be okay.

59:05Dave Ramsey:Yeah. You've got plenty of time. So my 10 million wasn't far off 15 years from now.

59:10George Kamel:Yeah.

59:10Dave Ramsey:Yeah. So that'd be 45. Yeah.

59:13George Kamel:Exactly. And it's because of the reasons you mentioned.

59:15Dave Ramsey:They have a great income. They know what to do with it. They're being very intentional. Those are the things that we try to teach people to do that we can't get them to do, to work together, to be aligned, to have discussions about big things like this. And did you notice his tone and his sentence structure all indicated he was actually just trying to figure this out? It wasn't defensive. It wasn't arrogant. It wasn't talking down about his wife. He said, you know, this is her viewpoint. She got this because of financial peace in high school. For you high school teachers that are teaching financial peace, thank you.

59:48Dave Ramsey:There you go. This is what you create,$37 million. This is what happens when you guys teach this class to these teenagers. Thank you. And thank you to you administrators that are buying it and putting it into your high school. That's what happened. But he's treating his wife's opinion and concerns with respect. Yeah. Not with disrespect.

1:00:09George Kamel:It wasn't, well, I'm right, and I just need Dave to justify my decision. He was honestly looking for the answer.

1:00:15Dave Ramsey:And that's somebody who's searching for alignment with their spouse. And that's what I mean. If you guys can get that stuff going instead of this, I'm dragging some princess or prince along with me that doesn't want to work and doesn't want to deny themselves, and I want my bass boat and all this other bull crap, you know, instead of these guys, they're living in a duplex. Yeah. One side of it. I mean, these guys, they have a lot going on. Your tenant is next door. Oh, God. Yeah, I mean, they're just impressive. Very, very, very impressive. Emily is in Denver. Emily, how are you?

1:00:57George Kamel:I'm good. How are you?

1:00:58Dave Ramsey:Better than I deserve. What's up?

1:01:03George Kamel:So just trying to figure out the right money moves. My husband just recently retired or will be retired as of August 1st from active duty military 20 years.

1:01:13Dave Ramsey:Wow. Tell him thanks for his service.

1:01:16George Kamel:I will. Thank you.

1:01:17Dave Ramsey:And thank you for moving around all over the world.

1:01:21George Kamel:Thank you. It was fun, though.

1:01:23Dave Ramsey:Yeah, I bet.

1:01:24George Kamel:um we have essentially doubled and then some our income in the last month wow how um so with him being retired he took a really good job he'll have his pension and his va disability and then i got a promotion wow what's the total income it will be about 316 before taxes awesome thank you

1:01:50Dave Ramsey:Jesus. I love it. What's your question?

1:01:55George Kamel:So we are actively paying down debt. In the last year, we've paid off about$42 ,000. Mind you, that's on the old income. I work two jobs. He has one plus his retirement and disability, and then he's got a hobby that makes a couple hundred dollars a month.

1:02:13George Kamel:I lost my father about 15 years ago, And when that happened, he was supporting me through college and life. I had been divorced and I was full-time college student. And, of course, when that money went, it was very scary. So I have an anxiety with not having a savings account because of that. How much do you have saved right now? My question, right now we have, because we just pulled money to pay down a bunch of debts, we have$12 ,000 cash and then we have his TSP. So that one's about 52. Okay, how much debt is left? If you include the cars and the solar, it's about 125.

1:02:53Dave Ramsey:Okay. Well, you just had an increase of 150, so let's just do that in a year.

1:02:57George Kamel:Right. If you take home, let's say, 18K and you live off of 5 or 6 and throw 10 or 12 at the debt, this thing's gone in less than a year. Yeah, take all of your increase and be debt-free in a year. Okay.

1:03:11Dave Ramsey:Way to go. This is so cool. Happy for you. That anxiety is going to be on soon. It's going to be a tough year, but going to be a glorious ending to the next 12 months. Yay. So you don't get to enjoy the races because you've got to pay back the mess for a year. And then you'll get to enjoy them.

1:03:26George Kamel:For the rest of your life.

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1:05:28Dave Ramsey:Our question of the day is brought to you by Y-Refi. If you're struggling with defaulted private student loans, Y-Refi offers a great solution to get you back on track for a low fixed rate and more flexibility, go to Y-Refi.com. slash Ramsey today. That's the letter Y-R-E-F-Y dot com slash Ramsey. Might not be in all states.

1:05:51George Kamel:Today's question comes from Ava in Indiana. My husband plays in a local band and does all the bookings as well as receiving and dispersing payment to each band member. For the last four years, all the checks have been written to him directly as the band has not had a business entity. Now the IRS thinks my husband and I earn an extra$40 ,000 a year. We met with an accountant who gave us a plan for moving forward, but because of how poorly things have been handled in the past, the IRS is hounding us for almost$25 ,000 in back taxes. Is it fair to ask the band members to help with paying back those back taxes, or are we on our own?

1:06:26George Kamel:Oh boy.

1:06:31George Kamel:I don't know that they can legally demand it. They can ask politely, and this could end the band, but I don't think they have any legal standing to require the band members to help them pay taxes.

1:06:42Dave Ramsey:No, it's on your husband for doing a piss poor job of running the thing.

1:06:49Dave Ramsey:It was cute until it wasn't.

1:06:55Dave Ramsey:I'm just wondering why your accountant accepted the IRS's deal here. I mean, I think you could go back and file amended returns in those other years. and you retroactively issue 1099s? And distribute 1099s. To the band members with him as the payee? Yeah, and then that does send it to the band members because they should have to pay their taxes on their part. They essentially got paid without paying the taxes. They got tax-free income, yeah, because they didn't report it, and he did. And how this went on for four years, I have no idea. Well, because no one was looking at it, that's why. They must have got audited or something is how they found it.

1:07:34George Kamel:Yeah.

1:07:36Dave Ramsey:So, yeah, I think you can go back and file amended returns and get it off of you. And I think that's what I would look at doing and let the other guys know, hey, you know, we were supposed to have sent you 1099s. We didn't. Sorry about that. But you have to pay taxes on income. You knew that. And you knew you got income. And if you didn't pay, if you did pay taxes on it, then you're in game problem. If you didn't, then you're going to have some tax due on that's going to come back at you for that. So, yeah, I think you're going to have to. I think that's what I'm going to explore doing. I know you can file amended returns.

1:08:09Dave Ramsey:What I don't know is if you can send 1099s three years late as a result of an amended return. I don't know about that. But I'm going to check with your tax person. I may get a new tax person because this one's not giving you much answers.

1:08:23George Kamel:I'm hoping they told them to make an LLC and open an actual business checking account. She said they got it figured out going forward.

1:08:29Dave Ramsey:You don't even have to have an LLC. You just got to keep up your books. and you have to distribute 1099s. You have to have a set of books that shows that I didn't keep all this money that I distributed. It was dispersed to the other band members. This business that we're running has expenses, and the expenses are the payroll, the contracted payroll. So, yeah, and so that's fairly easy. You can run it as sole proprietor. You can run it as LLC. The one's fine. Going forward, that doesn't matter, but the back tax thing is just due to you didn't show the expenses, But you've got checking. You've got checks that went out.

1:09:04Dave Ramsey:So you've got proof that the money was distributed. I think you need a new accountant.

1:09:10George Kamel:I'd get a second opinion.

1:09:12Dave Ramsey:Yeah.

1:09:12George Kamel:And I'm hoping all these guys are like grown men with jobs. It sounds like this is a fun side gig for them. So I'm hoping they have enough integrity and income to just help him cover this and then fix it moving forward. If I was the friend, I would do that.

1:09:24Dave Ramsey:Yeah, but I don't know that we have to give them a choice. I think you need to file 1099s, and then it's up to them to deal with it. Yeah. Because all we're trying to do is get the money off of you. The liability off of him. Yeah. And if we can get it off of you and it goes to them, then let them know, you know, you're going to get – if you hadn't paid taxes on the income I gave you, you should have, and now you're going to have to. That's the answer. It's not like do it out of the goodness of your heart thing. It's just you should have been paying – if he distributed the money, it was income, and they didn't claim the income, that's on them.

1:09:58Dave Ramsey:But if they claim the income, it makes it even that much easier. Yeah. If they didn't claim the income, now they get to claim it. Hello. They should have. I mean, if you're receiving money from someone, folks, for work, that's income, and you're supposed to put that on your tax return, whether you got a 1099 or not. And whether you like it or not, that's integrity. Yeah. I mean, that's just how it works. So I'm sorry.

1:10:20George Kamel:I'm just glad to see musicians making money. That's the most impressive part of this whole story. Just a grown man going, I'm going to start a band with my friends. We're going to make some fun siding money right there.

1:10:30Dave Ramsey:Well, they made$40 ,000 a year total among four of them. Yeah. $10 ,000 a year each maybe? Yeah. And they spent that on guitars.

1:10:39George Kamel:Yeah. That's all going back to gear.

1:10:41Dave Ramsey:James did. That's how it works. James did anyway.

1:10:43George Kamel:This is the curse of the creative is that they're not very business minded. They just want to make art and play the music.

1:10:51Dave Ramsey:Oh, yeah. I didn't think about that. You're exactly right.

1:10:53George Kamel:And so they go, business is, we're not going to worry about that.

1:10:56Dave Ramsey:Yeah. So what I would do, Ava, is I would go to RamseySolutions.com and I would click on Endorse Local Provider, Ramsey Trusted, ELPs for tax help and get someone to consider filing amended returns for those years and properly doing this and getting rid of the tax liability. Because the IRS is simply saying you haven't claimed the expenses or the income, so we're just going to stuff the income down your throat. So you need to go file admitted returns that show the expenses, which is the distribution of the payroll. And that's a 1099 issue. And you need to file the income. And when you do that, it makes the tax bill go away, except for the part that your husband actually did make, which would be roughly a fourth of this, I suspect, it sounds like.

1:11:46Dave Ramsey:Amy is in Los Angeles. Hi, Amy. How are you?

1:11:50George Kamel:Hi, Amy. I'm well. Thank you so much, you guys, for taking my calls. So appreciative of what you guys do. Thank you. Okay, thank you. So I have an inheritance from grandparents. May they rest in peace. I inherited$163 ,000. I was on baby steps three when I got the inheritance. So I plan on tithing, obviously, a certain amount and setting aside, you know, automatically filling up that emergency fund that I had been working on.

1:12:21Dave Ramsey:Good.

1:12:21George Kamel:My question is, with the rest of the money, so I'm a mom of a five-year-old. I'm currently single, and we live with my mom. My son has been asking for his own room for about a year now. So I have basically five options, and my goal in this phone call is to seek godly counsel as to what I should do. Since I have that inheritance, putting a down payment on a house would be awesome, but in L.A., I don't want to be house poor with a high mortgage. I was thinking possibly just renting with my son somewhere in LA and investing that money. I heard that maybe I could do that, invest it, you know, for more for long term.

1:13:01George Kamel:And then I was thinking I could also just change careers so that I'm less tied to Los Angeles and possibly look into, you know, moving to a more affordable area. There's also my mom offered for us to build an ADU with that money on top of the garage so my son and I can be here with my mom and my grandmother. It's just the four of us. I was also thinking maybe doing a duplex. So I was really looking forward to getting some godly counsel on how to honor the memory of my grandparents with this money and use it in a wise way.

1:13:34Dave Ramsey:How heartbreaking is it to change cities and change careers? That sounds like the best option.

1:13:40George Kamel:yeah it's that's a little pretty heartbreaking difficult um my extended family is in the LA area but most most importantly my it's basically just me my mom my son and my grandma and she's tied in LA so it would be um she works in LA and uh yeah she works here she has three more years until retirement. So that's like a, that would be a huge move. I don't know. I don't know that I could handle that. But that is something that I've been praying about.

1:14:15Dave Ramsey:That's the best move for you and your child, with the exception of it breaking your mother's heart and your grandmother's heart. Can they, could they leave LA and join you wherever you go upon retirement three years from now?

1:14:27George Kamel:Yeah, possibly. Let's talk about that.

1:14:30Dave Ramsey:Do not, I don't want you to rent your life away trying to stay near your grandmother. Okay. Okay. And I, and I don't want you to build onto their house for sure. Absolutely. Don't do that. So the one I like best is the move. What do you think? Yeah.

1:14:46George Kamel:That gets you to home ownership faster, which was the big goal you stated there. Gets you to sustainability versus the down payment in LA. That's not going to get you very far. As you said, that's a lot of home you got to buy.

1:14:56Dave Ramsey:Yeah. And you know, it doesn't match. The only reason you're there is mom and grandma.

1:15:05Thank you.

1:15:37Dave Ramsey:Well, this isn't just another summer sale. The Summer Black Friday sale at Ramsey gives you the tools that help you win with money, relationships, career, all without blowing your budget. You can check back every day because we're dropping new deals all week long. This is the week. It ends on Friday. We've got products like audiobooks and e-books, questions for humans, decks, the Get Clear assessment, merch, books and books and books, Go to RamseySolutions.com slash store if you're wanting a deal, or if you're on YouTube or podcast, you can always use the link in the description. Sale ends on Friday, July the 18th.

1:16:14Dave Ramsey:Judy is in Canada. Hi, Judy. Welcome to the Ramsey Show.

1:16:18George Kamel:Hi, Dave and George. How are you?

1:16:20Dave Ramsey:Better than we deserve. What's up? Hi.

1:16:24George Kamel:So I have a question, and I was hoping to get some of your insight on my question. So my father had presented an opportunity where I could invest in a home with him. Currently, I have, I would say, a significant amount of debt. And I wanted to know what both of your thoughts are on doing that, whether it's not a good idea in general, if I should pay the debt off and then think about doing it later.

1:16:46Dave Ramsey:Why would you, a grown lady, buy a house with your dad? That sounds kind of like you're going back home or something.

1:16:54George Kamel:So I currently live at home now, but we rent. How old are you? And that's, again, that's why I was kind of, I'm 28.

1:17:01Dave Ramsey:Okay.

1:17:01George Kamel:So I finished. So your plan is to be 48 and living with your dad? Well, absolutely not. So his thoughts were that we can, you know, I'm planning on moving on the next couple of years, but the goal was to pay off some of my remaining law school debt. Once that gets down to zero, I would leave, and presumably he would find a way to get me off the mortgage, and then from there he would take over just paying it off. You're assuming he can take the mortgage on his own, which right now he can't. What makes you think he will in the future? Yeah, so that's my concern. Like, I don't think he can, and I'm thinking about not doing it.

1:17:39Dave Ramsey:This is a trap.

1:17:40George Kamel:It's akin to him buying a car and saying, hey, will you co-sign? It's going to be great. It's an opportunity. We can both own this car. Yeah.

1:17:47Dave Ramsey:No thanks.

1:17:50George Kamel:Yeah, and I was curious if you guys have any maybe tips or suggestions on how to navigate that conversation. Like, I know it's something, I think he's had a vision of wanting to own a home, but my concern is I don't want that to be on, kind of, on my back and at my expense down the road.

1:18:05Dave Ramsey:Yeah. I wouldn't even go there. I would just say, yeah, thanks, really. I really appreciate you thinking enough of me to give me the opportunity to do this, Dad. But after thinking about it, I think I really just want to work on getting my law school debt clear, and I don't really want to get in the home ownership thing right now. But thank you.

1:18:24George Kamel:Okay. I appreciate that.

1:18:26Dave Ramsey:And here's the thing. Less is better in this conversation. If you get nervous about it and keep talking and talking and talking, you're going to say something that's going to do harm. Just make it very brief and concise. Dad, I love you. Thank you for thinking of me on this. I've thought about it. I want to work on my law school debt instead. I don't really want to have that hanging around, and I'm going to have to pass on this one, but thanks for offering it. see that was like 15 seconds there not four and a half minutes don't if you do four and a half minutes you're not going to land the plane and the whole thing is going to crash yeah and it

1:19:05George Kamel:sounds like he's a good salesman and so he's probably going to have some objections and over want to overcome them and so you got to be careful just circle back to yeah but i thanks but i thought

1:19:15Dave Ramsey:about it and i really i'm just gonna i'm gonna work my plan on getting out of debt that's all and just keep going back to that. You don't need to explain to him anything about him. It's about you. It's about I have this goal, and I'm going to work on this goal. It has nothing to do with you. It has nothing to do with the – I mean, I'm not – it's not that I'm afraid you're not going to be able to pay it off or get me out of it or anything like that. It just sounds – but between you and me, Judy, this is a trap. He doesn't mean for it to be, but you're going to get stuck in this. Don't do it.

1:19:48George Kamel:Yeah.

1:19:48Dave Ramsey:Okay? Please don't do it.

1:19:51George Kamel:Yeah, no, for sure. I appreciate that.

1:19:53Dave Ramsey:Okay. All right. Hey, thanks for the call.

1:19:56George Kamel:I've seen a lot of these on the show, Dave. You've seen probably 4 ,000 more. I've never seen them work out. No, they don't work out. Where everyone's happy and no one's relationship was strained because of it.

1:20:05Dave Ramsey:Well, here's the thing. A lot of times when you're looking at a decision like this, if you'll do two things with the decision, both of them will probably tell you the same thing. One is go way out in the future and visit the decision and go, okay, you're 28. And that's what I did. When you're 48, do you want to be, no. Okay, there we go. That tells us we're on the wrong road, right? And the other thing you can do is expand the size of the decision and say, okay, if this makes sense for this, what if we wanted to do 10 houses together? Oh, no. Well, then one doesn't make sense for the same reason 10 doesn't make sense.

1:20:47Dave Ramsey:you know and so if you if you add scale to it and you add time and distance to it and it doesn't make sense that tells you that you're thinking short term the only time it makes sense is in the moment and moment in the moment is always a bad decision financially you always have to think long term um and that as zigzagler used to say you know people that think long term so millionaires have library have big libraries uh poor people have big tvs you know that was what he always said let's say i was thinking now versus long term so you're always thinking long term long term long term and uh you know to keep going on that thread for the rest of you out there not just judy's sake but the um you know one of the favorite studies i ever saw was when i first started the show 30 years ago i ran into this and they ask people about giving and um they they ask someone um a child or they ask a child about giving and the child uh their experience with giving and they described receiving something oh and then they ask a young person about giving and they tell the time that they gave 20 to the homeless guy and then they ask the old person about giving and they talk about a lifetime of steadily tithing at their church.

1:22:08So it means something different when you've got this longevity to it.

1:22:12George Kamel:Your stage of life and the perspective.

1:22:14Dave Ramsey:And in the same sense, the same types of research is like they ask wealthy people what blocks of time, what vision do they think in? They think in 10 and 20 and 30 year blocks of time and poor people think in terms of thank god it's friday because they're worried about food worried about lights we're about you know party the party on the weekend and uh but but wealthy people thinking okay when i do this how's it gonna affect me 10 years from now how's it gonna affect me 20 years from now and so they buy a different kind of car a different way when you're thinking 10 years out then you're thinking how's it gonna feel friday friday is a completely different car than 10 years from now.

1:22:57George Kamel:Yeah. Well, and when you think about the short term and an opportunity, that always is a trigger word for me. I go, oh, there's a red flag coming up here. When they say, I have an opportunity to do something that's going to harm me in the long term.

1:23:08Dave Ramsey:That's a word that just, yeah, that word should throw up pyrotechnics. Yes.

1:23:12George Kamel:And so you think about the short term benefits in those cases, but rarely do you think about the long term consequences, which is this question. What happens when? What happens when she moves out and meets a nice man? And now she goes, hey, dad, I need to get out of this situation. I need my money out. Well, he's got to now refinance and afford it on his own, or he just refuses, and now you've got a situation on your hands.

1:23:34Dave Ramsey:Yeah. And it's your dad. How do I make my dad home?

1:23:37George Kamel:Now you break the relationship.

1:23:38Dave Ramsey:How do I put my dad in the street? Well, you don't ever get in a situation where you have to make that decision. That's what you're saying.

1:23:45George Kamel:And he's using her as a proxy to accomplish his goal, whether intentionally or unintentionally, which is only going to hurt this relationship and turn it into a transactional one. So for a lot of reasons, I don't like this. On top of crippling law school debt, let's not get into an investment property while we're trying to clean that up.

1:24:04Dave Ramsey:For real. And that this is a trap. Yeah. But you're right. That word opportunity. Hmm. I have an opportunity. Yeah, maybe.

1:24:14George Kamel:It's a needle in a haystack on this show for you to tell us you have an opportunity. And we go, yeah, no, that's a great opportunity.

1:24:19Dave Ramsey:Yeah. Occasionally that happens. But yeah, there we go.

1:24:23George Kamel:Oh, boy. Tread lightly when it comes to family and real estate and finances. We've taken a lot more calls lately about that, and it's become more of a relationship discussion than it is financial. And it's boundary conversations. You have a lot of those. It's toxic in-laws that want to force you to do something. It never ends well. So just we tell people, stay away. Keep your family as family, not as business partners. Works for me.

1:25:00so

1:25:18Dave Ramsey:buying and selling a home is a big deal and you want an expert in your corner fighting for you to get the right deal at the right price. That's why we only recommend Ramsey Trusted Real Estate Agents. They're hand-picked pros who know their stuff, listen to your needs, and have your back from the first call all the way to closing day. To find a Ramsey Trusted Agent near you, visit RamseySolutions.com slash agent. RamseySolutions.com slash agent.

1:25:59Dave Ramsey:Live from the headquarters of Ramsey Solutions, it's the Ramsey Show, where we help people build wealth, do work that they love, and create actual amazing relationships. George Camel, Ramsey personality, number one bestselling author, is my co-host today. Tripp is in Houston. Hey, Tripp, welcome to the Ramsey Show.

1:26:23George Kamel:Hey Dave, thanks all for taking my call today

1:26:26Dave Ramsey:Sure man, how can we help?

1:26:28George Kamel:Well I've got an interesting situation I want your advice on My wife and I are young In our early 30s We're very fortunate, about to make our first million And she's a dentist Working in her mom's practice In September we're going to be buying half the practice We're very happy about that However, there's a space Next to their office That's been vacant for a while And we're thinking of buying the office space, renovating it for a specialist, and maybe hiring on a specialist to this business so that we can – there's a lot of referral cases that go out that we're sort of losing the revenue on. And we think that if we could have a specialist work in the office, we'd be able to capture that revenue.

1:27:11George Kamel:But I'm torn because there are a lot of issues that we're not comfortable with about hiring on a specialized employee and also using debt to expand the business. I mean, we'd have to take probably a seven-figure loan out to do this. So I was hoping as a successful entrepreneur you could give me a bit of guidance on this.

1:27:30Dave Ramsey:I'd pass. Yeah.

1:27:34George Kamel:You think just stick with the way the business is going?

1:27:37Dave Ramsey:Yeah, well, I don't mind expanding the business, but I'm not expanding it with debt. Because 100 % of the time that you do something with debt, you magnify your mistakes. And obviously, we don't see mistakes when we're doing it. And so, I mean, anything that can go wrong will here. So how long has your wife been a dentist?

1:28:01George Kamel:She's been working for four years now.

1:28:04Dave Ramsey:Okay, so she was not in practice in 2020.

1:28:08George Kamel:That was her graduation year. That's right.

1:28:10Dave Ramsey:Yeah. But her mother was. Yes. Yeah. You think you want to survive 2020 with a seven-figure loan? I don't.

1:28:21George Kamel:Yeah, that's one thing we've talked about is they've not really seen a slowdown in their practice. Yeah. Well, they did in 2020.

1:28:32Dave Ramsey:There was nobody coming in to get their teeth cleaned in 2020, buddy.

1:28:38George Kamel:Yeah, I think they did okay. They did okay during COVID, but obviously there was definitely a slowdown. And then another thing that I've – No, honey. No, wait a minute. I'm sorry.

1:28:50Dave Ramsey:You really don't believe that, do you? Okay. Dentists in the middle of COVID did not do okay. Their income evaporated for a period of time. No one went to the dentist. in the middle of COVID? Zero. Think about it. Now, I don't know what period of time that was in Houston, Texas, whether it was a three-month period of time or a two-month period of time or an eight-month period of time. And Texas opened up faster than a lot of people did. But these are the types of things you face in business from time to time. Now, COVID was a highly unusual experience, and I'm not predicting that in the future.

1:29:34Dave Ramsey:But my point is, is that when your plan can't survive negative consequences in the marketplace that you can't control something like a COVID, then your plan's a bad plan. And that's why you don't borrow seven figures to expand a business.

1:29:50George Kamel:Absolutely. You mind if I ask just one more follow-up? Sure. So imagine that we had the cash on hand to not take a loan out and do it all. So hiring on a specialized employee, what do you think are maybe some pros and cons to that?

1:30:08Dave Ramsey:Well, the pros are that you're dealing with a wonderful team member, hopefully, if you get someone that's culturally aligned with you and that believes in running a business the way that you believe in running a business and so forth. But the pros are that typically when you're dealing with a highly specialized employee, you're dealing with somebody that's smart. So they're easier to work with than dumb people. So that's the pro. The negative is that the referral flow might not be like you think it does. And so I'm going to try to figure out – I'm going to do some detail. If I own this practice, I'm going to do some detail.

1:30:53Dave Ramsey:Before I did this with cash, I would do some detailed analysis of exactly how many referrals we've sent out and exactly what they were worth. Not just this vague feeling of, oh, we send a lot of business over there. Okay, great. But let's look at exactly what that is. So I'll give you an example. We built this building in 2019, and we were making the decision of whether or not to put a cafe in here. because Ramsey spends a ton of money on food. And that was our feeling. When we actually investigated at the other place where we didn't have a cafe and we were bringing in catering all the time for different things happening inside the building and with clients, with each other, meetings that needed to have, you know, Chick-fil-A or whatever, when we actually added up the actual accounting of what we spent on money, it made the cafe decision easy.

1:31:50Dave Ramsey:by looking at actual data, okay? So you might look into this, and the referrals are so juicy, and there's so many of them, that hiring the specialized person, when you actually have the data in front of you, it makes it a no-brainer. Yes, we've got to do this once we can save up the money to pull this off, okay? But no, I'm not borrowing seven figures to do anything in business, period. You knew that before you called Dave Ramsey. So that's not newbie.

1:32:19George Kamel:How are you guys purchasing the half of the business? What's that going to cost? That's also a loan. But the extra income as an owner, our increase in income pays them on the loan and also gives us about a 50 % increase in take-home.

1:32:35Dave Ramsey:Well, and take loan. Yeah, it goes to the loan. You don't get to use any of that money. You have to put it all on the loan because you've got to get this loan paid off really, really fast. Is this a seven-figure loan as well?

1:32:50George Kamel:It's going to be about$800 ,000. Good God.

1:32:53Dave Ramsey:And how much student loan debt does she have left?

1:32:58George Kamel:We are just about done with the student loan debt. I think there's something like$80 ,000 left on it, and it's actually a 0 % loan, her parents.

1:33:07Dave Ramsey:Dude, you are in love with borrowing money like nobody I ever met. We're almost done. $80 ,000 is almost done? Oh, but it's zero. It's$80 ,000 in debt. Yeah. You have no perception of debt equals risk, and you are in a danger zone for that reason. Debt equals risk. More debt equals more risk 100 % of the time. And until you get that right, you're about to trip over yourself and make a mistake here, a bunch of them in a row. So, but the answer to your question earlier is once you have the cash, once you get all this paid off, the$880 ,000. God, I can't breathe.

1:33:56Dave Ramsey:No, just don't do it.

1:33:58George Kamel:I hope you continue to out-earn all the decisions you've been making. I really do. You're making a million dollars this year. You better keep living like you make a hundred because it's going to be a grind to get out of this. Man.

1:34:11Dave Ramsey:Wow Dentists borrow money like nobody I've ever met They make Congress look frugal Ouch, that scares the crap out of me, y 'all This is the Ramsey Show

1:34:48Dave Ramsey:Hey, everybody. Our summer Black Friday sale is here. Here's how it works. Each day this week has a new deal. This isn't just random stuff. It's the books, merch, and products that help keep you fired up for your goals. They give you the encouragement and hope you need. So if you're sick and tired of being sick and tired, now's the time to get tools that really work. Check back daily so you don't miss the deals. Go to RamseySolutions.com slash store today. RamseySolutions.com slash store.

1:35:29Dave Ramsey:If you're tired of living paycheck to paycheck and feeling like you can't get ahead, Join one of our free every dollar trainings. These are new trainings on how to handle money every week this month. And they're hosted by one of the Ramsey personalities. George is doing some of it. This Thursday I'll be doing one. This Thursday. Join us. Going to show you how to stick to a budget and even find the average is$9 ,000 in margin when you go through this. That's like a$9 ,000 head start. I like this. Using every dollar. So you can get out of debt, start building wealth, be in agreement with your spouse, things start working, and you can ask us any question during the live Q &A.

1:36:07Dave Ramsey:It's almost like calling in on the show, except easier. Sign up for free at everydollar.com slash webinar. And George will be with you this Thursday. Nick is in Dayton, Ohio. Hi, Nick. How are you? Good.

1:36:21George Kamel:How are you today?

1:36:22Dave Ramsey:Better than I deserve. What's up?

1:36:25George Kamel:so i work for a small company pays really really well but the fortune side it doesn't have any 401k no investing anything like that and i'm just so last halloween my mother passed away and she literally had nothing and i just when that day inevitably comes for me i don't want my kids to have to go through that amen you know finance and everything like that yeah i'm sorry um thank you and I'm just, what would you recommend? I have a general idea on how everything works, but what do you think would be the best bet for... Are you married? Yes, married, two kids.

1:37:07Dave Ramsey:Okay. You can both do Roth IRAs for$7 ,000 each. How old are you?

1:37:14George Kamel:32.

1:37:15Dave Ramsey:Okay. So you can put$14 ,000 a year into two Roth IRAs between the two of you. So that's more than$1 ,000 a month. What's your household income?

1:37:27George Kamel:Around$8 ,000 a month.

1:37:29Dave Ramsey:Okay. All right. And so, you know, that gets you a long way. Are you fighting through any debt first?

1:37:37George Kamel:No, debt free other than our mortgage.

1:37:40Dave Ramsey:Good for you. All right. And you have your emergency fund in place? Yep. Okay. Then what we teach folks is to try to get 15 % of their income going into retirement. And so if you're making$8 ,000 a month, you're making$100 ,000 a year, That's take-home pay, right?

1:37:56George Kamel:Yes.

1:37:56Dave Ramsey:Okay. So you're probably making like$130 ,000, right? Correct. Okay. And so, you know, we need to get this to about$17 ,000, but$14 ,000 is two of those. Does your wife have a 401k at her work?

1:38:09George Kamel:She will. She is in between jobs. She is currently being hired on to a government job.

1:38:16Dave Ramsey:Okay, good.

1:38:17George Kamel:Or a federal job, I guess you would be.

1:38:19Dave Ramsey:Yeah, I would do a couple of Roth IRAs and just go to RamseySolutions.com and click on SmartVestor Pro. And that's the people that we recommend. We're not in the investment business, but these are the people that we've checked out. And they have the heart of a teacher and they'll sit down and teach you how to do this and put it together for you. And to teach you, put it in good growth stock mutual funds. We suggest you spread it across four types. It's what I do. It's what George does. Growth, growth and income, aggressive growth and international. four types of mutual funds, and you can spread those, you know, these two Roth IRAs across that very easily and start investing steadily.

1:38:58Dave Ramsey:You can have that automatically drafted from your checking account. And it's just every month it's just going to, you know, your money's going to come home and then you're going to, it's going to come out of your checking account as a budget item, right? Okay. And it's very easy to do, but you just need to learn a little bit about it from one of the smart investor pros. They've got the heart of a teacher and they'll, they'll walk you through this process, But you're going to retire with a lot of money if you do that and then add another, you know, a few thousand dollars over in your wife's 401k at the new place and you'll be at your 15 percent.

1:39:29Dave Ramsey:And then you start working on baby step six, pay off the house, right?

1:39:32George Kamel:You said you're 32? Yep. Okay. I crunched the numbers for you. From 32 to 65, if you just invest that 15 percent, you guys never get a raise, which would be very unlikely. You'd have four million in that one account. So I want to give you some hope that you can break the cycle that's been in your family. And I think you guys are going to do that based on the way you're talking in this call.

1:39:55Dave Ramsey:And if he's half wrong, you've still got$2 million. And he's not half wrong, I'm telling you. So that's what steady investing does from$32 to$65. Okay. Yeah, you're going to be wealthy. And, you know, so, you know, it stinks the way you got your wake-up call, but the good news is it woke you up. Right. So, yeah, make that call. Get on Ramsey Solutions. As soon as you get off the phone, get on RamseySolutions.com.

1:40:26George Kamel:There's$4 million on the line. Let's get this done.

1:40:29Dave Ramsey:Yeah, click on, you know, get you a SmartVestor Pro in your area that you like. You and your wife sit down with them and begin a relationship that lasts 20 years, 30 years with your financial planner of sorts here. And the SmartVister Pro will walk you through this and show you exactly how to do it. And, you know, yeah, you're doing really good. And the good news is you caught this in time. You know, you still got a lot of time on your side.

1:40:56George Kamel:Yeah. And the simplest strategy is five words. It's match beats Roth beats traditional. So if you have an employer match, take that first, then go to all your Roth options. For you guys, that would be the Roth IRAs, then move to traditional. And if you run out of buckets and you still haven't hit 15%, then you can move to a non-retirement account if need be to do your investing. But that's a great problem to have.

1:41:15Dave Ramsey:Yeah.

1:41:16George Kamel:If you've maxed out all of those accounts.

1:41:18Dave Ramsey:The eighth wonder of the world, Albert Einstein said, compound interest.

1:41:22George Kamel:It's amazing because I just said$4 million. Only a half million of that was the actual contributions that he's going to invest. Did you pull that up on our site? I did. So we have the calculator on our site. The investment calculator, rambysolutions.com. It might as well be my homepage. I use it so often. That's how much of a nerd I am, Dave.

1:41:39Dave Ramsey:It worked pretty good. I like it.

1:41:41George Kamel:I like when math gives you hope. When math makes you hopeless, it's not fun. But when it gives you hope to show, oh, if I just keep this up over a long period of time, I'm going to be very wealthy. But most people only see the short term and go, what's 500 bucks going to do if I invest?

1:41:54Dave Ramsey:The first time I saw that, I have a finance degree, for God's sakes. But the first time I saw that, I was in my 20s, and I was working. And I went, oh, God.

1:42:05George Kamel:The power of compound growth?

1:42:06Dave Ramsey:A hundred bucks a month, and I can be a millionaire. I mean, really? Yeah, because it personalizes it. It's me. I can do this. It changes everything. Jessica is in New York City. Hi, Jessica. How are you?

1:42:22George Kamel:Good. How are you? Thanks so much for taking my call.

1:42:24Dave Ramsey:Sure. What's up?

1:42:26George Kamel:um so i recently became partner of a law firm in uh january of last year and i leased my car prior to that and now my lease is up in december around august last year i became a ramsey fan and started doing the baby steps um and i'm curious i have a k1 and i'm curious what your thoughts would be should i continue to lease so i could get the tax write-off or should i go ahead and and purchase a car in cash for this next car that's coming up.

1:42:54Dave Ramsey:We got to work on this Ramsey fan thing part with you.

1:43:00Dave Ramsey:No, we're not leasing a car. It's the most expensive way to operate a vehicle. And a tax write-off doesn't make it smart. You understand if you get a tax write-off for$10 ,000, it saves you$2 ,500 in taxes, right? You give the lease company$10 ,000, it saves you$2 ,500. You're stepping over a dollar to pick up a quarter. Yeah. So we're, no, we're not keeping a tax right off. It's trading dollars for quarters. What are you driving, Jessica? I'm curious.

1:43:25George Kamel:Sounds like a nice ride. Mercedes. Oh, boy. What are you making a year? $350. Okay. You're telling me you can't afford to just go outright buy a Mercedes in cash? Well, I'm on baby step number two, so I took everything in my savings, and I brought it down to$1 ,000 so I could pay off a boat. Pay off a boat? You've got all kinds of toys.

1:43:49Dave Ramsey:Yeah, good for you. I'm proud you're getting out of debt, kiddo, and part of you're getting out of debt is you're going to turn the lease car in and figure out something to ride in until you can save up the money and get clear at Baby Step 2 and buy you a good car. You make enough money to not be broke, and you're on your way out, but let's not stay in debt, and a lease is a debt.

1:44:06George Kamel:You've already made partner. You've got no one else to impress. You've made it to the top. So what car you drive into the parking lot, who cares? Yeah. You own the place.

1:44:17Dave Ramsey:Congratulations. Congratulations. You're doing really well. You're on a good track, though, and no, we're not going to stay. A car lease is the most expensive mathematically, the most expensive way to operate a vehicle. It's horrible.

1:44:29George Kamel:It's just a really expensive car rental business where you prepay all the depreciation with a bunch of restrictions. That's one way of looking at it. That's accurate. Doesn't sound fun. It's accurate.

1:45:00We'll be right back.

1:45:23Dave Ramsey:Hey, everybody. Our summer Black Friday sale is here. Here's how it works. Each day this week has a new deal. This isn't just random stuff. It's the books, merch, and products that help keep you fired up for your goals. They give you the encouragement and hope you need. So if you're sick and tired of being sick and tired, now's the time to get tools that really work. Check back daily so you don't miss the deals. Go to RamseySolutions.com slash store today. RamseySolutions.com slash store.

1:46:08Dave Ramsey:Laura is in Seattle. Hey, Laura, what's up?

1:46:12George Kamel:Hi. Thank you so much for taking this call. Okay, so I'm calling because I was laid off almost two weeks ago, and it was a bit of a surprise. We had our second child set to start daycare in August, and they required a full month's tuition and deposit, like, last year, like, when we knew she was going to be born soon. And so that was paid, and I knew that was nonrefundable. So anyway, oh, I should also say we are in debt and we have like student loans and we've been doing baby steps and using the EveryDollar app. So, you know, right now, EveryDollar is important to us. And so anyway, we decided to give notice right away on the day that I got my layoff notice.

1:47:00George Kamel:My mom, grandma said she could help watch the baby. and I just decided to enroll her for one month in August and then withdraw her at the end of the month which falls into their 45-day withdrawal notice terms in the contract. Based on our friends who are lawyers they said this should all be good and the deposit would go towards the first month and the last month's tuition and that's yeah$3 ,400 which is a lot for us. Anyway talked to them after some emotional back and forth realized they were not going to budge on this. They demanded that we had to enroll her for a second month in September, at which time there would be a whole week off for a holiday, as well as a$350 increase in tuition, which I just was not willing to take the chance based on the job market.

1:47:52Dave Ramsey:I'm sorry. Wait a minute. I'm sorry. I got lost. the contract said that you could go in August and half of September and they're not abiding 45 days withdrawal notice okay it was July 2nd and so we were going to be able to withdraw August

1:48:10George Kamel:31st and then our deposit would pay for the last month's tuition which in our case would also be first month's tuition anyway um it was emotional and it kind of uh why was it emotional not to um well based on the contract we uh we just we had planned this and we just didn't think there was going to be a problem so why are they thinking they don't abide by the contract that's my question exactly and and so it was really um i was really confused why they weren't uh they were saying that it said something else and we asked some lawyer friends and they said we were right. So I kind of sent this, you know, I tried to be as professional and clear as possible.

1:48:58George Kamel:I sent a last email, included the board and said, this is done. And I knew that I was really emotional because of the layoff and I have two babies at home and I just wanted to end it there. My husband and I were getting really emotional over it. And, you know, I just wanted to like, I guess, protect our peace. And I just knew that we could just unenroll and eat the deposit. However, we have a lot of friends, both lawyers, Christian, non-Christian, who are all like, that's a lot of money. You should fight them for it. And I'm just trying to figure out if it's worth it. It's just not worth it. Okay.

1:49:33George Kamel:Easy answer. I mean, it's going to cost you that much in retainer fees to get the money back. Right. Okay.

1:49:40Dave Ramsey:You need to burn your calories getting in a new job, not fooling with daycare, like people that you don't want your kid with anyway.

1:49:48George Kamel:Right. If you can't trust them, then I don't trust my kid with them. Exactly. I mean, it's sad because our first child was there and we loved it. So this is so. Now you don't know,

1:49:57Dave Ramsey:I don't love it because I don't like the people that run it. If the people that run it are mean, I don't want them watching my kids.

1:50:03George Kamel:Yeah. Yeah. Okay. So one more question. We had someone say you should, because it's a breach, you should just say like, we're going to leave a review, like a Google review unless you give a surgeon's closet back. I don't know if I like that. How do you feel about that?

1:50:21Dave Ramsey:That's fine. I mean, the truth is that they didn't go along with the contract. And if you lift the truth in a Google review, you know, and you've got email proof of that. But, you know, the point is I'm not sure why it matters.

1:50:36George Kamel:Well, that's what I was wondering. You know, the amount just feels like a lot.

1:50:40Dave Ramsey:Do you think you call those people or you email those people and you say, hey, I'm going to leave a trash review on you if you don't give me my money back since you breached the contract, since you didn't go along by the contract. You think they're going to send your money back? I don't.

1:50:54George Kamel:Yeah, I don't either, I guess.

1:50:56Dave Ramsey:So then you just leave a trash review. I mean, I don't think you're going to get your money back here. I really don't. I don't think these people are going to give you your money back. You don't either.

1:51:05George Kamel:All right. I think you'll leave the review to vent and they probably won't do anything. They might respond to the comment and defending themselves publicly so that the internet can see it. But I don't think threatening them over the phone saying, I'm going to leave a review if you don't. Again, like today's point, I don't think you're going to get anywhere with that.

1:51:21Dave Ramsey:If I thought it would give me the money back, I would, but I don't think it will. Based on the other interaction.

1:51:29George Kamel:That makes sense. Yeah. Yeah. Thank you for that. Maybe your friends take it on pro bono to help you out. I don't know. I know, right? They go, hey, we're just going to write a letter saying here's what the contract states. It sounds like their interpretation of the contract is different than yours.

1:51:41Dave Ramsey:Yeah, but it doesn't matter. You're not going to put your kid over there in August anyway.

1:51:44George Kamel:Yes, correct.

1:51:45Dave Ramsey:I'm not letting my kid go over there. No way.

1:51:48George Kamel:Yeah, yeah. This is a blessing. That's helpful.

1:51:51Dave Ramsey:You discovered bad people were getting ready to be watching your kid. And so it's a good thing that this worked out this way. So, yeah, go get you another position and find some other child care, make other arrangements for child care, and go on with your life. and dadgum, I hate this, I'm sorry. It's just very inconvenient. But it turned out great because otherwise you'd had your kid over there. Oh, my God. And then what would you have discovered two years later? You know, oh, man. No, thank you. No, it's really, really good. So, wow. Myra is with us in Virginia Beach. Hey, Myra, how are you?

1:52:30George Kamel:I'm doing good. How are you?

1:52:31Dave Ramsey:Better than I deserve. What's up?

1:52:33George Kamel:All right. Okay, so basically I'm on baby steps two. in trying to pay down debt. Now, my question is, I'm using the snowball method, but the question is I have personal debt as well as small business debt.

1:52:47Dave Ramsey:Your small business debt is personal, too. You signed for it personal.

1:52:51George Kamel:100%. So that's my question. I have been solely focusing on the personal.

1:52:55Dave Ramsey:It's irrelevant.

1:52:57George Kamel:It's all personal. So I should take the whole picture and apply the smallest. How much business debt, in quotes, do you have? too much roughly about 65 and it's including a very bad choice that I made last year in buying a new car thinking I was getting a great deal because my husband works the dealer yes terrible decision this is for the business correct you have a car for the business exactly what kind of business is this uh tech fix repair center um computer cell phone uh technology replacement

1:53:38Dave Ramsey:like screen replacements computer repair gaming system cool sell the car yeah i know i knew you

1:53:44George Kamel:were going to say that you're saying your husband works at the dealership he works at a car dealership yeah can he get you unhosed out of this deal you got hosed on uh i'm trust me i'm looking when'd you get it? I'm trying to figure out the best. I had it last year, July.

1:53:59Dave Ramsey:Okay. Is it brand new?

1:54:02George Kamel:Unfortunately, yes. I mean, I did get it$8 ,000. It doesn't matter. It's stuck in a loan. You know how the interest is. It was a terrible, terrible, terrible thing.

1:54:10Dave Ramsey:I definitely would undo the terrible. Sell the car for sure.

1:54:13George Kamel:Okay. So, yeah. So take, because it is considered all personal debt, so work on the snowball between the two.

1:54:21Dave Ramsey:Yeah. And how much personal debt do you have

1:54:23George Kamel:aside from the car and the other little business debt? Roughly about$12 ,000. So how much is the car debt?

1:54:37George Kamel:Well, when you factor in all the interest. No, I'm saying what's the payoff on the car, not the interest.

1:54:42Dave Ramsey:What's the payoff on the car?

1:54:45George Kamel:Roughly$27 ,000. Okay.

1:54:47Dave Ramsey:So you have$77 ,000. So you have$40 ,000 and other stuff on the business.

1:54:52George Kamel:Correct.

1:54:53Dave Ramsey:Okay. All right.

1:54:54George Kamel:So basically, we're trying to make better choices. So what's your household income? Yeah.

1:54:59Dave Ramsey:What's your household income?

1:55:00George Kamel:Household income combined is roughly 82 to 85.

1:55:04Dave Ramsey:Okay.

1:55:04George Kamel:But I've been working very hard. So basically, if you sell the car, you've got$50 ,000 in debt.

1:55:11Dave Ramsey:You make 85. Right. Yeah. And so you've got 18 to 24 months to be debt-free. Yeah. That's your plan. Sell the car for sure.

1:55:19George Kamel:Don't overthink it. Start attacking those debts. Small is the largest. Just get rid of this car. It's not the deal breaker in the business.

1:55:26Dave Ramsey:Yeah, it's not. No screens are getting replaced with this car, I can tell you that. Wow.

1:55:53We'll be right back.

1:55:57Thank you.

1:56:27Dave Ramsey:on everything to be successful, but you do have to focus on something. Amen. Morgan is with us in Wichita, Kansas. Hey, Morgan, how are you?

1:56:36George Kamel:I'm good. How are you guys?

1:56:37Dave Ramsey:Better than I deserve. What's up?

1:56:39George Kamel:All right. So I am 27 years old. I'm a teacher. And starting in September, I will have a raise to$50 ,000 a year. I'm still living at home in my parents' house in their basement, and I have no debt. I am starting a master's degree, but I have the cash saved up for that already. So the question is, is it wise to, now that I have this raise, to go ahead and take the jump to living in an apartment. Yes. Okay. So don't wait to save up for a house. No. Just jump right in. You'll be there for 28 years. Yes. You'll keep saving. You'll get comfy. Mama's cooking's good. The laundry is getting folded by someone else.

1:57:34George Kamel:And for that reason, I would fly the coop. Yeah. You're doing great. I told them I was out by 30, like hard, like hard. and but okay how about out by fall yeah you got this you what get some roommates if you want to get some gals and you know yeah and make it happen on your own i've struggled finding communities like so the roommate situations never actually worked out but it's finally able to where i think i can find an apartment i think i found an apartment that is in a safe area that i can actually afford.

1:58:08Dave Ramsey:Good. Good for you. Yeah, I think it's going to change your life.

1:58:12George Kamel:Yes.

1:58:12Dave Ramsey:It's the next stage in your maturity and your development, and it's going to affect everything else you're doing in a positive way, taking on the responsibility of being head of household. It's going to be wonderful for you.

1:58:27George Kamel:You work harder at your job. You get better at relationships. There's something that changes when you're on your own that is just good for you.

1:58:33Dave Ramsey:I'm excited for you. It's time.

1:58:35George Kamel:And you'll get to home ownership. I have no doubts.

1:58:37Dave Ramsey:Oh, no question. You're a planner and you're a teacher. Thank you for doing that, by the way. Very cool. Sarah is in Oklahoma City. Hi, Sarah. How are you?

1:58:47George Kamel:I'm fine. How are you?

1:58:49Dave Ramsey:Better than I deserve. What's up?

1:58:52George Kamel:I've been doing the rain food plan for several years. I was diagnosed with a disease that was going to make our house not feasible for me. Everything was upstairs, so we were going to have to change. We looked around for something, and there was nothing that was not going to be extremely expensive. So we opted for a heat lock, which I know is against your rules, but it was the cheapest that we could do. And so now I'm wondering, what baby step am I on? Is a heat lock actually baby step two or four?

1:59:29Dave Ramsey:Well, how much is it?

1:59:33George Kamel:I had$50 ,000 saved up.

1:59:36Dave Ramsey:How much is the HELOC?

1:59:39George Kamel:The HELOC is$67 ,000.

1:59:41Dave Ramsey:Okay. What do you guys make?

1:59:46George Kamel:About$110 ,000.

1:59:48Dave Ramsey:Okay, it's a mortgage then. It falls in Baby Step 6. Okay. The rule we use is if it's less than half your annual income, we put it in Baby Step 2. But it's more than half your annual income. And what's your first mortgage balance?

2:00:05George Kamel:$21 ,000.

2:00:07Dave Ramsey:Okay. And what's your interest rate on the HELOC?

2:00:12George Kamel:6.2, I think. And my mortgage is 3.1.

2:00:17Dave Ramsey:Yeah, you haven't got any mortgage. You've got$21 ,000. Okay. Do you have any other debts?

2:00:23George Kamel:Not only that we have. No, we have no other debts.

2:00:26Dave Ramsey:Okay. I'm going to plow through both of these pretty quick then. even though they're baby step six.

2:00:33George Kamel:That's my plan.

2:00:35Dave Ramsey:Because you don't have much balance here. So, I mean, 80 grand and you own this house, right?

2:00:40George Kamel:Right.

2:00:41Dave Ramsey:Or 90 grand, really. Not 88. So, yeah. Yeah, I'm going to get after that. That's what I'm going to do really, really quick. Emma's in Minneapolis. Hi, Emma. How are you?

2:00:52George Kamel:I'm great. How are you?

2:00:53Dave Ramsey:Better than we deserve. How can we help?

2:00:56George Kamel:Awesome. Okay. Okay, so my husband and I, we're young, we're 21 and 22, and I know I've heard you say that you can pause investing for two years and save up for a down payment. I'm wondering, I want you to tell me exactly what you think we should do, because right now we are only investing about 4%, but we're saving the rest for a down payment. Should we stop investing completely for a down payment?

2:01:25Dave Ramsey:What's your household income?

2:01:28George Kamel:Right now it's flexible because we're both in college, about$50 ,000 to$75 ,000.

2:01:32Dave Ramsey:You're in college?

2:01:34George Kamel:Correct.

2:01:36Dave Ramsey:When will you graduate from college?

2:01:39George Kamel:We both have one year left.

2:01:41Dave Ramsey:Okay, and you're going to save until after you graduate and after you get jobs to buy a house?

2:01:47George Kamel:That's why we're both working right now.

2:01:49Dave Ramsey:But, I mean, you're going to—are you going to stay in the jobs that you're in after you graduate from college?

2:01:57George Kamel:um no okay we'll probably upgrade to yeah better paying yeah career job and maybe in the same

2:02:04Dave Ramsey:location and maybe not so yeah so do not do not buy until you graduate and do your job upgrades

2:02:11George Kamel:well we don't plan on buying for about two years okay all right i'm just making sure

2:02:16Dave Ramsey:that's part of the program here that's part of the no i would not buy a house while you're in college is what I'm saying. Yeah, I know.

2:02:23George Kamel:And even after that, it might be wise.

2:02:25Dave Ramsey:$75 ,000, so 4 % is$3 ,000 in a year. It doesn't matter. $3 ,000 is not going to make the swing one way or the other.

2:02:34George Kamel:Okay. Because, I mean, we could do 15%, but our goal is$100 ,000 for a down payment.

2:02:40Dave Ramsey:Yeah, but$3 ,000 is not going to make the goal. Yeah. You said you're saving 4%. Should I stop that? Yeah, yes or no. I don't care because it doesn't matter. It's not enough to matter.

2:02:51George Kamel:To get to that$100 ,000 mark or for compound growth, your income will increase, and your savings rate will be the key that gets you there versus a percentage. So you could do 0%, you could do 15%, and it's going to slow down your home progress. But at your age—

2:03:06Dave Ramsey:She's asking, should she stop doing 4 %? I would just keep it. It doesn't matter. Yeah, it doesn't matter. If you want to stop it, it's fine, but it's$3 ,000. $3 ,000 doesn't equal$100 ,000. so it doesn't get you to your goal by stopping. If you want to keep doing it, it's fine, too. It's three grand. It's not a lot of money. So you're going to get there, and your long-term goals, you're going to hit all of them, but this 4 % is not going to make or break this decision one way or the other. So you're right on track on that stuff. So, again, George, let's go back. So baby step one is save$1 ,000 to a beginner emergency fund or reduce all of your savings down to$1 ,000 and throw all of your cash, not counting retirement, at your debts.

2:03:48Dave Ramsey:Baby Step 2 is pay off all your debts, smallest to largest, using the debt snowball. Three is have an emergency fund of three to six months of expenses. At that point is when you would start saving for a down payment. And so what she's bringing up is what we always call Baby Step 3B. How much do you go on to Baby Step 4 and put 15 % into retirement, or do you put a little bit in or none in? It's completely up to you is what we say. And what you were pointing out is the more you put into your baby step four, the less down payment savings you have. Her amount that she could reduce her baby step four to zero, not put any towards retirement, would change the equation only by$3 ,000.

2:04:30Dave Ramsey:So that's my point on that. It doesn't matter. But our overall point is save up for a house as fast as you can. And they're going to do this very, very young. They're coming out of college. They're already making$75 ,000. between the two of them. And then they're going to come out of college, get upgrades and jobs, and they've got a good savings goal. So they have great long-term plans.

2:04:51George Kamel:I'll be very impressed. If they save up a hundred grand in two years, I mean, they're living like they're broke college kids, even after college. And so if you make that sacrifice, they're going to be homeowners by 23 and 24 in a good financial position.

2:05:04Dave Ramsey:With a strong down payment.

2:05:05George Kamel:So this is the benefit of working hard to graduate college debt-free with money in the bank, with a marketable skill and a job on the other side.

2:05:13Dave Ramsey:This is ding, ding, ding. Very well done.

2:05:16George Kamel:Poster children for how it should be done and a very logical, analytical question with the baby steps.

2:05:20Dave Ramsey:Yeah, very good. Always good to take your percentages and convert them to actual dollars. It helps you go, oh, that's the answer. I'm losing the match. It's three grand. You'll be okay. Yeah. You'll survive. It's not the end when you're 21 for sure. That puts us out of the Ramsey Show and the books. We'll be back with you before you know it. In the meantime, remember, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus.

2:06:07George Kamel:What if you could watch the Ramsey show before anyone else? Well, good news. Now you can. For the first time ever, you can stream the show a day early in the Ramsey Network app. That's tomorrow's episode, today. Real calls, real answers, real fast. It's free, it's easy, and the content might just change your life. So search Ramsey Network in Google Play or the App Store, or click the link in the show notes. You never know what calls, coming up next.