The Ramsey Show - App - 10 Things You Need To Know About the Secure Act 2.0 (Hour 1)

Episode Date: February 8, 2023

Dave Ramsey & George Kamel answer your questions and discuss:   Selling stocks to pay off the house, Dealing with buyer's remorse on a recent house purchase. from the blog: How to Keep 3 Common Home Repairs From Busting Your Budget 10 things you need to know about The Secure Act 2.0, "Should I tithe on my tax refund?" Have a question for the show? Call 888-825-5225 Weekdays from 2-5pm ET Want a plan for your money? Find out where to start: https://bit.ly/3nInETX Listen to all The Ramsey Network podcasts: https://bit.ly/3GxiXm6 Learn more about your ad choices. https://www.megaphone.fm/adchoices Ramsey Solutions Privacy Policy

Live from the headquarters of Ramsey Solutions, broadcasting from the pods moving in storage studios, it's the Ramsey Show, where we help people build wealth, do work that they love, and create actual amazing relationships. George Campbell, Ramsey personality, is my co-host today. He's also the co-host of the Smart Money Happy Hour with Rachel Cruz, a very popular podcast that's kind of exploding out there. It's a really big deal.

So we're here with you to help you today. The phone number is 888-825-5225. We're going to start this hour with Tere in Houston. Hey, Tere, what's up? Hi, Tere. How are you? We lost her. Off to a great start. Maybe we're not.

Let's see if I can do that one more time. Trey, are you there? Nope. Okay. We're just going to start with that then. Eric is in Albany. Hi, Eric. Welcome to the Ramsey Show. Thank. All right. We're just going to start with that then. Eric is in Albany. Hi, Eric. Welcome to the Ramsey Show. Thank you, sir.

Appreciate your taking my question. Sure. What's up? So I keep getting into my head and wanting to liquidate all my investments and pay off my mortgage. And I kind of know that, like, mathematically, that's probably not the right choice, but, like, I feel like it would be a major pressure reliever and then to be able to go back through

and just use all my discretionary cash to start going back in and rebuilding my portfolio. Mm-hmm. So how much do you have in your portfolio? I have my stock portfolio. So how much do you have in your portfolio? I have my stock portfolio, I have $180,000. Did you say $180,000 or did you say $80,000? $180,000. Okay, and what's your mortgage balance? My mortgage balance is like $170,000. Okay, all right. And the portfolio you're discussing is not in a retirement account, correct?

Yeah, it's a taxable account, yeah. Okay, and you're debt-free other than your home? Yeah, for the most part. I have a credit card that's got a very low balance on it that I literally just charged last month, but it didn't pay off by the end of the month. Okay, and what's your household income? I literally just charged last month, but it didn't pay off by the end of the month. Okay. And what's your household income? Free tax, about $260.

Good for you. Well done. How old are you? I'm 40. Okay. And so you're saying that mathematically it doesn't make sense, and I would even challenge that part. I think mathematically it does make sense to pay off your house.

Well, we bought my house in 2012. Doesn't matter. And we got like 3.5% interest on it. So at this point, we've overpaid on it ever since and paid biweekly. And so at this point, I'm not really paying any interest on it, and what interest I am paying is minimal versus the returns that I've been able to get in the stock market. But you've not factored in risk.

Right. There's no math for risk in your formula. And not factoring in risk mathematically is a naive formula. And so here's what we know. We know from the data of studying millionaires that the typical millionaire does two things that causes them to get to their first one to five million dollars, that they get out of debt, house and everything, and they build their 401k and their Roth IRAs and good growth stock mutual funds. The number of millionaires that we asked and we said, okay, did you leverage your home in order to invest in stocks

and that's why you became a millionaire, the number of them that say that is very close to zero. They say stuff like, well, Lord, no, I got out of debt. Isn't that interesting? So the formula that you're proposing is mathematically correct, is not used by hardly any millionaires to get to millionaire status. Translation, your formula is wrong. So, Eric, would you take out against your home

a $180,000 loan to invest into single stocks? Well, I think, you know, if that's what I was doing for a living, yeah, sure, why not? If you were day doing for a living, yeah, sure, why not? If you were day trading for a living, basically? Yeah. You also probably wouldn't be sleeping at night. You'd lose relationships because you'd be staring at these numbers, making sure they go up all the time. You're absolutely right. You're absolutely right about that.

So there's a piece of this where, man, I can feel that you're craving that piece, but you're stuck on the starry-eyed, but what if I got this return on that money? And the guaranteed return in your house, I think, is way more valuable. So here's what I would do. You called us, and so really simply, I would cash out the stock and pay off the house today. Now, then I don't have a house payment. I have an increased stability at the very foundation of my life and my financial plan. Because you cannot grasp, and you actually can't mathematically capture, that it feels different to walk through your backyard with no shoes on. The grass feels different when you don't have a mortgage. You cannot capture that.

You cannot capture what this does that the stress release even if it's minor what that does for your relationships you cannot capture what it does for your boldness and your excellence in your career uh and all of those things over time the math actually plays out that people of means people of wealth actually do not take out home mortgages to trade and sell buy and sell single stocks those are called day traders 78 of which lose money and um lose a lot of other things while they're doing it so george i hear about the ones that win as well and you and they're always temporary because you know it's the same thing as playing the slots. Oh, I won at the slots, right? Yeah, yeah, yeah.

That's how they built those casinos, okay? Not by you winning at the slots, I can tell you that. So mathematically, just because you hit it once doesn't mean you're going to. So all of that to say, Eric, I'm going off the data of the 30 years of doing what I do, walking alongside people, watching their lives transform, watching their relationships, their careers blossom, and their portfolio. Because when you don't have a house payment and you make $260,000 a year, you can build up $180,000 really quick if you want to screw around with single stocks. Won't take long at all. So good question. Thank you for calling.

Pay off your house today, sir. Yeah, the whole end goal of both of our discussions is build wealth. The question is, what is the best path to do it? And we have found that doing it with the least amount of risk possible puts you in a better financial position long term. And so what we're saying here is you're going to build wealth either way. You could lose your butt hanging on to these single stocks in the next week, depending on who tweets what, or you could have a guaranteed return with no house

payment making $260,000. You think you can build wealth with that situation? Absolutely. A hundred percent of the time you can. So, and a hundred percent of the foreclosures occur on a home with a mortgage. So. Didn't have to do a lot of research on that. It'll come to you later, I promise. So that's the idea, folks. That's the idea. What is your most powerful wealth building tool? Is it your home equity? Nope.

It's your income. The person in your mirror is the secret sauce for you to build wealth, for you to build a quality life. You're the secret sauce. You're the answer. No one's going to do it for you. And there is no magic pill that you've yet to discover. Just go in there, brush the fog off of the mirror after the shower, and look at that guy, look at that gal, and go,

you're the problem. You're the solution. This is the Ramsey Show. Hey, you guys. Health insurance costs are only moving one way, and that way isn't down. And if higher costs aren't enough, the wait times to see your doctor are longer, and it's harder than ever to get anything approved through the bureaucracy. So if you feel like the system is working against you,

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George Campbell Ramsey personality is my co-host today. Well, a lot has changed over the years here on the Ramsey show, but our practical advice on life and money never has. I can tell you that for over 30 years, millions and millions of folks have tuned into the Ramsey show for money, relationships, career, and life advice. And whether people are up to their eyeballs in debt and wondering how they can't get ahead

or they're spending their days in a dead end J-O-B, I'm trying to find hope, trying to find a way. Well, we're excited to announce that the Ramsey Show is now also on TBN. And you can tune into the Ramsey Show on TBN weekdays at 5 p.m. Eastern, 4 p.m. Central. Get your daily dose of life money career and relationship advice hey be sure and jump in there we'll see you then george camel ramsey personality is my co-host today and i think we've got to ray in houston lined up now hey to ray how are you i'm good how are you better than we deserve what's up well thank you guys for taking my call to start um so basically i

purchased a home my first home back in october and i am now experiencing buyer's remorse it's just been a lot of if it's nothing it's something everything's broken everything needs to be fixed everything needs to be replaced um and so i guess my question is, if I did not make the best decision, how do I make the best decision moving forward in rectifying, controlling and maintaining my financial responsibilities to build and so forth? So is this a fixer upper that you bought? Like, are these shocking repairs or do you know some of this going in? No. Basically, it's a house that was built in 83 and a lot of the renovations that were done were poorly done. Okay. And this buyer's remorse, is this coming from the mortgage payment being too big or is it all these repairs that you don't have the cash to do? Where's that coming from? Both. Both. I feel like I'm paying too much on my mortgage for

all of the repairs that i'm ending up having to take care of now that i've moved in so how much is your house payment um right now i'm paying 1865 okay and what's your take-home pay a month a month 74 okay your house payment's not too high. Okay. So that's not a problem. You're just not used to paying a house payment yet. Okay. But it's in the zone of it's less than a fourth of your take-home pay, so you're fine. What do you do for a living, Tere? I recruit for oil and gas.

Good for you. Okay. Well, what I think is going to happen is that you're probably going to get the other side of the bulk of these repairs. I don't know what exactly you've had to fix or do. What are some examples of the three biggest, most worrisome things and the cost of them that you had to fool with? One of the things I have not started working on, but it is something that is being told that I need to start planning is the roof. Um, as well, the majority of the appliances that look to be new are having to be replaced. Um, insulation is completely poor. I have to have someone to come in and look at that. So those right now are just a few of the things

that I'm trying to work on. Okay. Who told you that the roof had to be replaced? At the time when I first moved in, I did use my VA home loan. So the inspector that the VA sent out, he was very particular about the roof, and that was a major concern when it came to finalizing the purchase. It wasn't a concern enough that the VA appraiser required a roof right if it was bad va would have required a roof or they wouldn't have put the loan on it okay so now who told you there's it needs a roof is it leaking um we had a technician come out during Christmas because the AC was a problem,

and he told me that it was leaking around somewhere in the attic, which was causing mold or some sort. And he was just like, it's not major, but it is something that I wanted to look into. I'm an overthinker. Like I said, this is my first home. I'm new to all of this this so i'm panicking right now yeah and i'm just trying to stay on top of everything yeah so you're a self-admitting that you're catastrophizing okay the guy went up there the guy went up there and he said there's

a leak and a little bit of mold you need to get that looked at and you went i gotta get a whole roof right possibly so yes yeah i mean that's what i heard i might be wrong and i i do that too that's how i can recognize it so um we all have a drama queen that lives inside of us every one of us and part part of making good decisions you ask how to make good decisions is to tell the drama queen to shut up um and that you know that's part of it you you gotta look at yourself and go you're you're you're really, come on. So yeah, you probably do need to get that roof looked at, but it might be a few hundred dollars instead of 10,000 to put on an entire roof.

It might need a little bit of a shingle replacement there, or there might be a leak around one of the vents and they put a new boot on it and caulk it up and you're just fine. So a good handyman getting up there and fixing that one area and you know shooting some stuff killing the mold in that one little area uh so it doesn't get worse and you don't go up there later and the whole attic has grown full or something like that so yeah address it but don't over think it and then you know all of the appliances need look new but need to be replaced are they not working absolutely not what's not working your dishwasher doesn't work no dishwasher stove refrigerator nothing none of them work no did the inspector catch any of this no did you have a home inspection i even i yes i

had two home inspections and i had a gas leak that was so extreme, I couldn't stay in my house for two days, and I didn't know. I asked, how did y'all miss this? Mm-hmm. Okay, so your home inspector is an idiot. Okay. Yeah, obviously, right? I mean, you miss a gas leak and appliances that don't work?

That's a basic thing. You go through and turn on all the appliances it's basic home inspection stuff okay so the great news is you make good money your house payment's not out of control you probably don't need an entire roof you do need a new dishwasher have you asked appliance repair people to come and just repair the existing ones or are you just planning to replace them completely? I was trying to see if I had some type of ability through my homeowner's insurance. If that could be rectified with them.

No. It's not. No. So I'm going to have to pay. Homeowner's insurance doesn't cover your dishwasher not working. So just have a guy come out and either look at it and fix it or replace it. A few hundred bucks. I mean, they're not $10,000. Do you have any other debt, Tere?

Outside of my little credit card debt and a few thousand old on my car, no. That's it. Okay. And when it comes, you said we. Do you have a spouse involved here? Did I say we? I do apologize do apologize okay it's just you you're single okay yeah so here's what i want you to do uh what's happening is all of these things are up flying around and and in just about the time you wake up in the morning or about the time you're about to doze off at night, they're overwhelming. Instead, what I want you to do is just write down a list of what needs to be repaired

and what you're going to do about it. Okay. So, okay. Dishwasher. I'm going to call a repairman and if it can't be repaired cheaply, I'm going to replace it. Refrigerator. I'm going to call a repairman. If it can't be repaired cheaply, I'm going to replace it. Roof. I'm going to have a handyman type come out, not a cheaply i'm going to replace it roof i'm going to have a handyman type come out not a roofer trying to sell me a roof that just looks at it finds the one little leak fixes the one little leak and sprays some stuff and kills the mold okay and you just you develop a list with an action plan and when the weird thing is if you'll write it down literally on a yellow pad a little repair to-do list then you're going to look at it and it's going to suck the drama out of your brain and it's going to drop right there on that page

because you're going to go oh this is doable how because it when it all comes at you at once it's overwhelming creates anxiety when you break it down into bite-sized pieces, one task at a time, one broken thing at a time, you can work through an entire remodel doing that, and you don't have an entire remodel. We're just exchanging the boogeyman for the repairman. That's the switch here. This is your first experience being a homeowner where you don't call the landlord and say, your stuff's broke. Instead, you've got to take care of it when it breaks.

It's one of the reasons we say get out of debt, have an emergency fund before you become a homeowner because all this stuff would have been an inconvenience at that point. And, you know, you make enough money to get through this, and no, you don't need to sell your house, and really you don't even need to have buyer's remorse. I mean, there's a couple of weird things that are here, the inspector missing this stuff,

but nothing here says this house is a lemon, that you're the biggest screw up in life because you bought it. You're a horrible person. I didn't hear any of that in this discussion. You got a couple of things broken. Fix them. Joys of home ownership. And your payment's reasonable.

Fix your dishwasher. Enjoy the house. It's that kind of stuff. Just kind of put the drama out of it. Put it down on the page. Break it that kind of stuff. Just kind of put the drama out of it, put it down on the page, break it down into bite-sized pieces. George Campbell Ramsey personality is my co-host today. Open phones at 888-825-5225.

Well, in the twilight, as 2022 is coming to a close, Congress passed a massive spending bill, of course, because that's what you should do if you're in Congress. But the good news is, as a part of that, spending bill of course um because that's what you should do if you're in congress and uh but a good the good news is as a part of that they also passed what is appropriately called the secure act of 2022 2.0 so what is the secure act 2.0 well it changes a bunch of things in your retirement and a couple of things in your student loans as well. And a good blog at RamseySolutions.com right now.

Very good detail on this, unpacked, if you want to get in there and really look at it and plug around. I think we post those blogs on Facebook, too, if I remember, James. But, George, I want to take a minute, since that blog's out there, and you guys can go through it all and look at it in detail. But for those of you that don't make it over the blog, let's hit the highlights. Yeah, there's a ton in here that really help a lot of people with their retirement. I mean, it's SECURE Act stands for Setting Every Community Up for Retirement Enhancement. So kudos to the marketing team that got to create that little acronym there.

Yeah, well, good luck with that part. But anyway, it's good. It's good updates. It's some things that needed to happen. Yeah, well, good luck with that part. But anyway, it's good. It's good updates. It's some things that needed to happen. Yeah. So it's starting with required minimum distributions. You'll hear these called RMDs. The age is rising to 73 instead of 72, which means you have an extra year without the government tapping you to get some of their cash. Yeah. Required minimum distributions are your 401k, your Roth, or your not Roth, your traditional IRAs. They require you to start taking money out at a minimum schedule so they can tax it. And it used to be 70 and a half.

Then it moved to 72. And with this, it moved to 73. So you can leave your money alone and not touch it till 73 now. That's good. Next one. No more required minimum distributions from roth 401ks and roth 403bs so this one's interesting because you've already paid the taxes on it so they're saying you've already paid the taxes you can just have it doesn't do anything to force you to start taking it out on rmds so we're going to let you just let it sit there and grow tax-free you don't

ever have to take it another reason to love a Roth. That's great. Next up, smaller penalties for missed required minimum distributions. It was 50%. It's coming down to 25%. Yeah, if you miss your RMDs. That's good. Next, higher catch-up contributions on the way. So if you're 50 years or older, there's a lot of great ways you can step up your retirement. Put an extra thousand in your IRA, for example, an extra 5,000, extra 7,500 in your 401ks, and they're increasing that. Yeah, 60 to 63, beginning in 25, in 2025, January 1, if you're age 60 to 63, you'll be able to put $10,000 annually into a workplace retirement plan, an additional $10,000. And so it allows you if you're quote running behind is it too late for me this is for you right love it all right next up on the good news front easier access to retirement funds

for emergencies nor is it not good news that's one of the downers of this plan here we were doing so great dave we're on a great roll a thousand until we got to stupid land here. And so here's what this means. Starting in 2024, you can withdraw up to a thousand dollars from your retirement account for personal or family emergencies. If you've been listening to the show for more than 10 seconds, you'll know that you should never tap your retirement accounts for emergencies. Yeah, you should have an emergency fund and leave your freaking retirement account alone and let it grow and make you rich. Absolutely. All right.

Dum, dum, dum, dum, dum, dum, dum. Here's an interesting one. Curious to get your take on this, Dave. Employers must automatically enroll you into a workplace retirement plan. This is nanny state stuff. Holding your hand. This is a we're going to take care of you because you're too stupid to take care of yourself idea. And so now when you join a company that has a 401k, the company is required to sign you up for the 401k automatically.

At an automatic minimum contribution rate of 3%. And if you don't want that to happen, you have to manually go in and opt out. You have to stop it from occurring. That's too much control. It's got a good intent. I want everybody to have a retirement account. That's a good thing. Yes, you need to be in your 401k, but let's say you're working the baby steps, you would need to opt out because you're not doing 401k because you're on baby step two. Well, and the other problem is if you are in a place to invest, you've got 3%, you don't realize it. You need to up that to 15% if you're out of debt with a fully funded emergency fund. So be sure you pay attention to that stuff.

Don't, you know, we're from the government and we're here to help. These are scary words, okay? A 3% rate is not going to get you very far in retirement. So we've got to do better for sure. Next, this has been one of some hot debate. Employers can match your student loan payments with retirement contributions. It's confusing. Yes. So this sounds like they're paying your student loan payments with retirement contributions. It's confusing. Yes.

Because it sounds like they're paying your student loans. Now, some employers are now offering a benefit that has nothing to do with this, just where they will help you pay your student loans off one way or another, whatever it is. They'll match you. They'll do whatever. It has nothing to do with anything as far as this stuff goes. This is not that this is you pay up to three thousand dollars

on your student loan and your employer puts up to three thousand dollars into your 401k which doesn't it's just like wouldn't that incentivize you to never pay off your student loans we want you to eat apples so we're going to chop oranges it's just weird it's it you mix these things up and and people are getting confused about it already. They think it means the government's going to pay part of your student or the employer's going to pay part of your student loan and match you on what you're putting on your student loan. They're not.

They have to put it in the 401K. So it's weird. Anything that gets more money against your student loan or causes you to do that, anything that gets more money into your retirement, I'm for all of that, but this is just convoluted and weird. Well, wouldn't you be pissed if you already paid off your student loans or didn't have any and Joe Schmo's next to you is getting an extra three grand in his 401k? That's a benefit, though. That's your employer offering a benefit. The employer's not required to offer this benefit. I'm curious to see how many employers do this. Yeah, I don't think they'll. Well, know you never know out there all right next up you can roll over unused 529 plan funds to a roth ira ding ding this one's good this one

i love because that's been a big you know point of objection people go well dave what if my kid doesn't go to college they don't use all the money that money's just wasted yeah it's not you can after 15 years your kid rolls it into their Roth IRA, no penalties. Up to the annual contribution. So you put $150,000 into a 529. Kid uses $75,000 or $80,000 of it, whatever's left in there, sits there 15 years growing tax-free in good mutual funds, and then they roll it into a Roth IRA into good mutual funds,

and it continues to grow tax-free, no penalties. That one I'm a huge fan of. I love this one. This is a fun one, too. Roth options are now available for simple IRAs and SEP IRAs. So, folks that are self-employed business owners, this is cool. I'm confused. I thought that was already there. I'm not sure they didn't. The Roth SEP, Roth Simple. Yeah, I'm not sure they didn't already have that, but I could be wrong. So it's good, though. Yeah, the Simple IRA is simply a 401K for small business, and the SEP IRA is a simple incentive match plan.

It's best used by a solopreneur, because if you have employees, you have to put the same amount in. You got to match it. You put in for yourself. So we'd seldom use SEP IRAs much, but simple IRAs are great for small businesses to open up, and now they can do a Roth. That's good news. And lastly, new emergency savings account option alongside retirement accounts. So this one's a little different than the previous one, but it's saying that the employer can set aside up to $2,500 annually for non-highly compensated employees in a separate emergency savings alongside their retirement account. So it's a little sidecar here.

Yeah. But is it invested? The problem is $2,500 is not enough for an emergency fund. And so then you've got the $1,000 you can take out of your 401k for your emergency, you've got it all over at the employer and so people get the idea oh my emergency fund is taken care of it's not there's not enough money there's very few of you that three to six months of expenses represents 2,500 bucks so this is a this is one of those head fakes that the government's saying hey look we did something and you didn't want to do anything because it's not it's not sufficient to cover it now they could do up to $10,000 in there or something,

that might cover some people's emergency fund. Not enough to do any damage here. I wouldn't use this instead of your emergency fund, and I wouldn't use the option to cash money out of your 401k for emergencies either as your emergency fund. I wouldn't do either one. I'd leave all of that alone. Well, credit where credit's due.

There's a lot of wins in here, and you guys can check out the entire article. We've got it linked in the show notes, wherever you're listening, of course, at RamseySolutions.com. But I needed a win today. I'm going to call this a win. I'm going to call it a win. And we can even allow President Joe Biden to call a win. He signed it. I'm sure he's already tweeted it.

He signed it, and so he gets a win on that. Way to go, President Biden. You don't hear that often from Dave. Not often at all. Can't shoot down a balloon, but you can sign this. This is The Ramsey Show. សូវាប់ពីបានប់ពីបានប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពីប់ពី Thanks for joining us, America. George Campbell Ramsey personality is my co-host today. Nick is with us.

Nick is in Louisville, Kentucky. Hi, Nick. How are you? I'm hanging in there like a hair in a biscuit. Love it. How can we help, brother? I recently started following you all on YouTube, and I'm trying to figure this all out.

I don't know if you go over it in your school or college, whatever it's called, university. But I have a question about tithing. I've been able to do it pretty well. And on my tax return, I know you say that it's just a refund, but am I supposed to tithe on it? Oh, your tax refund, would you tithe on it? Yeah.

If you've tithed on your total income, no, because that's just your money coming back to you. Let's say that you tithed on your total income and you took $5,000 and put it in a savings account. When you took the $5,000 out of the savings account, you wouldn't pay tithe on it. Because it had already been tithed on before you put it in there. A tax refund is exactly the same thing. If you're tithing on your gross income, are you?

Before you're tithing, before tax or after tax? After tax. After tax? Yeah tax? After tax. After tax? Yeah. Let's see. Let me think how the math would work then. So the refund. And I tie it on what comes in.

What you actually get in your hand is what you're tying in. Yes, what I get in my hand, whether it be a bonus or anything. And you paid too much in, which would have, if you had brought that home, you would have brought more home. In that case, you would tithe on the refund. Because if it was set up properly and no refund, that money would have come home and you would have tithed on it. Right.

Does that make sense? Yeah. So you're tithing on take-home pay right and your your take-home pay is too low that's why you got a refund because you had too much taken out of your taxes so if you correct this and had a zero refund you would be bringing home more the equivalent of that refund does that make sense right right And so it's a math riddle is all it is, but so let me just use that as an opportunity then to, you know, to go back to what we cover in Financial Peace University on tithing. Obviously, tithing is something,

it's a biblical guideline for giving a tenth of your income. Typically, it's observed by evangelical Christians like me and George and you, Nick, I assume, and by Orthodox Jews. Jewish tradition also respects and endorses the tithe as well, because it's an Old Testament item. It's their Bible, our Old Testament, so where it comes from so having said all of that uh just let everybody know this is not like a uh uh and i don't i don't sense this off of you nick i'm just using the fact that you asked the question as an opportunity to talk about a little bit but uh uh it you never tithe from a legalism standpoint or this makes God love me more, or he owes me something back because I tithe at the standpoint. This is simply me being obedient to my faith, and this is a baseline

of giving to do a rhythm of giving. And a lot of people tithe, I tithe on my gross before taxes, not after tax. And the point though is it doesn't matter because God's not mad at you or mad or more pleased with me because I gave more. That's not how this works. This is he, our heavenly father who loves us, is trying to teach us to be generous. And so a part of our rhythm is we make money, we give some of it. We make money, we give some of it. We make money, we give some of it. We make money. We give some of it. We make money.

We give some of it. And that's why the tithe is tied into our spiritual walk. If you're not a Christian and you're out there, you're not Jewish and you're out there, you still need to observe something like this to create, to build your generosity muscle on a rhythm basis, not on an occasional random basis. So really, really good question, Nick. Yeah, it's nuanced and the heart is the real issue and nick's got that part taken care of yeah the motive is great he's just wondering the nuances of this i'm confused by and you've always said in fpu gross net we can

have discussions all day and pull apart on the gross and that way when i get to heaven if i'm wrong i'm on the upside right so it's a joke it's a joke okay so here's yeah but it's always first in the budget for a good reason it's a reminder god does not need your money he's god he if he wants something to happen he'll do it you don't have to worry about it this is about him teaching you how to be generous him teaching you how to build your generosity muscle by working it out. Every time there's a paycheck, I lift. Every time there's a paycheck, I lift that generosity up. I lift it.

I do it. And it becomes a part of your life. Interesting study I read years ago, George, on this. It's worth sidebarring on because generosity is really the reason to build wealth. Change your family tree, take care of your family, your kids, your grandbabies, that kind of stuff. A godly man leaves an inheritance to his children's children. And so inheritance is a biblical process. And also to be unbelievably, outrageously generous and to push all that through. But one of the studies I found was they interviewed people asking them,

tell me about generosity. Tell me about a time that generosity is in your life. And when they interviewed old people of faith, they talked about a lifetime of this rhythm of giving steadily over time. When they interviewed middle-aged people, they talked about the one time that they gave something. When they interviewed extremely young people, like teens and even children, when they asked them about generosity, they described a time they received something. And the point being that as you emotionally mature, hopefully spiritually mature, you're going to start to realize what Nick is doing is whether you're a person of faith or not, it's a part of your emotional maturity journey because the more mature people are the ones that described a steady diet, a steady life of outgoing generosity.

The children described receiving something. And so adults devise a plan and follow what children do. It feels good, even applies to generosity. Man, that's incredible. Well, and it's such a great piece when we talk about there's only three things you can do with money. It's a tool. You can give it, save it, and spend it. And you've said that giving is the most fun you can have with money. It is. It just makes you more of who you are. And so if you're a generous person when you're broke, you're going to be real generous when you've got some money. Yeah. It increases your creativity, increases the quality

of your relationships. There's all kinds of data that your quality of life goes up and your probability of wealth building goes up as you increase your generosity and you live longer science is showing it's it's low as your blood pressure to be generous exactly it's amazing really does because your other centered instead of self-centered also for that reason generous people are more attractive uh you want to be around them, not because they're giving you money, but just because they're the person that holds the door. They're the person to help you pick up your groceries when they spill out one of those stupid bags and roll all over the parking lot, right?

Well, I found they're less stressed. Yeah, that's it. That's amazing. Love it, love it, love it. So that's the thing. So, Nick, really good question. Thanks for letting us have that as an excuse to get up on our generosity soapbox because i gotta tell you very few times do selfish people make you cry but generous people make your eyes leak when you start watching someone do something generous

it it gets up in your throat and you feel it your throat gets tight and you're like man that's just that's just and you're not even necessarily focusing on that person going, oh, that person is so cool. You're saying what they're doing is so cool. And there's three types. There's planned generosity, which is great. There's spontaneous generosity, which can make us cry. But then there's outrageous generosity, which is where the tears are just streaming down

our face as we see the video on social media. And there's such a beauty and joy to it. And we could all use a little bit more of that this year. Yeah. Mind-blowing generosity. That one i like it just blows somebody's mind and you know have this opportunity to do something that is it's just unbelievable it's just wow and those are get yourself in a position to have those moments and man when you're broke and all you're doing is paying payments to stupid mastercard. And man, when you're broke and all you're doing is paying payments to stupid MasterCard and Ford Motor Credit,

you're not thinking about other people. All you're thinking about yourself. And it's because you're trying to freaking survive. It's not because you're a bad person. But the more you get in control, the more you put together a plan, the more you can be other-centered. And it works.

That's good. And everyone needs to go watch Lesson 9 of Financial Peace University where you talk about this. It is, man, gets me every time. It's a good lesson. This is The Ramsey Show. Hey, George Camel here. If you love the show and you want a deeper dive on your money journey, we've got a weekly newsletter that gives you helpful articles and tips on following the Ramsey way. Just go to RamseySolutions.com today to sign up for the newsletter.

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