There’s No Fast Track to Financial Freedom
01:28:39 Share

from the Ramsey Network. It's the Ramsey Show where we help people build wealth, do work that they love, and create amazing relationships. I'm here with my good friend, George Camel. Good to have you here, bud. Excited to be here. Thanks for having me, Jay. Now you have a lot of options. Thanks for choosing me. It was nice to invite you on today. That's a lie. Well,

We're here to take calls. It's a live show. 888-825-5225 is how you get involved. I hope you do. Talking about your life, your money. Let's get right to the phone lines. We've got Amir in Irvine, California. What's up, Amir? Hello. Hey, what's up? How can we help? Hey, guys. I'm a big fan. It's really nice to be on the show. Glad you're here. What's going on?

Yeah, so I'm in a bit of a unique spot. I'm 18 years old and I'm actually, I trade futures. I'm a day trader and I've recently started making a pretty large amount of money and I just want help, you know, managing it correctly and making responsible choices. When you say you've been making a lot of money, tell us real dollar amounts.

Well, I've been averaging about 15,000 a week for the past five months. Okay. The past week, I made 25,000. Wow. What'd you start with?

So how I actually trade is I'm a funded trader. I'm actually treated as an individual contractor and the firm provides me with capital to trade with after they've evaluated me. So really I just paid for that evaluation fee which was only $150. So you're not investing your own money? No. How do you get paid? So they take commissions off my trades and then they give me the rest. So what's the rest? What do you get?

It's a 90-10 split. I get 90%, then they get 10%. Wow. Listen, lucky ducky. That's wild. Lucky ducky. And I say that on purpose because I feel like this is sheer luck going on right now. And I only say that because a lot of the statistics show that day traders, I mean, statistically, it's like less than 5%. 97% of day traders who persisted for more than 300 days lost money.

So you are, I have heard that you're not at the 300 day market. And truthfully, I have no ill will. I hope you keep making money, making money. Yeah. But the, the key that I would go is like, if this was Vegas, we'd all be around you going, dude, cash in the chips and walk away. All right. You literally, it's like you just won the lottery and now you're playing with other people's money, which does lower your risk. You're not putting your own money. But my bigger question is what are you doing with this $300,000 you've made in the last six months?

Well, I've got most of it sitting in my bank account. I still live with my parents, so I really don't have many living expenses. I'd

I'd say I probably only spend about maybe $1,500 a month. I've just been saving it up, and I've been planning on buying a nice car, but I don't know if that's the responsible thing to do. I would have like a house before you put all of your money in a depreciating asset to impress your friends. And trust me, they would be impressed. What's less impressive is invisible wealth, where you're like, well, it's in the equity of my very reasonable home.

Have you ever lived on your own before, Amir? No, never. I'm actually recently just turned 18. Okay. So I might differ with George only on timeline. Like, I think it's a good idea to buy a house, but maybe not yet. If I were you, my first goal would be like, listen, I'm going to get out of this house, my parents' house, and I'm going to go rent for a while. And I'd probably park that $300,000, like...

in an index fund and, you know, maybe look at your projection and say, okay, do I want to be a home owner in the next four years and the next five years, whatever that is, if it's five years or less, I'd probably put it in a high yield savings account. But if it's more than five years, I might park a good portion of it, you know, just in some sort of index fund and just wait until you're ready to do something. I liked George's idea of,

doing real estate but if you do buy a vehicle because you need one just buy something that's modest like i would not use this money as an excuse to inflate my lifestyle into such that's not real long term yet if that makes sense i think you'll be a successful guy we just don't know if you're going to make three hundred thousand dollars a year from here on out does that make sense

Yeah, yeah. I understand. It's not obviously a linear thing. I wasn't planning on buying, you know, a supercar or anything. I'm looking at a 2014 Mercedes CLS. It's about $28,000. And I was just wondering if buying that cash would be a responsible thing to do or not. What do you make outside of like, is this your full time job?

Uh, it is now. I used to do like gigs on apps like DoorDash and Inbreeds before I became profitable. Okay. And what did you make when you did that?

Well, it really depended because I was still in high school and then towards the beginning of this year, I was still in college. So I was only working about 20 hours a week. So maybe at most like $1,500 a month, but some months I'd go up to like $25. Here's the thing. I'm all about you buying a car in cash. I would treat this money like...

the windfall that it is. And so in that case, if you wanted to take some of it and buy a car, I'm not mad at that. Do you have any debt? I'm hoping not. No, no debt. Yeah, 2014, what would you say, George? I'm fine with it. I mean, it's reasonable. The parameter we look at is you don't want more than half of your income tied up in things with wheels and motors. And the truth is we don't know how sustainable this income is.

And so what I would caution you against is losing out on opportunity cost of, hey, $28,000 in a car that's going to be worth $20,000 a year from now may not be wise when I could put that into XYZ, an investment, a future home down payment fund, whatever it may be. So there's nothing wrong with getting a car. I think you're doing it in a reasonable way. You don't sound like a guy who's about to blow up his life to go flex on Instagram. I just know as an 18-year-old, that would be my temptation.

Yeah, I agree with George. You're 18. You have a lot of time to build wealth. And this is a really, really great head start as long as you don't lose it in the next 150 days. Yeah, this car to me doesn't sound super inflated. It kind of just sounds like, I mean, it sounds like what it is. You were playing at the tables, you got lucky and you got a lot of extra cash on your hands. But be really smart with it.

And you're good to go. Yeah, one last question. What do you want to do with your life? Let's fast forward five years from now. Let's say day trading does not exist anymore. SEC makes it illegal. You know, what are you going to do? Well, I'm actually currently in college studying biochemistry. My dream is to become a doctor one day. Hey, do you come from a Middle Eastern family? I do. I feel that as a Middle Eastern guy. Every one of my family is a doctor but me at this point, or at least in the medical world. This money sounds like med school.

Yeah, it does sound like med school. That would cover all four years. Hey, that might be the reason this money was put into your lap. Not to blow on cool stuff, but to fund med school completely debt-free. You know how much of a unicorn that would make you when you graduate?

Right. When all your buddies are bragging about like, oh, dude, I just took on another 50 grand in debt. I'm at 400 grand. Like this is the, these are the conversations my family now has. You know what I mean? Yeah. And so I'd love to see you set yourself up for a debt-free future. And to Jake's point, let's hold on and see what the future holds. And if it is med school, we've got it funded and mom and dad don't have to co-sign student loans to make this happen. That's pretty awesome. My guy got lucky. Yeah.

it really is the equivalent. Like you said, George to go into Las Vegas, somebody gets hot on the craps table and listen, I am the one telling them to roll again because I just love Las Vegas, but truthfully day trading, the stats are there. Like there, there's no arguing with that. If it,

For him, the good thing is it's not his money. And it's crazy that he gets to keep 90% of it. I don't know what firm is hiring 17-year-olds to do this bidding on their behalf. That sounds very sketchy. It's just the whole thing is sketchy. And I believe Amir. I just think it's wild. We've taken many calls on the show, Jade. People losing $30,000, $150,000, even $300,000 by day trading. So don't look at Amir and go, I'm going to be the next Amir. No, you're likely to be the next person to call in broke. I know. Amir got lucky. And lucky for him, he'll be able to...

pay for all of his med school in cash and be the first debt-free doctor. He created his own scholarship fund. This is The Ramsey Show.

You shouldn't own a gun you're not willing to shoot. In moments of self-defense a Berna launcher lets you protect yourself in a non-lethal way. That's exactly why Berna launchers were created. Everyone from parents and nurses to pastors and even special forces veterans rely on Berna to protect themselves and their families.

I own several burners myself. They look like guns, but they're not. They shoot a 68 caliber round kinetic or chemical irritant projectile that can disable a threat from up to 60 feet away. And they're powered by compressed CO2 cartridges. So they're classified with paintball and airsoft guns.

but they're more powerful than those for increased protection. Not to mention, Berna launchers are legal in all 50 states with no permits required. And because they're not firearms, they can be shipped directly to your door. Plus, Ramsey fans can get 10% off an exclusive bundle, which includes a Berna pistol, CO2 cartridges, and ammo. And other Berna products like safety alarms, defense sprays, and body armor are also

Also, 10% off for our listeners. Just go to Byrna.com slash Dave to learn more. That's B-Y-R-N-A dot com slash Dave.

You're listening to The Ramsey Show on The Ramsey Network. I'm Jade Warshaw. Next to me, George Camel, bestselling author, host of the George Camel YouTube channel, which is always popping off doing amazing things. George, good to have you. Thank you. You as well. Let's take some calls. We got Matthew who's in Nashville, Tennessee. What's going on, Matthew? Matthew, you there? Let's try it again. Are you there? Nothing. Can you hear me? Oh, there we go. There you go.

What's going on, man? Sorry about that. Not much. Long story short, I graduated college a year ago. I've been working at a pretty big corporation for the past year. They notified me a few weeks ago that I'm getting laid off in March. And in the meantime, I've actually gotten a job offer in Dubai. And I was wondering if I should take this offer. You know, worst case scenario, I stay out there for a few years and I don't have to pay any tax.

and just use that extra money that I'm not having to pay in tax as like a wealth building opportunity. Interesting. Is it the same line of work? No, no, it's actually, so I'm in a logistics role right now and this would be a sales role. Have you done sales before? No, I haven't. Interesting. And is it like purely commission or is there like a decent base pay to get you

No, the base pay is almost the exact same as what I'm making now, and then there'd be bonuses on top of that. And they said eventually they would like to try to make me a partner at the company. It was started by an American a few years ago in Dubai. How did you get this offer? I'm just curious. I mean, it sounds like a pretty sweet deal to offer someone with zero sales experience.

I actually met this guy in college at a bar a few years ago, and he knows I'm like really interested in Middle Eastern politics and I like to read and stuff. So he actually called me and said that this company was trying to bring in Westerners to represent them and work on a lot of their deals. And so he had me in mind and just gave me a call. And it was just purely coincidence that I'd just been laid off. How old are you?

I'm 24. Okay. Does this get you, taking this opportunity, does it get you closer to where you want to be in the next 10 years? Yeah, absolutely. I mean, just, I feel like saving the money alone from having to pay 0% tax. Have you looked into all the implications of taking a career outside of the States? I don't know. So I'm just asking, have you done the due diligence? Yeah. I mean, I've been looking into it. So pretty much the main stipulations are I have to stay out of the U.S.

For 32 days or less. Once I stay, once I'm in the U.S. for more than 32 days, I'll have to pay tax. Right, right, right. And then also if I make more than $114,000, I'll have to pay income tax in the United States. Okay, so that was my question. So your start is, is $114,000 you're starting or is it a little less than that?

No. So the actual base is 72. My current job that I'm getting laid off from, I'm making 74.6. And then with bonuses, last year I ended up making about 86. So my question was, Dubai is quite expensive, no? So I don't know if you're getting some sort of housing allowance. I want to make sure that... I think this is great. First off, let me say, I love adventurous people. I love travel. I've worked in over 92 countries, so I get it. I love that. Yeah.

Yeah. We're just trying to poke holes to hit every angle. Yeah. We want to make sure you're thinking of everything. So have you looked up, okay, like once I'm converting this money, how much it's going to cost to live and really what a budget and lifestyle would look like on that salary. And you got to account for the worst. Like you got to pretend you're new to this in 72,000. Like you could, that could be your year. You know what I'm saying? So have you done that kind of math and that kind of research? Yeah.

Yeah, absolutely. So I've been using different programs, talking to different people. Obviously, if I live in the Dubai Marina area, where the Burj Khalifa is, everyone knows that's going to be more expensive. But actually, in the suburbs area, it's pretty comparable to Nashville. It's not a little cheaper. And then from what I've heard...

And what I'm reading online is things like insurance are significantly cheaper, food costs, that type of thing. Just your day-to-day expenses are significantly cheaper. And the program I used was Numbio. Okay. And it said...

On average, Dubai is about 14% cheaper than living in Metro Nashville. So if you take this, that's good to know. If you take this, are you locked into a certain amount of length of time of contract? Or is it like if you get there and you're like, this is where the birds get me out, you can just turn around and go?

I mean, with the way, the way I understand the permanent residency in Dubai, while I'm in that process, which takes about six months, I'll be, I'll pretty much have to stay there for that six months. But after that, I would be free to go whenever. Listen, bon voyage. See ya.

Matthew's going to Dubai. I feel like I'm on Wheel of Fortune. We're going to send you. No, it sounds like I don't see any red flags here. If you've done your due diligence on the company, this seems legit. You want to make this move. You're young. Now's the time you can make this move without it affecting a bunch of other people like your family. And so if you were 38 with

six kids and be like, hey, let's pause before we do this move. But for Matthew, it seems like one of those things, it's a fun adventure. And if it doesn't pan out, he gets to say, hey, remember that time I lived in Dubai and got to experience that? It's pretty awesome. Best case it works out, he's partner at the firm three years from now. I hope that's the case. Thanks for the call. Let's go to Dane in Denver, Colorado. Dane, what's up? Hey, how's it going? Going good. Yeah, I had a

I'm glad I got you to, I, uh, absolutely love the show. So thank you very much. Um, all right. So, um, I guess I'll just give you my background. I have a question about, should I pursue building a second home? Okay. Um, up in the mountains here in Colorado. Okay. We got about two minutes. So get, get into it. Okay. All right. Yeah. I have, uh, 940,000 in, in my savings, in my retirement, I have, um,

Absolutely no debt. I own my current home, all my cars, everything. And I currently put 32% into savings right now. I wanted to know if I could knock that down to your recommended 15% and then take that extra money that I'm putting in extra in the savings to pursue the home. The home's going to be about $190,000.

I've already cash flowed the property, the septic, the wells, all that kind of stuff. Cool. Now I've just got to get the actual home. Yeah, how long would it take? If you went down to 15%, how long would it take to save up the $190 needed? I'm estimating like seven years. Whoa. That's a long time, man. It is. How old are you? I have two little kids.

I'm 46. Okay. So we're not going to touch retirement. Can you promise me that? We're going to use savings outside of that. So the question becomes, how do we make more in order to make this dream happen faster? Man, I do everything I possibly can. I have a good salary. I make $115,000. I have two side jobs. I'm actually starting up a little tutoring service.

to help people in my career. I have books that I've written. I gain revenue on. So, I mean, I don't know what else I can do. Is this like a vacation house or will this be a rental? What will this be for you? It will be a vacation home for me and my family. It's about an hour and a half into the mountains. It's my dream since I've been five years old. My biggest, and I feel urgency here, I have two little kids and I really...

want to get it done sooner than later so that they get to enjoy it. And that's the whole point. Right. I could wait seven years. My gut's, you know, telling me to do it now, but my brain's telling me, you know, be smart, cashflow it all, but I'll have, you know, an 18 year old at that point. And it's like, will it be worth it? Can you just go rent a place until it's done? And Hey, once a year, you guys go a few times a year, go rent a place up around there.

We do travel a lot. Um, that's, this is our, you know, the only thing that we actually splurge on is our, our traveling adventures and, um, um,

I mean, we do try to experience as much as we can. Yeah, I mean, you're right. You're 100% right. I do not need this. I would just split the difference and go, we're going to rent a place. We're going to move at the speed of cash. This is a toy. We're not going to go into debt for it. And truthfully, you got a 15-year-old a few years from now, they're going to be like, Dad, I don't want to go. I want to hang out with my friends this weekend. That's what's going to happen. So I don't want you to put this whole dream on the kids. Just say it's for you, and maybe the family gets to enjoy it too.

Not bad. Not bad. I don't know. One man's take. That's one man's take. It's a tough one, but I got to go with George on this one. This is The Ramsey Show. People tell me about their experiences with big banks all the time. Bad service, fees that nickel and dime them to death, and predatory lending that tries to catch them in never-ending cycles of debt. So if you're ready for a bank that puts people over profits...

Check out Fairwinds Credit Union. I recommend Fairwinds because they share our Ramsey values of helping people get out of debt and live generously. If you go to fairwinds.org slash Ramsey, you'll see the combined checking and savings account bundle they created just for Ramsey fans.

This account bundle is designed to help you take control of your finances and stay out of debt. And Fairwinds also has a great mobile app that's safe and secure so you can manage your transactions with peace of mind. Fairwinds has been helping people avoid big bank traps for 75 years.

So go to fairwinds.org slash Ramsey to learn more. It's easy to join no matter where you live. That's F-A-I-R-W-I-N-D-S dot org slash Ramsey. You're listening to The Ramsey Show, and it's that time again, tax season. Eww, eww, eww.

And one of the best things you can do for your finances is to have a really, really good tax pro in your corner, someone that you can trust. They're going to help advise you on the best moves to make for your situation or for your small business, especially if you've had some big changes in your life

this past year, you could really use a great tax pro. So if that's you, which it probably is, go to ramseysolutions.com slash tax pro to find CPAs and enrolled agents that have been vetted by the Ramsey team. Don't put this off. Do this. It's in your best interest. Pony up the cash. It's worth it.

All right, George, let's get to the phone lines. By the way, I'm Jade Warshaw, joined by George Camel, but you knew that. Let's get to the phone lines. We've got Hayden, who's in Bowling Green, Kentucky. What's up, Hayden? Hello. How are y'all? Doing good. How are you? All doing good. How can we help? I'm calling. I'm struggling. Well, not really struggling, but after all expenses and everything that's a necessity is paid, I have about...

$1,902,000 left a month, and I just don't know where it's going. It seems like I just spend it. So on paper, if you did what the paper said on what you spent, you'd have two grand, but you're saying it's disappearing. It's being spent.

Yes. Do you want to know what this is? This is a classic case. You do what is called the treat yourself budget, which is I budget for all of the things that are like necessities. Like I budget for my rent, my car payment, my groceries, you know, a couple of, you know, my cell phone bill, but everything else is up for grabs and you treat yourself. And then next thing you know, you're like, where did all, where did the money go? So does that sound about right?

Yeah, yeah, that does sound about right. Like if you go to your bank account statement, it will tell you, right? If you go to your bank account statement and you add up all the things that weren't the necessary expenses, it would easily tell you what's going on, right? Yeah. So what would you say are the top three things this money is disappearing to? Eating out? Are you sports betting? Gas station snacks? I do a little betting.

Uh, definitely gas station. Okay. I just guessed all three perfectly. You know what? I find that gas station snacks is a big thing. Like that seems to be a high ticket item here. I don't know what it is. I don't go in there. I'm too nervous. I don't go in the gas station to get food. There's two things that just shouldn't go together. I don't know. But anyway. Do you have any other vices? Are you like a dip? Something that you're spending? Vapes? I don't know.

No, I mean, I buy truck parts and different things. I mean, I dabble here and there spending. You single? No, I got a girlfriend. Oh, well, that might be where some of it's going, I would think.

Here's what I think you need to do. Okay, so A, I used to budget just like that. I was definitely the treat yourself budgeter who wanted to use the rest on, like it's up for grabs. That's the way I felt about it. You ate your vegetables, all right, you can get some dessert. But the truth is when you treat your money like that, you'll look up 10 years from now and there's a lot of regret because you go, oh my gosh, so much money.

passed through my hands and I was not a good steward of it. As a matter of fact, for most people, think about it. If during your working years, most people work 40 years, let's say you just make an average of $50,000 a year. That's over $2 million that's gonna pass through your hands.

And if you take this portion of it and you just go up, it's up for grabs. I don't know what happened to it. You can't really call yourself a good steward of your money. And chances are you won't be prepared when the time comes to retire or buy a house or any of those things that, you know, we want to do to feel the success of our finances. So,

What I would suggest is a zero-based budget, which is a form of budgeting that utilizes every single penny. And I just want to kind of clear up because a lot of people feel like budgets are kind of restraining, right, Hayden? And I have a feeling that you feel that way. Like you feel like a budget is something that's going to keep you from doing the things you want to do when really it's the exact opposite because, again,

If you were to do a zero-based budget, you'd not only be planning for those things like rent and car payments and keeping the lights on, but you'd also go through and say, wow, I have $1,900 of margin. What is it that I want to do? Do I need to have $1,000 of savings? Do I need to build up a three to six months emergency fund? Is there debt I need to pay off? And if you've already accounted for those things, then you can say, okay, yeah, I want to spend a little bit on hunting and I want to spend a little bit on, I don't know, Wawa snacks, whatever.

And so that's the beauty of this is you get to decide. So let George and I help you decide. Do you have any debt? I have a truck payment and then a boat payment. Okay. How much do you owe on the truck? Around $34,000. And how much do you owe on the boat? Around $12,000. Okay. So that right there is a good indicator of what you should be using that margin for. What do you make a year?

Oh, last year I brought in around $80,000, but this year I'm working full-time and doing college, so it's dropped about $10,000, $15,000. So you're making about $65,000? Yeah, give or take. Okay. Man, you got a lot tied up in wheels and motors going down in value to be making $65,000. Mm-hmm. Have you ever thought about selling these two items and getting something cheaper? Well, the truck is what I use to make the money every day. I

I drive for work. I do like hot shot. Can you get a cheaper truck to do this with? I don't think it's a $34,000 truck causing this. Yeah, I probably could. I mean, if you had a $15,000 truck that was running great, could you do the same work and get paid the same?

Yeah. Okay. That tells me the truck was for you. And yes, you do use it for work, but you can also get a cheaper truck, get out of this debt, free up more margin. And I imagine you don't have a lot of time to be on the boat when you're working and a full-time student. Yeah, I do plan on selling the boat this upcoming spring. What can you get for it?

oh probably around 15 okay 14.50 okay so that's another maybe two thousand fifteen hundred dollars that you could put towards this debt what george and i are getting at is and this is an old this is what dave ramsey would say your biggest wealth building tool is your income right and so good for you that you have two thousand dollars of margin every month bad for you that you have this debt because what are your payments on the truck in the boat combined

Oh, around $1,300. I could refinance them, but I've just decided to try and pay it off. Yeah, I think that's good. But think about if you had that $1,300 back in your wallet plus the $2,000. That's a lot of money. And so if we can get these things sold or paid off, that's really where you're going to see the ultimate potential with that money. And then we'd be saying things like, hey, with this margin, you could be investing 15%. And hey, you could be doing, do you see what I'm saying? Save up a down payment. Yeah.

Well, my only problem with that is like my parents, which I just turned 20, and they're more like, don't sell the truck. The insurance is going to blah, blah, blah. They're wrong. Hey, if you have a paid off vehicle, your insurance is going to be lower. If you have a used paid off vehicle, your insurance is likely going to be lower than if you had something that's newer with payments.

That's the truth. That's what I thought, but I don't know. Are they making the $1,300 payments for you every month?

uh no they don't they don't get a say in you getting rid of that payment because you're the one who has to pay it hey the truth is with parents like they have they have the best of intentions but sometimes they they only know what they know and so a lot of times it's like they do it one way so they pass that way on to you and even though it's a good intention it's not necessarily the right answer or the best way to do it does that make sense

Yeah. And so I think from where you're sitting, you can just be like, okay, thanks. That's when you just do the smile and nod and you're like, oh, okay. And then you go into your life and you do the thing that you know how to do in your own life. You can be kind and respectful. That's right. Do you have any money in savings, Hayden? My parents got around 30 grand for me. I had a problem with my arm and surgery, so I got a settlement coming in soon. Okay. And that'll be in your name. You said your parents have it for you. Yeah.

No, it'll be in my name. Okay. Man, that'll set you up for sure. Yeah. So if George and I were in your shoes, yeah, that 30 grand, I'd keep it aside. Let's call that if you're selling this boat and if you're selling the truck or deciding to keep the truck. That's an emergency fund plus some moving out money plus some down payment money. That sets you up, man. Yeah. I would definitely downsize this truck. I would not pay it off with what you're earning and what your life is. I'd downsize it. Yeah. This is the Ramsey Show.

If you need health insurance for yourself or your family, you might be lost in a maze of confusing terms, overwhelming options, and questions about networks, not to mention high costs and bad service from insurance companies that don't care about what you want. Common concerns like those are why I'm proud to recommend Health Trust Financial. They've been working with Ramsey for over 20 years, and they're the only Ramsey-trusted health insurance company.

health insurance broker. Health Trust Financial takes an unbiased approach to finding you the best health insurance for your situation. They listen to your needs and because they work for you, not the insurance companies, their service is free with no obligations and no pressure. Here's the best part. Health Trust Financial customers typically save an average of $500 a month

HealthTrust Financial is your one-stop shop for unbiased advice about health insurance options to make sure you don't overpay. So get out of the maze by going to HealthTrustFinancial.com today. HealthTrustFinancial.com.

You're listening to The Ramsey Show. Thanks for hanging out with us. I'm Jade Warshaw. Next to me, George Camel, taking calls all hour long about your life, your money. The number is 888-825-5225. This is a live show. So if you want to get in the conversation, all you have to do is call and we'll be there. All right. We've got Darren. He's in Minneapolis, Minnesota. What's going on, Darren? Hey, I'm good. How are you guys? You're great.

Great. Thank you for taking my call. So what I'm curious to get your opinion on is whole life insurance. I know that Ramsey Solutions is pretty adamantly against it and prefers term life. But my question is, do you have an opinion or knowledge on using it for infinite banking, specifically for a business owner?

A very brief backstory is I'm not a W2 employee. I own my own business. My wife and I are living and giving like no one else. We are so thankful to Ramsey Solutions for helping us get there and just setting the example of how to live and give for the Lord. Interesting. Yeah, and my business colleagues who I look up to are using the cash value in their whole life policy to

to continually borrow against to purchase real estate and grow their business. And I have never done that. We are a hard Dave Ramsey family. So this would be a new venture for me, but I'm curious if you guys have any knowledge on that. Can I ask you what's, I mean, you sound like a guy, like you said, you've kind of listened and followed it and it's worked for you to do things the Ramsey way. What's causing you to change course and say, well,

I want to borrow against a whole life policy.

That is a great question and I'm unsure and that's why I'm here. Um, I think partially because I know what we are doing works, but if I could be doing something that is both giving my money, uh, interest monthly, um, and I'm able to use that same money essentially to buy real estate and I'm able to deduct the interest paid, um,

I guess I don't know. Here's the truth. They're leveraging debt to do leverage real estate, and that's fine. It makes sense for almost nobody to do a whole life policy, especially as an investment tool. And think about this. Why would a whole life insurance salesman be pitching this as an investment tool?

to get you to buy their insurance. It's the only people who actually say it's a good product is the people who sell it, which should be a giant red flag. Yeah, they're getting paid for it. And then, you know, your business buddies, they see these TikToks and they're going, oh my gosh, they gave it a fancy name. Infinite Bank. It sounds cool, I will admit. Very intriguing name. Oh, isn't that the book? All it means is, yes, and there's a book. Nelson Nash?

Yes, I've heard of the book where they go, well, if you just read the book. How to be your own banker. How to be your own banker, and the concept is you're going to borrow against a policy. The truth is you're taking a loan from the insurance company. Your cash value policy is collateral. Right, exactly. So it's no different than taking out a HELOC against your house to go do real estate. Well, it's against cash instead of against my home. Equity. Equity.

But it's still... Right. But it's the same concept. It's going to have, you know, often variable interest rates. Sometimes the idea that you've got to have an interest rate low enough to even make the investment worth it, and you're adding a lot of risk and complexity to your life, all the while paying huge commissions for a low return product. And so here's what I would say. What is your goal? What are you trying to do? And let's figure out a better way to get there.

Sure. Well, for the record, we're buying and owner financing homes for $30,000 and less. Believe it or not, they do exist. Is that your business? Yeah.

Yes. Okay. And so far, you've done it cash? They are reasonably nice homes. Almost 100% cash. We have a couple $30,000 loans on properties. Okay. On a five-year term. That's why I did it, because it's five years and it's done. What's causing you to want to go different? Are you trying to just do more at once and go faster in your business? Are you looking to scale the business, essentially, and you're looking to debt to do it? Yeah.

I'm looking to scale the business as debt-free as I can. This has taken me from an opportunity to set up my family to really setting up my kids for their future, all while providing people homes that they can own and have for their kids. I mean, everybody wins. It's just, do I want...

Yeah. I, I, I struggle with taking out debt. I worked hard and I, everything's paid off and, um, I just thought this could be a potential opportunity, I guess. And I've had multiple, multiple guys that are very, very successful, um,

that use it. Here's the thing. That's what's confusing. I mean, here's the thing. People take out... It's not what caused their wealth, though. They're using it knowing there's risk involved. They have a risk tolerance and they're going, I'm willing to take this gamble. Yeah, people take out debt every day for businesses and some people do well and some people don't. I mean, that's just the truth. Somebody could pay cash for a business and that business could shut down, right? Like,

The way you're doing it is not necessarily going to cause you to be successful or to be a failure. However, when you do add that element of debt, you are adding an element of risk. So if you were already likely to succeed, now you're stacking more chips against yourself. And if you were already likely to fail, then you're just going to fail harder. Does that make sense?

Like that's the way that I see it. Really math and numbers kind of aside, I really just see it as adding risk. And do I need to add risk to an equation that was already working well for me? It was already building wealth for me. My answer would be no, I wouldn't do it. Yeah. I think Dave Ramsey should write a new book called Be Your Own Bank because Dave is actually his own bank.

And he's done it debt-free. And it wasn't a, I'm trying to do it debt-free. He just drew a line in the sand and said, I'm done. I'm going to build a business debt-free. I'm going to build a real estate empire completely debt-free. I'm going to move at the speed of cash. He could have moved a lot faster had he used debt.

But he had tasted the fruit of that tree, and it did not taste good going through bankruptcy back in the 80s. And so I would caution you against it. You can do what you want. I'm wishing you the best either way. But you said you're a person of faith. I can't get this out of my head, Jay. The borrower is slave to the lender. Wealth gained hastily will dwindle. Whoever gathers little by little will increase it. So I'm playing the tortoise on this one as a believer. And Darren, I hope you do the same. That's a very good point. That's very good. Yeah.

Business is risky as it is. Why add more risk? That's all I'm saying. Especially if I got a family now, it's like that adds a whole other piece to it. And so you can build generational wealth a whole lot of ways for your kids. I'm not doing it with a whole life policy. I mean, I just think about, let's say you've saved up. Let's play it on both ends. Let's say you've saved up, George, $1,000.

And you're like, all right, I'm going to go all in on this business idea that you feel that enough, like your own cash that you're kind of sliding those chips in the center to go, okay, I'm going all in on this because yeah, you can do your business plan and do everything. But sometimes businesses fail, like they don't perform the way you want and you will be out that money, that cash that you had.

Children recognize this. If a child works to make $10 to go spend at Chuck E. Cheese versus Mama Jade giving $10 to the kid and said, have fun, that kid's blowing that $10 in five minutes. Oh, yeah. Coming back for more. When you had to earn that $10, you're like...

oh, is skeeball worth another dollar? I don't want to cash this in quite yet. You feel it because you've earned it. That's right. That's so true. That's so true. My son just started on commission in the house. He's six years old. And so it used to be you go to Target, we give him money if he wants Pokemon cards. But now he does his chores. And he the first week because his payday is on Saturday. The first week he said, oh, I

I don't want to get paid. Just hold on to it for me. Because it was- Deferred comp is what he asked for. Yeah, deferred comp. He was afraid he'd spend it. Then after four weeks, finally, I was like, listen, you can be trusted with this money. You can give it, save it, spend it. And so he got paid. He got paid $10 for all of his chores.

And so he's just now, he's like, okay, I'm going to go and I'm going to buy. Much more thoughtful. Yeah. I think I'm going to buy Pokemon. First, he wanted to buy a fish tank. Then he wanted to buy Pokemon cards. He's like really thoughtful. Opportunity cost. Yeah. And it's true. It's such a small way of thinking of it. But now he's thinking of all the options he has. He's not just going in on the first idea he heard because it's like, what if I get this and I don't like it? I spent my money on it.

Gosh, I wish every American adult could have your six-year-old's wisdom. Because here's the thing. You turn 18 and they go, ah, just put it on the card. I know. You don't even think about it. Take out the HELOC. Let's infinite bank our way out of this. Oh, my God.

It's a different game when you go debt is not an option and it leads you to be more thoughtful with way more peace. Yes, way thoughtful. Oh my gosh. I will die on that hill. I will die on that hill too. I don't even, George, I've been on this life for so long. I don't even consider debt. Like it doesn't even come into my brain as an option. Why would I do that to myself? All right, that does it for this hour. Thanks for hanging out with me, George. Thanks for everybody in the booth. We'll see you next hour. This is The Ramsey Show.

This show is sponsored by BetterHelp. You've probably heard people talk about different kinds of flags in friendships and romantic relationships. Red flags, green flags, beige flags. Listen, it can be helpful to look for patterns or unsafe behaviors in potential relationships, but all those labels can distract from what's really important. Your values.

and whether you and your potential partner are willing to wake up every day and choose to honor each other's values. And look, I know it can be tough sometimes to even know what's important to you in a relationship. Therapy can help you figure out what your values actually are and decide your boundaries and your non-negotiables. And if you're thinking about starting therapy, try BetterHelp.

BetterHelp is 100% online therapy that works with your schedule. To get started, just fill out a short online survey to get matched with a licensed therapist. If it's not the right fit, you can switch therapists at any time for no extra cost.

So whether you're dating, married, building a friendship, or working on yourself, do it with help from BetterHelp. Visit BetterHelp.com slash Deloney to get 10% off your first month. That's BetterHelp, H-E-L-P dot com slash Deloney.

Live from the Ramsey Network, it's The Ramsey Show, where we are taking calls about your life, your money. We're helping people build wealth, do work they love, and create amazing relationships. This is a live show, so if you want to get your call on the line, the number is 1-888-825-5225. I'm Jade Warshaw. Next to me is...

Let's just say my favorite host, George Camel. You say that to all of your hosts. You're right. I do. You're all my favorites. I love you guys. That's right. It's always a good time with George Camel in the chair next to me. All right. Let's go to the phone lines. Morgan, Washington, D.C. is on the line. What's up, Morgan? Hey, guys. How are you? I'm starstruck right now. I listen to the show every day. Oh, wow. It's exciting to talk to you, too. How can we help?

Yeah. So I am a federal employee. I'm an attorney at one of the government agencies and I am considering taking Trump's buyout offer and I need some help on how to decide. I'm 26. I was married. I just got married in August of 2024. I make about $190,000 a year and I'm debt free. Okay. Me and my husband make $190,000 a year and we're debt free. So get the listeners up to speed for anyone who's not clear on what you mean by Trump's buyout. Tell everybody what that is.

Yeah. So Trump is offering full pay and benefits through the 30th of September this year, but I'd have to stop working now. So the catch for me, oh, sorry, go ahead. And this is in response to you either being a remote worker or fully in office, correct? Yes. So I currently work two days in office and two days at home, and that's been able to be working for me right now, uh,

Because it's, you know, only two days, but I work, I live about a hundred miles from the office. Oh, wow. So my school's commutes about two and a half hours and I've actually got an apartment in Silver Spring. So we're floating two rents. Wow. So you drive in, stay for two days, two consecutive days, and then go home?

I do. And I do it because I really love my job. I can't really practice what I do anywhere else. I can practice it for the other side, but not for the government. So that's kind of my hesitation. I really love my job and I don't want to give it up. But my income as an attorney is a little bit more replaceable than my husband's. So the issue then isn't that you don't want to work from the office. The issue is if you were to move, it would put your husband's job down.

It put him right. OK. Yeah. Right. One of us would have to quit. So we're weighing whether it's him and he would be without income right away or it's me. And I've got kind of seven months of runway. So you're at 190 when you said you can only do your type of lawyering there. What does that mean?

Yeah, so I work in Veterans Administration benefits. And so it's only practiced in one court. It can be practiced nationwide, but I can only practice it for the veterans instead of the government if I take, you know, to buy out and try to find a new job. And then there's a question of I've never practiced that kind of law before. Will I like it? You know, they have a different set of skills. What about your husband? What does he do and can he do at other places?

So he's in supply chain and logistics, which definitely can be practiced anywhere. But the federal government does most of the jobs in D.C. and there's a 90 day federal hiring freeze right now. And what's he make? He makes about with bonus about eighty five thousand. OK, so his is the lesser of the two incomes.

So just looking at this, like pragmatically, just looking at the facts, it feels like his job would be easier to replace and it's less income to replace, whereas yours would be there's only one place to practice it and do what it is that you do and you make a higher income. So based off of those two thoughts, it feels like going to D.C. would be a better choice. What does he think about that?

Um, he's so supportive and wonderful. He's kind of willing to do whatever, you know, we kind of think is best. I guess my hesitation is eventually I would like to maybe get to the point to hang, like you start my own practice. And so I would need some rehearsal at a different firm.

Were you thinking that even before this Trump thing? Or did that just spark it up? Yeah, I was. Yeah. So it might be kind of a golden opportunity to get out of the lease that I'm in in D.C. How easy is it to get out of the lease? It's a 60-day notice to get out of the lease. So a month-to-month, thankfully. Okay. That's interesting. And from what I've read, we're not sure about the legal underpinning of this, if he can actually do this.

So my fear is kind of what happened with student loan forgiveness is the student loan companies went, hey, Jade, here's a $20,000 check as a refund and we're going to reinstate your student loan balance. Good luck with the government forgiving it. So my fear is they say this, you leave, and then they don't actually make the payments. So do you have any, I may be wrong in this, do you have any other information that would help, you know, solidify this decision? Yeah.

Um, I may only have assurances from the government. That's exactly my fear. Assurances from the government is enough to send. That doesn't make me warm and fuzzy on the inside. So I think there is a lot of risk here. But if you're willing to handle that risk and go, listen, I'm going to land back on my feet.

Worst case, I'll go find something else to do. We're okay financially. We're debt free. If you're in that position and you go about this like, hey, it's a new adventure. We're going to find something ASAP to replace the income and not just wait until September 30th to make a decision, then I would be okay with it. Do you have kids? Yeah.

No, we don't have kids. And kind of on the security front, we've actually been saving to buy a car in cash. So we've got our emergency fund plus the car cash fund. So I think together we've got about $40,000 cash tucked away, which kind of adds that extra layer of security to maybe go out and try something new. Can you live on $85,000? Yeah. So after retirement and everything, we bring home, like we see $7,600 a month.

So yeah, I think we could live on 85. That includes, that's before funding our Roth IRAs as well. Okay, so what I think that, I think what will give you a lot of peace if you decide to stay where you're at

and start your own thing and keep your husband's job on, on, on the line. I would do an every dollar budget. If you don't have it, we'll make sure you have it. Um, and really play out what would your budget be on 85,000? And maybe there is a little bit of gap there that you have to fill in and then you can come up with, okay, what's our plan going to be? Cause we don't want to dip into emergency funds if we don't have to. Right. And then you can really put together a solid plan and there will be less question marks in this whole thing. Um,

I kind of like the idea of you stepping out on your own. Not going to lie. I'm always going to almost always going to vote that route, though. And generally what we find is people leave the, you know, the government public sector. They end up doing better in the private sector, especially if you're going to start on your own or go work for a firm somewhere. I think in your line of work, you're going to you're not going to have trouble finding it. And so that also gives me peace. I don't want to make this sound like carte blanche advice for anyone with a government job to do this. But in Morgan's situation, I'm

I mean, it sounds like you guys have thought through all of the different angles of this to go, we can make this happen and it's going to benefit us. Yeah, it feels fortuitous that this happened to kind of get you thinking about your other options out there on your own, which is really very cool. That's kind of the same thing that happened to Sam and I during COVID. Everything shut down during COVID.

And that's when I saw the email come through from Ramsey Solutions that said that they were hiring personalities. And it just felt like this fork in the road. Hey, if we're going to change up our life, the world's already in flux and chaos. Might as well. Might as well at least consider it. Like I wasn't looking, but when a great offer comes and in her situation, her stepping on her own is a great offer. There's no real reason not to explore it further. And we're so glad you did explore it, Jade, because you're here next to me on the Ramsey Show. And we're best friends. Who would have thunk it?

I love it. I love calling you my best friend and then you just look at me. It feels good. I don't want to give you the response back, but it feels good to hear it. Let me say that. Yeah. I'm glad that I could boost your self-esteem on this Monday. All right. This is The Ramsey Show.

Statistics show that half of Americans don't have enough life insurance or they don't have any at all. I don't understand this, John. Why don't people want to take care of their family? They think they're not going to die or something? Well, I used to be one of those guys. I didn't even think about it. And one of my buddies said, hey, the only reason to not have life insurance is if you hate your wife and kids.

And I immediately went and got term life insurance. That's a gut punch. For decades, Dave, I've sat across people who've lost a spouse. They've lost somebody important to them. Me too. And they don't know what to do next. Terrifying. You're going to have a crisis here. You know, you got two options while you're sitting and talking to a young widow. She's concerned about how she's going to invest all this money properly and not mess this up. Or she's concerned how she's going to eat tomorrow. That's exactly right. These are the two options. Yeah.

It's saying I love you to your family, term life insurance. Jeff Zander and the team at Zander Insurance makes it easy and affordable. I've used them personally for 25 years. They're the only people I trust. Go to Zander.com or call 800-356-4282. Hey guys, Rachel Cruz here. All right, I'm about to say what everyone already knows, but budgeting is a good thing to do. Now actually starting, well, that's where people freeze up.

And you guys, it doesn't have to be that way. With the EveryDollar budgeting app, getting started is super easy. And so is sticking to it. You can set up your first budget in less time than it takes to go through the Chick-fil-A drive-thru. It's fast. And the best part? With unlimited budget categories, you can customize it to fit your life. Grocery runs, coffee runs, or planning your next family trip.

Whatever you have going on, EveryDollar helps you see exactly what's happening with your money. You'll know what's coming in, what's going out, and what's left over for some fun. Because let's be real, you need some fun in your budget. EveryDollar keeps budgeting simple and stress-free, just the way you want it. So go download the app for free and get started today. Again, go download EveryDollar today.

You're listening to The Ramsey Show. I'm Jade Warshaw. Next to me, George Camel. We're taking your calls, your life, your money, your relationships, your career, all of it, your budget. Yeah, that's a big one. All right, let's go straight to the phone lines. We've got Seth. He's in Portland, Oregon. What's going on, Seth?

Yeah, hi there. Thanks for taking my call. Big fan, first-time caller. I am 45 years old. I have about $690,000 in my 401k, and I owe about $460,000 to my house. I would like to, considering paying off the mortgage, living life completely debt-free, and then reinvesting the monthly mortgage payment into mutual funds, stocks, IRAs.

So along those lines, I know the taxes and fees are significant, but so is living life that free without a mortgage payment. So I wanted to hear your thoughts. So you're talking about taking the money out of your 401k at a penalty to do that? Yeah. Oh, no, I definitely wouldn't do that. Why are you feeling why are you feeling the rush? Tell us more.

I think I'd just like to not have the mortgage payment there and be able to have the freedom to do more investing with the same money every month, essentially.

Yes. Yes. But you're taking I mean, I have not run the numbers on this, but you would be taking such a hit plus the penalty and that time that that amount of money over time, what it could have been versus you investing just your mortgage payment. Does that make sense? I'm thinking about that. Tell me, have you run like tell me about the numbers you've run or is this just a piece play?

No, I've kind of run them a little bit. I ran them by my tax accountant. She said it would cost me probably some in the neighborhood of about another 50 grand maybe to pay off the taxes and fees.

penalties involved. So we'd have to take out probably some of the neighborhood of flat owners. She's not thinking about opportunity costs of the growth of that money over time. Have you plugged that into an investment calculator to see what half a million left alone if you don't add anything to it for the next 20 years from 45 to 65, what that'll amount to? I'll do it. Jade's going to crunch the numbers. Let me talk to you while she's doing that. I want to talk about this mortgage. It sounds to me like maybe you bid off more house than you could chew.

Hmm. Is this mortgage payment a big chunk of your take-home pay? Take-home's about $11,000, and the mortgage payment's about $3,000. Okay, that's reasonable. We recommend 25%. You're a little above that, but nothing's on fire. Why not just chip away at it every single month with as much as you can throw? So if you're investing 15% of your income to retirement, how much extra could you throw at the mortgage? That's a good question. Yeah.

Maybe, yeah, maybe a few hundred. Yeah. Only a few hundred bucks is the margin you have on 11 grand? Well, there's a lot of things in the budget, and I have four kids, a couple of them starting college fairly soon, so I'm doing some saving on that side of the thing. Okay, are you helping them cash flow college? Yeah. Okay, when will that end, the season of trying to get the kids through college?

Well, I've got one who's in now and he's got probably three years left. And then I've got a 14-year-old who will probably start in four years. So we're probably nine or so years away from that. Okay. And have you been investing money into a 529 or is this just straight savings and cash flowing payments from each paycheck? Yep. Just serving where we can as we can into more of a traditional savings. Okay.

Can I jump back real quick? Seth, you may have said this, but let's pretend that you did your deal and you took this money paid off your house. How much would you be investing every month at that point? Because I just want to line this up for you. Probably somewhere in the neighborhood of the $3,000, I would think. Okay. So let's just run this comparison side by side. If you were to...

keep the money where you have it and put $1,500 aside every month, you'd end up with around $4.5 million, right? If you were in that account, if you were to drop it down to zero and just say, I'm going to invest $3,000 for the same term, 10 years at the same rate of return, it would be $2 million, 2.2. You see what I'm saying? So that's a big drop off. It's a big difference. Yeah.

So I hope that kind of mathematically frames up the equation here. Back to George. You've got good intentions and heart behind it. You're not trying to do something frivolous or stupid, but nothing is worth giving the government an extra 35% of my retirement and unplugging all of that growth just to have a paid-for house. And trust me, I want you to have a paid-for house.

but I would find other ways to do it with future income, savings, anything else you can do. And you're going to make more money over time. The kids will get through college. And so you'll be in a season where you can throw a few grand out of your 11K take-home pay toward the mortgage and get this thing knocked out. So what I would do is sit down. You have a wife? Yeah. I would sit down with her and go, hey, we want to pay this thing off. Let's have a six-year, seven-year, eight-year plan to get rid of this mortgage. Here's what that looks like.

And year one might be slim because the kids are going through college. Year four, maybe we're putting away 50 grand a year at the mortgage. Maybe more.

So I use our mortgage payoff calculator and start crunching the numbers. That's the tool I would rather you use to figure this out versus looking to the 401k or any other retirement plan. And as a reminder for anyone out there, if you withdraw funds in most cases before 59 and a half from these retirement accounts, the IRA, the 401k, you will be dinged with a 10% early withdrawal penalty on top of the full income taxes, maybe state income tax as well.

So I, you know, just crunching the numbers. What's the opportunity cost? You could lose half your money from this retirement account. You pull out 200, you pay 100. I would say that was a bad trade. Yeah, that's not good. That's not good. Listen, he's trying to solve for peace. I get what he's trying to do, but it just was the wrong method. Thanks for the call. All right, let's see if we can take care of Chris in Boston real quick. Chris from Boston, Massachusetts. What's up?

Hey guys, thank you for taking my call. You bet. So I guess the, the quick of it is about a year ago, I got an inheritance about a hundred or $350,000. And I fell in love with it, but I don't know if that's the best use for some of that money. I'm looking at the payments per month. It's about 3000 and it's just a scary number to look at.

And I'm not sure if that's the best place to put it right now or if I should keep it invested. You broke up on us when you were telling us. What did you fall in love with? This condo I found just outside of Boston. What's it cost? I don't know if I should, outside of Boston, Massachusetts. Yeah, what does it cost? $350,000. $350,000. So you would essentially use the, would you use the whole inheritance to pay for it in cash? Yeah.

Well, that's the thing. I don't know if I should use the whole thing because it's all invested in mutual funds and ETFs right now. But I don't know if it's better to not have a mortgage payment or if it's better to just put the 20% down and try to go just off of what I make. What's the rest of your financial snapshot? Do you have any debt? I've got $13,000 left on student loans and about $8,000 left on a car. And do you have three to six months of expenses? Yes.

Yes, I've written out about $35,000 saved up. Okay. So just walking through the baby steps with this would be you paying off the debt first, clearing that out, stacking up three to six months. And then with this condo, I mean, you're going to be, there's going to be some tax implications, I'm sure, on the growth. And when you pull that out, and then let's see, there's probably going to be some fees. So you could get pretty darn close. What's your living situation now?

So I moved back with my parents just to save some money. So I could stay here for, I mean, a couple more years, but it'd be nice to kind of be out on my own again. Yeah. Who left the inheritance? It was my uncle. He had passed away a few years ago and left it to myself and my sister. Wow. Quite the legacy. That's impressive. Yeah. Yeah, I'm with Jade on this. You take your 35 savings. Let's knock out the student loan and the car loan today. That leaves you with $14,000.

sell off a big portion of this inheritance and be aware of the tax implications of that. I would check into that with a tax pro. And whatever you can throw at the condo, I would throw at it to get to as completely debt-free as possible. Because then what's going to happen, Chris, you're going to have a mortgage payment freed up that you could then invest.

And so either way, you can crunch the numbers and do the math all day. I think the freedom and peace that will come with not having a mortgage payment at your age, dude, you're going to be so unbelievably wealthy if you just use your income to throw into investments then on and therefore. Two calls in a row where people are trying to buy their homes completely outright. I love that. To have no mortgage payment. Come on, speak to that, George. The ultimate flex in today's world, I think, is having no mortgage payment and telling your friend, oh, you got a 2% mortgage interest rate. How about 0% with no payment? That's

That's what I'm signing up for. Mic drop. Listen, I'm getting there, George. Let's go, Jake. Let's go. This is the Ramsey Show.

Have you gotten one of those texts recently claiming to be the USPS with some sketchy link to update your address? It's annoying and a little terrifying. And you probably think to yourself, I should do something about this. But where do you even start? Well, as your nerdy friend who does the research for you, I found the solution. They're called Delete Me. And here's the reason they come in the clutch. The internet is packed with data brokers, which are these shady companies whose sole purpose is to collect your personal info and sell it for a profit.

Enter Delete Me. Delete Me swoops in, finds your info on these sites, and removes it on your behalf. They even send you a report with all the details. And so far, for me personally, they have reviewed 27,000 listings, removed my info from 240 data brokers, and saved me 66 hours in the process.

I trust Delete.me to help protect my family, and I trust them to help you too. You're going to get fewer spam texts, fewer phishing emails, and fewer creepy robocalls. And Delete.me also makes a great gift for other people in your life that you care about. Individual plans start at just $9 a month, so take an easy step to protect yourself and your loved ones today. And as a Ramsey fan, you'll get an extra 20% off any of their plans at joindeleteme.com slash Ramsey. That's joindeleteme.com slash Ramsey.

You spend hours researching before making a major purchase like a home or car, but it's also a good idea to put in the work searching for the right insurance coverage. To protect your biggest assets, I recommend using Ramsey Trusted Pros. Whether you're looking for car, home, or any other type of insurance, Ramsey Trusted Providers have been coached and vetted to serve you like we would. Find what you need at RamseySolutions.com.

You're listening to The Ramsey Show. All right, our Ramsey Show question of the day is brought to you by YRefi. YRefi refinances defaulted private student loans.

which are different than federal student loans. Y-Refi refinances your defaulted private student loans and they build a custom loan based on your ability to pay. So kick your private student loan debt out of your life by going to Y-Refi.com slash Ramsey. That's the letter Y-R-E-F-Y.com slash Ramsey. Remember, it may not be available in all states. Today's question comes from Amy in South Carolina.

Right.

I would assume you do not think this is a good idea, correct? But we do not understand stocks or mutual funds at all. Tells me your financial advisor is not a great educator. He is 65, his health is failing, and he's afraid that if there's a dip in the stock market, something happens to him, he will not leave me with much. Can you advise as to what we should do with his 401k to secure it better?

Okay. Number one, fire your financial advisor yesterday. This person is an insurance salesman, not a wealth strategist who exists to help you understand what you're investing in. Yeah. A financial planner who's advising an annuity, that's a wolf in sheep's clothing, I feel like. So let's talk about the different pieces of this. So an annuity is a contract with an insurance company with a promise of a stream of income. And so who do they prey on for this? People who are scared.

Annuities prey on fears of market risks under the guise of protecting your nest egg. But it's less like a bank vault and it's more like a prison that you're paying to be in. Annuities are very expensive, complicated products. There's fixed annuity, variable annuity, indexed annuities. And I've talked with Dave about this offline and he said, hey, the only one that we would be okay with in very unique circumstances is variable annuities. And that's only for the ultra wealthy who are trying to diversify their risk.

But for this situation, this person is saying, I'm not making money from you investing in your 401k, but I can make money if I use some of that money for an annuity and I can get a commission off of that. Yeah, I was going to say there's fees associated with that. And the rate of return is so poor. Terrible rates of return. You can do way better investing on your own. And that's where you need education on stock markets and mutual funds and index funds.

Because here's the deal. If you make 8% on an annuity, you think, I'm crushing it. The S&P 500, the overall U.S. stock market, did 24% last year. Let's go. And you're going to go, why is my portfolio not making that much? Well, it's because you have crappy investments in there. But even over time, let's say, you know, obviously this year, the year before, those were just like really bad.

Benchmark like amazing years. It could be negative 24% this year for sure. But even over time, you're going to find that if you're invested over time, you're going to still be around 10 to 12% if you're invested in good mutual funds. So what's wrong with keeping it where it is? I'd be interested, George. She doesn't say how well their performance has been in his current 401k. What's in here? We don't know if there's hopefully there's term life insurance. I have a feeling there isn't because she's saying his health is failing. He's afraid that, you know, he won't leave me with much.

This is where term life could be a game changer on top of getting self-insured, which means from, you know, in your 20s, 30s, 40s, 50s, you're following the baby steps, getting rid of debt, investing for the future, getting the house paid off to when you're 65, you should have a sizable nest egg there.

I don't know their situation, where they're at, but no, if the financial advisor is screwing you over here, I would fire them. I would jump on ramsaysolutions.com, click on Trusted Pros, find someone you can trust who's not going to sell you crappy products that you don't need. And let's talk about this angle real quick, because when I see this, and I don't know, I'm reading this into it. When I see this, I see a couple who's probably been married forever, and they're faith-

facing a health crisis and it's scary and it's easy to kind of panic and go, what do we need to do and do this and do that? And it's quite possible that someone is taking advantage of that.

Oh, you need something to do. Here's what you do. You know what I mean? And so it's just a reminder. And she did the right thing by asking the experts. But it's just a reminder that, you know, move slowly when you do when you're going to make big moves with your money. Make sure you're seeking wise counsel, that you're not doing things out of fear and out of the circumstance in the moment. But you're really doing.

getting the right information. Yeah, it's very sus. And here's how you know it's sus. These are the same people that always send you those flyers in the mail that's like, we have a free dinner for you at this steakhouse. And all you need to do is sit through a little presentation at the end. These are pitching annuities. Yeah. So if you've got one of those in the mail, it's not unlike timeshare presentations. True that. Where it's like, hey, I get it. We get a free steak dinner. We'll listen to the pitch while we eat. And all of a sudden they dupe 12 people out of fear into buying into these annuities. And the dinner is not very good. Yeah.

You can do better. All right. One cocktail. Come on. Let's go to the phones. We've got Wade in Salt Lake City, Utah. What's up, Wade?

Good afternoon. I'm looking to protect a home for my wife, and it requires a little bit of explanation. So if you could bear with me for just a moment. Sure. After a loss of a business and our home back in 2003, my father-in-law graciously acquired a home for us to live in, with us making the payment amount to him as rent.

But eventually, because of Parkinson's, I was forced to retire in 2019. And I had only worked about six years for an employer where money was set aside in a 401k. Prior to that, it was all self-employment.

But along the way, we managed to clear most debts, but we fell behind in rent to my father-in-law due to some smaller payments than agreed upon or at times no payment at all. In 2024, I pulled about half of that 401k out to catch up with

a little with my father-in-law and he recently proposed that if we could arrange a second similar amount he would be able to finish paying off the house and he would then relabel our arrangement as a rent to own agreement that was fulfilled and he would sign the house over to my wife. Okay what is it what do you have to give him for that to happen?

I took the second half of my 401k was only about $40,000 at that point after the COVID period and stuff. It took its toll and it was meager. And so I...

And I took the rest of a couple of weeks ago. I drained that last part of my 401k and gave that to him. I felt that was in exchange for a house. That was a good investment. Is that the amount that your father requested, $40,000, or was that all you could give? How much did your father say he needed?

To close this deal? No, that was what he asked for. I had taken out half in 2024, and he told me if I could give that same amount to him again one more time, then he would consider things fulfilled. How old are you, Wade?

I am 61. Okay. So you gave him the money and he should have been able to pay off the mortgage and sign it over to you. What happened instead? Well, here's the thing. In addition to progression of my Parkinson's, I've had one kidney removed due to cancer and my remaining kidney is failing. I'm sorry.

And I worry that I may find myself faced with a transplant procedure or worse, that it won't happen until after my wife has to retire and that our insurance will be limited to Medicare only at that point. So I'm a person that likes a plan B, C, and D. And before my father-in-law signs that house over, I'm concerned about...

about how to protect it for my wife. I have nothing to leave her except to leave her debt-free and a little bit of life insurance. Are you saying there's collectors coming after you guys? No, no. But what I'm worried about is that if this home is in her name only, which it will be...

Oh, I see what you're saying. We're against the clock. He's concerned that if they rack up debt for his medical, that it'll go against the House. I would look into a homestead exemption, and I would talk to an attorney in your area who knows your state laws because it differs wildly, and I'm not here to give you legal advice on that. But we are wishing you the best, Wade.

It's a lot. And I don't want your father-in-law taking advantage of you. It's given me some red flags. I would proceed with caution. Yes. This is The Ramsey Show. Best of luck to you, Wade.

It's that time again, folks. Tax season is here. I know some of you would rather bury your head in the sand until April 15th than face your taxes. But here's a better idea. If your tax situation is complicated, get in touch with a Ramsey Trusted Tax Pro today. That way they can take the stress off your shoulders once those tax forms come in and teach you how to keep your tax bill as low as possible. But don't wait. Ramsey Trusted Pros can book up

Go to RamseySolutions.com slash TaxPro to find one who serves your area with excellence. That's RamseySolutions.com slash TaxPro.

You're listening to The Ramsey Show. I'm Jade Warshaw. Next to me is George Camel, host of the George Camel YouTube channel. If you've never seen it, you ought to check it out. It's part of the Ramsey Network. If you didn't know, we do have a Ramsey Network app. It's the only place that you can get full episodes of shows like The Ramsey Show. You can download it for free using the link in the show notes or by searching Ramsey Network in your app store. That's how you get the third hour of the show. The full show is there, but if you want to listen to the third hour, you must download

go into the app. So if you're on the radio, stay tuned after this hour. But everyone else, if you want to finish the show, you'll have to go into the app. All right. Into the unknown. I was just thinking that. I knew you were. And I considered it. And then I was like, those notes are high. I'm actually shocked you didn't belt it out on radio. Into the unknown. No, I won't do it. And the FCC just took us down. I know they did. All right. Reagan is in Chattanooga, Tennessee. What's up, Reagan? Hi, can you hear me? We can.

Okay. So, um, my husband and I have been married for, um, almost a year and we just found out that we are pregnant. Very unexpected. Thank you. Um, so I kind of have a two part question. Um, my first question is what do we need to do financially, uh, to prepare for the baby in the next nine months? And also, um,

Should I quit school in order to be able to work full time? I'm currently in grad school and I'm working in the evenings. I didn't take any loans to

to do grad school but I am most of it is being paid for by my university and then I only owe like a couple hundred dollars I will owe only a couple hundred dollars at the end of the semester so I'm just trying to get some advice on that that's awesome so what are you going to school for

So I'm getting my master's in Bible and theology. Up until this point, I've been thinking that I want to teach. I don't know if I'd want to teach higher ed or junior seniors in high school and just start teaching with kind of a higher paying salary. But

I also don't know with the baby if I want to stay at home. So that's part of my contention with, you know, should I keep going if when the baby comes, I'm like, no, I really want to stay at home. So, yeah. So what would you do? OK, so if you didn't go to school, it wouldn't be you doing a different career, would just be you staying at home. What does your husband do?

So that's kind of been a rocky situation over the past couple months. He left his full-time job. He was the director of soccer operations for a local pro soccer team, and it was just a really bad situation. He was, like, just being treated pretty rough and was not being compensated for it either. Yeah.

So he left in November. He started coaching at a local high school, just like a private Christian school. And they had told him in his initial interview, like, since you're going to be a head coach, we want you to be on staff full time. We just don't know what that will look like yet. So at the moment, well, ever since then, we've been getting kind of stipend money, but

We've kind of been struggling because you've been waiting on the full-time thing to come. So what's your plan on it? How long are you guys going to wait?

Well, so he just actually got a job because he had been looking for anything after probably a month. It was kind of like, okay, we can't really sit around at this point. So he'd been looking for anything, but he wasn't having much luck. So he just picked up a serving job just to bring in some money. So we're kind of just bare bones at the moment. But in December, we got a ton of money for Christmas. Yeah.

We are very blessed with our families. They help us a lot. And then for the next few months, we actually, with rent, are getting help from our church. Oh. So it's really, really tight. It's really tight if you're getting... Yeah, you need to get out of school and work because your family needs you to and...

this is regardless of the baby situation. I'm going, Hey, this is an emergency. Yeah. It's an emergency. Your husband needs to work more. You've got to work more. And I wish it were different because on the flip side of this, like if your husband was getting paid and his income was enough to sustain you, I would actually have asked you how much longer until you're done with school. Because part of me, if you're like, listen, I have this dream of getting this master's. I want to be a teacher. And,

There are seasons in life. And so you might want that education for later on after your kids are in high school and you want to go back to work. Right. So there's part of me that's like you have a really great deal now where they're paying and you're only paying a couple hundred dollars. If you could take advantage of that, I think that's a great thing. But to George's point, you guys can't eat.

Like there's no money coming in. Well, I am working at night. So that. Yeah, but you just laid out the whole financial framework. Obviously, whatever you're bringing in at night, thank you for your effort. But it's not it's not causing you guys to make ends meet. You know what I'm saying? So what are your total bills each month? Food, rent, everything.

Yeah, so our food is, I've been trying to stay under $700. Just give me a total monthly number. What is a total? Are you spending $4,000 a month in expenses?

Yeah, so our, yeah, to me, like minimum, and I know what you're going to say, we have not been having insurance. I am adding that, though, because of the baby. So I kind of, in our budget, included an extra $200 because he also will need, he needs vision insurance really bad. So it's our, like, break-even is about $4,300. Okay. And you're getting just gifted money now, but what is the actual...

money you guys are bringing in? A few hundred bucks? So I bring in about two grand just serving at night. So I work five days a week. The restaurants only open five days a week. And then because of the stipend money we've been getting, it's really been about like...

Kind of $3,500 because he's been also subbing a little bit at the school just over the past couple months. Okay. And you said you guys do not have health insurance currently? Not at the moment, but I'm visiting my family right now, and my mom and I are working on that tonight because we know it is a necessity. Let me just poke a quick hole. I think you said your husband is bringing in $3,500 and you're bringing in $2,000.

That would be enough to cover your bills. So something's not right. I'm sorry. Yeah, no, I meant, I didn't say that right. I meant probably like $1,500. His portion is $1,500, bringing the total to $3,500, which means you guys are underwater every month by about $800. I see, I see. Okay, yeah, this is, is he working 40 hours doing whatever? Um...

Not at the moment. Okay, he's got to start working 40 hours today. I'm talking about today. I needed some fire under his butt. I know he's been through a lot. He's been treated unfairly. But right now it's like, I got to provide for my family. And I got a kid. I got a baby on the way. It's time to just do whatever it takes to...

and he needs to find long-term employment ASAP with benefits if you're going to stay home. And so staying home, it's a math equation. I wish I could just say, well, if you want to stay home, just stay. It's going to cost you guys. And if he can't provide and you're going to go into debt to do this, the answer is no. Yeah. Do you guys have debt now? Oh, yeah. Okay. How much debt? What's the total debt load? Total is about...

Um, like 110. Okay. And is that including your renters, right? Um, or do you own it? Sorry, can you say that again? Are you renters or do you own?

Yeah, no, we're renting an apartment. Okay, so what kind of, that is the 110 real quick. So our cards are, credit cards are about almost $14,000, a little under. His car, my car's paid off. His car is almost also $14,000. And then we have $85,000 in student loans, but we are on the safe plan. Okay. So, and since I went back to school, I haven't,

They put mine on pause, so I haven't been paying. But his payment is only like $25 a month. Right. Yeah, that's a weird thing about those student loans. The payments are low, but it's a boogeyman in the closet. And you feel the effects of it, even though you're not making that monthly payment. And the Piper...

wants to still be paid. Okay. So my advice is you've got to work, work, work and work some more. He's got to work and work some more. And yeah, I would try to work and go to school because you need a degree so that you can get this professor's job so that you can make some money. I don't see you staying home with the baby anytime in the near future. I wish it were different. Hang on the line. We're going to send you every dollar premium. That's our budgeting app that you can use for everyone else. Go check it out in the app store. It's going to help you get a plan for every single one of those dollars coming in.

Thank you.