The Ramsey Show - App - Don’t Participate in the Toxic Money Culture!

Episode Date: June 9, 2022

Dave Ramsey & George Kamel discuss: Renting vs. buying when moving to a new town, Bitcoin scams on the rise, Letting your student loans go to collections, How much to save for a downpayment, The best way to invest. 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

Live from the headquarters of Ramsey Solutions, it's the Ramsey Show, where debt is dumb, cash is king, and the paid off home mortgage has taken the place of the BMW as the status symbol of choice. We're here to help people build wealth, do work that they really love, and create actual amazing relationships. Open phones on any of those subjects. The phone number is 888-825-5225. That's 888-825-5225.

George Campbell, Ramsey personality and host of The Fine Print, a podcast on the Ramsey Networks, is my co-host today. Again, open phones here, 888-825-5225. Jacob starts us off this hour in Atlanta. Hi, Jacob. Welcome to The Ramsey Show. Hey, Dave. How are you? Better than I deserve. What's up? Hey, so I just graduated college. I'm originally from a small town in Georgia. I'm moving to Atlanta. Got my first job as a financial analyst, making around $65,000 a year. I plan on staying in Atlanta for around five to ten years, and I know that renting would be easier. I'm trying to decide if I want to rent or to buy a condo. I understand that obviously renting gives you the flexibility,

but buying the condo, at least you retain some of that equity. So I guess I would love some advice. Cool. Well, congratulations on graduating with a fantastic job. That's awesome. You got any debt? No debt. I did Army ROTC in college, so I just commissioned as an officer in the reserve,

so a huge blessing. Right. How much money do you have? So I have around $100,000 in total assets. I've got $20,000 in the bank, and then the rest, the other $ thousand dollars is uh in in-depth funds wow good for you well done where'd you learn all this stuff um so i heard about you a long time ago um you actually influenced my brother a lot and then he got me caught on to that when i was in a freshman in high school um so yeah just you know saving everything and investing it essentially you've done really well man so that's what you're what 22 uh i am actually 21 about 10 22 yes yeah good for you sharp young man yeah i would rent for a year and let's just get settled into the new gig and settled into this uh post-college phase of your life and that will probably inform where you want to live before you buy you learn the traffic patterns in atlanta which would be information that you want

you don't want a two-hour commute to work right and so uh and you're going to kind of figure out the area of town you're going to run in where you're going to hang where your buddies are going to be where you're going to go to church whatever it is you're going to run in where you're going to hang where your buddies are going to be where you're going to go church whatever it is you're going to do and what your social network looks like and that's going to you know kind of settling into the city a little bit for a year is going to help you pick a better condo one year from today and during that time you can pile up a bunch of cash you're almost going to pay cash for this thing right no absolutely that was my plan was to try to put as much cash you know yeah try to get close to 40 50 for a down payment yeah i'm thinking you know you got 80 now

you got your emergency fund and you know all you got's rent and you're making good money you're used to living like a college student so you're not going to spend out your years i hope and um you ought to be able to pile you ought to be able to pile onto that 80 pretty healthy in a year what do you think you could add to it um you know i'm trying that was that was another kind of question i had like i was thinking about does the 25 i know you're 25 after tax school does that still apply to buying as well yes um because i'm hoping gotcha because i'm hoping to add i don't know probably at least 15 to 20 more thousand is the goal. And then it'll probably grow another 15, give or take, during this year. So, yeah, I'm thinking next spring you start looking around.

And I just think you'll know your way around Atlanta and the world a lot more than you do today one year out of college right right no absolutely 100 and uh and then the other thing i'll warn you of is um if you were to meet uh uh your future wife and uh start dating uh and get married you will discover that you have bought the wrong condo at that point. You will be notified. And so you'll sell it, and you'll make some good money, and you'll buy where you should have bought that you didn't know. The cabinets will be the wrong color somehow. It's a joke, but it's also just a lot of truth.

Good wisdom. Yeah. Jacob is with us. No, that was Jacob that we were talking to. We got him. Open phones here at 888-825-5225. The housing market, we were just talking about it over the last couple of years, has been unique. The Federal Reserve is up the ante, raised the federal funds rate again. It's got a lot of people worried.

If you want to learn about all of this stuff, go to ramseysolutions.com slash rates. And if you're ready to buy or ready to sell, we were talking about it in another hour, George. This is a unique time in real estate, the real estate rhythms, the rhythms of the real estate market. Usually, if it's a good time to buy, it's a bad time to sell. If it's a good time to sell, it's a bad time to buy. You've heard buyer's market, seller's market. Exactly. You've usually got one or the other.

And we're kind of like coming up over the rise on an apex. We're kind of at the balancing point right now. It's been a seller's market for a while, a shortage of housing, and there still is a shortage of housing. There's still more demand than there is supply, but demand has cooled off in the last 60 days dramatically compared to, say, this time last year and um is that a major part due to the interest rates going up it's just the economy is cooled in general yeah interest

rates are up inflation people are sitting on the sidelines and so it there's still more buyers than there is sellers but it's nowhere near like it was so the what that is going to give us is it's going to slow down the price jumps. These insane increases in price are going to slow down. And the competition of 150 over asking and crazy offers. It's going to slow down. You're going to see more normal price increases. But it's still a really good time to sell because the market is still hopping okay it's also uniquely a good time to buy because the uh you know some buyers are saying you know we're going to wait on prices to come

down prices are not coming down on houses if you go you have to you can only you can't find times in history that a recession or high interest rates have caused house prices to go down let me give you an example in 1982 interest rates on houses had under jimmy carter had gone to 18 percent 17 and a half percent fixed rate whoa house prices didn't go down stayed isn't that weird so interest rates going up will not necessarily cause house prices to go down and that's an extreme i mean we're right now at five and a half six not at 18 which feels crazy because they've been so low with the past yeah it feels like because they've been at three you know but uh but but you know interest rates are going to cause this this housing bubble to burst i'm going to wait on prices to go down you're dealing with a false hypothesis that's not going to occur, ladies and gentlemen.

Okay, so five years from today, every year from now for the next five years, the price of a house is going to go up. So this is as good a time as there ever was. If you're in a position, if you're out of debt, you have your emergency fund, you have your down payment, go to RamseySolutions.com, click on ELP, and get you an agent and go buy a house. Right now. It's a good time to buy a house.com, click on ELP, and get you an agent and go buy a house. Right now. It's a good time to buy a house. Well, interest rates might go down. Well, if they go down, refinance and get rid of that mortgage.

Okay? This is as good a time as ever to sell because the market's still hopping. Go to RamseySolutions.com, get you an ELP, an endorsed local provider, get that house on the market. This is as good a time as you're going to see in the next five years to sell a house. Right now. This is as good a time as you're going to see in the next five years to sell a house. Right now. This is the Ramsey Show. Did you know, statistically, when it comes to life insurance and protecting your family,

that women are more likely to be uninsured or underinsured than men. This doesn't make any sense. Women make up half the workforce, contribute mightily to family incomes, and in many cases are the breadwinners and take care of their families 24 hours a day. This is one of the most overlooked areas when it comes to financial planning. Maybe it's a relic of the past, but a loss of income or the need to replace family care is equally important for women as it is for men. Single moms, working moms, and stay-at-home moms all need term life insurance. Rates are actually lower for women, which is why I send you to Zander Insurance. They shop the top term life companies to find the lowest rates available. You can compare rates online at Zander.com or call 800-356-4282.

This is something every family has to deal with. That's Zander.com or 800-825-5225 george camel Ramsey personality is my co-host today. You jump in, we'll talk about your life and your money. So George, not only has Bitcoin dropped, what, 60-something percent now since September. Big crash. That's not six, that's 60 percent. Ouch. That means you turned 100,000 into 40. But now we're seeing that a billion dollars has been lost in crypto scams, according to the Federal Trade Commission.

This is wild. Cryptocurrency scammers have stolen over $1 billion from 46,000 people since the start of 2021, a federal trade commission report says ftc rang the alarm bells on friday saying crypto related crimes amount to about one out of every four dollars reported lost to fraud more than any other payment method the median individual reported loss was twenty six hundred dollars this is wild crypto scams are becoming increasingly popular shooting up 60 times higher than in 2028 nearly half of those who reported losing money to a crypto scam in 2021 says they were lured in through an online post or a social media message so So how are they getting scammed? Do you know? Well, on Facebook and Instagram, they lure you in with, you know, they get you to click the link,

go to a website. And there's been a lot of actual scam accounts impersonating me trying to message people about crypto. And the people know it's spam and scams. Once they go, George is telling me to invest in crypto. I know this is a scam. So they report it and they let me know like dave ramsey's only get a credit card exactly not a great move to the scammers out there and so that's what's happening and so people get lured in and they go well this seems you know this seems like a good deal this seems like i'm gonna win big on this thing so they click it and they give them access to their crypto wallets and all kinds of things. What are they buying? I mean, what's the scam? What's the pitch?

I have no idea. There's all kinds of different ones out there across the board. I don't know that they have any details. In both cases, scammers promised substantial returns to their investors, but instead pocketed the money into their own crypto wallets. So they're promising you, hey, give us the money. We're going to give you an amazing return on your money into this new crypto coin. And all of a sudden, those returns disappear and they pocket the money instead.

And this is happening all over. In February, a federal grand jury in San Diego indicted the founder of BitConnect for allegedly orchestrating a $2.4 billion global Ponzi scheme. Founders accused of misleading investors about the cryptocurrency's lending program, claiming the company's proprietary technology would bring substantive returns to investors by tracking cryptocurrency exchange markets. So they all come down to this. False promises of easy money paired with people's limited crypto understanding and experience. So no one truly understands it and they go, well, I'll do it. You're saying someone who bought crypto would fall for false promises of easy money? I just read the article. I can't believe that.

Don't come at me in the comment section. But that's the truth. It's so new. It's so volatile. The technology is there, and so people are going, well, this is my chance. Kind of my point is the very person who buys crypto to start with is looking for a cutting-edge, easy, sophisticated, technologically easy money. And so when someone presents them with another cutting-edge, sophisticated thing, then they're more likely to fall for that than the average Joe

because they already are biting it. They're already chewing on that hook. They're trying to get in on the ground floor of the next thing. They're trying to choose the winning coins. In other words, the scammers are taking them through the same psychological door that they went through to buy Bitcoin in the first place, and then they get scammed. So they're more susceptible to scams. And it's all unregulated. So you're not protected.

There's no FDIC here going, hey, we'll cover your money. And so you just lose this money. That's it. It's not hard to steal people's crypto. Man, we've come a long way since the Nigerian prince. This is the modern day version. At least I got a nicely worded email from the Nigerian prince. I remember getting copies on a bad copy machine by snail mail from the nigerian

prince wow that took effort yeah they and well it had my name personalized across the top of this of this copy that had been made like 8 000 times so it had the little lines of stuff on it because you could tell it was like it's like a mimeograph machine or something like that yeah i'm old enough i used to get those from the Nigerian prince. I kind of miss those days. Simpler times in the scamming world. Simpler times. Man.

What was the one? It wasn't the Spanish flu. It was the Spanish lottery or something that ran through Canada. Really? It was another one. Well, in 30 years of doing this, you've seen lots of scams. About 20 years ago. Yeah.

So Glenn Freche, who wrote the book Con Man or Saint, we talk about this in the building wealth live event. He was claiming he might be a saint, but he wrote the book from prison. So I'm suspecting he was wrong, that he was probably a con man. He ran a Ponzi scheme, a true pyramid scheme, and got put in jail for it in the 70s. And but he was he was a world-class con man and uh he said one of the quotes i read that book you know when i was a teenager i don't know how i ended up with it but um uh the quote i remember from the book more than anything else i went and pulled it out for this event that we're doing that he said you can con someone of any intellect any level of education if you can activate greed or fear

and um and they also they um and really in a sense the part of the greed one is pride you know like you're in on something the cool kids are on it. Nobody except the cool kids are in on it. And you're one of the cool kids. You know, you're not, you know, people who aren't sophisticated don't understand Bitcoin. And you're obviously sophisticated because you understand Bitcoin. And so you're in Bitcoin. Since you're in Bitcoin, we're going to give you this other opportunity here. Since you're so smart.

And a billion dollars in scam oh not to mention how many billions is it is it over a trillion now in lost value that it went down 60 percent yeah so the total market value loss of bitcoin i i read it it was an astronomical number. It's like a trillion dollars or something when it went from, you know, when it's gone down 60 percent. That means people had value at some point that hypothetically they could have cashed in somewhere and didn't. And so they have now ridden this thing to the bottom. Yeah, we're seeing some really sad stories of how much people are losing in this who they had a million dollars in it and now they have nothing i was just reading a heartbreaking story about one guy who's honest enough to share his losses which is pretty rare most of them only

brag about the wins well it's like a bad golf game or a fisherman that's right which you never had a bad golf game so you don't have to worry about that. I've never caught a fish either. Never. But it's pretty wild stuff. So, I mean, you know, we talk about buyer beware, but with crypto, it's a whole other animal because there's a whole technological piece that most people don't understand. And I think I'm a pretty smart guy, and the more I look into crypto, the more confusing it gets. And I think they did that on purpose. No. Just – that's like whole life.

It's really complicated on purpose because they go well you don't have to worry about it it gets complicated just trust me give me the premiums i'll give you the returns to me trust me trust me yikes oh man this is trying to find out what this thing has done let's see here in one year the losses yeah it's it's astronomical this is wrong. Okay. I was trying to pull it up on a website while I'm on the air. That's a dumb thing to do.

I'll tell you that this guy, he reportedly, he has a whole thread on Twitter, how I went from a crypto millionaire to broke in six months due to leverage, a gambling addiction, and an accelerating negative spiral. And he goes through in the thread about every single piece of the puzzle that caused him to lose this million dollars, and now he's got nothing. He's sad. He could have retired. He could have done a lot of things with that money, and now there's a lot of regret.

It's sad. We like to make fun of crypto, but I don't like anyone losing a lot of money. That breaks my heart. I don't want anybody hurt. Yeah. But I am more than a little bit. As much criticism as we took from the crypto kids

a little vindication I kind of want to go this is the Ramsey Show We'll be right back. Josiah and Anna are with us in Wichita, Kansas. As it says on my screen, you guys are debt-free. Congratulations. Thank you. Yes, we are. How much you paid off?

We paid off $88,568. Good for you. And how long did that take? About 34 months. Good for you. And your range of income during that three years? Our first year married, we started at we started at 80 000 and then last year we were at 96 good what do you do for a living i'm a veterinary technician i manage a

veterinary hospital and uh i work at ups very good what kind of debt was the 89 000 well it we started with 85 000 was our mortgage and then added some medical debt for our first child. Okay. So you paid off your house? Yep. Yes, we did. Wow. Look at you, weirdo.

Oh, man. Very good. What's the house worth? Last appraised, it was now worth about $160,000 with the land. Wow. Good for you guys. You're how old now? I am 27.

And 33. And you have a paid-for house. Yes. You're so weird. I mean, none of your friends have paid-for houses. Yeah, it's pretty rare for our age. Yeah. No question.

Well done, you two. Very well done. Okay, so what starts this journey at this young age for you guys we got married yeah but i mean what made you decide you're getting out of debt a lot of people get married and they go in debt for 30 years the major start was growing up both of our sets of parents forced us to go through financial peace oh your financial peace babies oh yes oh yes my mom made us go through it two times wow and so when you started dating how long before you compared notes and figured out that both your parents were weird

well we actually grew up in the same church so oh you already knew parents were weird from the beginning you already knew it's it's like a whole group of weird i love it whole group of weirdos very cool i love you guys that's awesomeness. So, yeah, because of our parents, we were very blessed, and we got married already debt-free just with the house mortgage. Man. And that set you guys up to where you have paid for houses in your late 20s, early 30s. Oh, yeah. Yeah. Wow. That's incredible. That's a changed family tree back to their mom and dad.

Yeah. I mean, this is an extension of the family tree that was changed with mom and dad. It's the truth. And, actually, they're mom and dad. This is an extension of the family tree that was changed with mom and dad. It's the truth. And actually, it started with my grandparents. My grandpa was the first one to bring Financial Peace to our church. Whoa. Babe, are you that old? You're Financial Peace grandbabies.

Oh, my gosh. Yes, we are. Yes, I'm that old. You know what? We hope our kids one day will continue the trend. Man, that's amazing. My great-great-grandpappy went through FPU. That's good

that's fantastic you guys this is so cool very neat very neat okay so i don't know uh what do you tell people the key to getting out of debt is have great smart grandparents i don't know what what do you what's the uh what do you guys think the key to getting out of debt is you did it you made 34 months you knock out 89 000 well we said that you've just got to stay focused on it because actually on paper when we were budgeting when we were engaged we were set to do it in less than two years but then after we got married it was just kind of a oh well this will only add one more month so we'll do this and then at the end of that first year we realized we had not made the progress we should have and so we just kind of buckled down and got it done

after that well and you go ahead and have some babies while you're at it, right? Well, yeah, that too. Two babies later, that didn't help. That might slow it down a little. And the first one had a few medical bills, huh? Yeah, just the regular. He was fine, just regular, the hospital bill. And then we had enough saved up to cash flow number two here 10 weeks ago.

Oh, okay. All right. So that way the second one's not in danger of repo no okay you say a few weeks ago yep 10 weeks ago our daughter was born oh congratulations oh she's precious we just see her on youtube yeah that's cute i made him promise when we got married that when we were debt-free we were going to come visit you there in Tennessee, and he forgot that he'd promised. But the timing didn't work out for us to be there live, but we were actually there last Wednesday, met you, and got a book signed. Oh, my goodness. That's awesome.

Oh, my gosh. We should have worked that out. Oh, my goodness. Now, it worked out. He kept his promise, and we get to do this with you. Wow, you guys are amazing. I'm so proud of you. Congratulations.

We've got a copy of Baby Steps Millionaires for you. That's the next chapter in your story. We're going to give you a one-year subscription to Financial Peace University, which you need to give away because your whole family has been doing this for generations. And so you can get somebody else on this train man that's so cool and same with the total money makeover book we'll send that to you as well give you some things you can pay it forward with i'm so proud of you guys what a great story grandpa brings financial peace to the thing they meet it to the church they meet at the church after their parents have gone through it then they both are required to go through it as teenagers and now they're 27 years old with a

paid for we're going to see more financial peace grandbabies here soon i'm just telling you man they're right there i'm liking it way to go guys good inspirational stuff all right josiah and anna wichita kansas 89 000 paid off in 34 months, house and everything. Weirdos. They're making $80,000 to $96,000. Count it down. Let's hear a debt-free scream. Three, two, one.

We're debt-free! Yeah! Man, oh, man, oh, man. Wow. You know, when i was first doing this stuff myself i i you know we'd gone broke we lost everything starting to build a little bit of wealth back up and you know clearing off the irs and some other debt that survived the bankruptcy and uh so that we're debt free and we're starting to go, and I'm just like, okay, we're going to handle money God's and Grandma's ways with common sense.

The culture thing is going to think I'm crazy, but once you've been broke, you don't care what other people think. But one of the things, George, that went through my head was I am going to change my family tree. This is the last ramsey in this branch that's going to have debt because i'm going to have so much wealth built up and i'm going to teach them generationally and make it a thing a ramsey family thing that we handle money with integrity and with maturity and with wisdom without debt and someday you know i'll see

my grandkids and at that point my rachel was a baby you know someday i'll see my grandkids as adults and they will never see a mortgage they will never see debt they will never see it we're gonna you know we're breaking this down and little did i know that i'm gonna get to meet people like josiah and anna that that are third generation going through financial peace university and so now that's happening for their family and millions of other families like theirs all over america so it wasn't just my little dream of me never no one in my lineage ever having debt again now that that that's broken that's those kids right there man that's very cool the ripple effect of that decision you made many many years ago to go never again how that's affected so many millions of people

and uh you raised some great kids on top of that and but the point is that everybody listening can just decide the same thing today. As for me and my house, no more. I'm done. No more. I'm not going to do what this crazy butt lost its mind culture. Have you all noticed that people in America have lost their minds? I mean, they're crazy. There's just some weird, wacky stuff going out there that people are acting like everybody should go along with.

I mean, it's just nutty out there. And so, you know, those of us, the children of common sense have to stand up, you know? Well, people call us crazy, and at this point, I'm just going to choose my crazy, and I'm going to choose the one that's filled with peace, no anxiety, wealth anxiety wealth legacy i'll choose that crazy every day over what's going on in the culture agreed agreed and uh you know it's i do not need to keep up with the toxic culture the toxic culture has lost its mind in virtually every category every department is cray-cray and so it's just you know we we were not that far lost all of us 20 years ago that all you people that have come along in the last 20 years and decide you're going to straighten all of us out no you're the crazy ones and we are calling you out now we're saying you're nuts and we don't want to be like you you're crazy i don't want to be

like you it's nutty out there and i don't need to be like you and if you don't like it i'm fine with that because i don't want i don't just be mad that's perfectly good with me you know we'll choose our crazy like george said i'll choose the good kind yeah i'm gonna choose the common sense kind of crazy this is the ramsey show Our scripture of the day, Proverbs 11, 14, where there is no guidance, a nation falls. Our scripture of the day, Proverbs 11, 14, where there is no guidance, a nation falls. But in an abundance of counselors, there is safety. Admiral Nimitz said,

Leadership consists of picking good men and helping them do their best. Open phones here at 888-825-5225. George Campbell, Ramsey Personality, is my co-host today. Zach's in Kansas City. Hi, Zach. How are you? Hey, I'm doing pretty good. How are you? Better than I deserve.

What's up? Hey, so about a year ago, I had to step away from school after falling on hard times, and I recently found out that my outstanding balance with the school was about to be collected on. And now I'm in a bit of a better position to pay a lot of that off. I was wondering if I should let it be collected and maybe negotiate and kind of get a deal from the collectors rather than just try and pay it all with the school? Well, you know, I'd call the school and offer them a deal. It sounds like your real story, like the truth, would be a good story.

Okay. You know, I fell on hard times. I had to abandon, you know, my pursuit of the degree. And so, you know, so for the money I've spent there, I'm getting nothing. And I've saved up a little. I don't have it all. But if you guys would like to do a settlement, I can write you a check today and make this call it a day.

And I'm asking for some mercy. Yeah. How much do you owe that uh right now it's six thousand dollars okay how much money do you have uh right now i have six thousand dollars yeah call them and settle it deal with it now be done with it don't screw some collector awesome get a hold of somebody get a hold of somebody in leadership and administration at the school how big a school it's a pretty big school um i don't know the population but uh it's a pretty big school yeah okay all right so like kansas or kansas state or something like that? Yeah. Okay. All right. Yeah.

Just call them. Just talk to the admissions office and say, who do I talk to about clearing this debt, settling this debt? And then just talk to them and go, hey, listen, do I need to talk with like your boss or something? Because I don't know how this works. I don't want to insult you or something. But who have I got to talk to that's got the power to do this? Because here's the situation.

I went through this, this, and this, and I had to leave school because of that. And tell them the whole story. Not a 30-minute version, but a four-minute version. And honestly, I mean, I've got a little bit of money. I'm still basically broke. But I want to settle this and do what's right and try to clear the debt. Can you guys help me with some mercy? Gotcha.

I think I'm going to do just that do what i'm gonna do just that i think yeah yeah i think it'll work i mean i don't i it might not you might just have to write a six thousand dollar check but either way you're done right right yeah i'm gonna go ahead and get out of dodge and put this in your rearview mirror move on with your life i think your life will be better not having this hanging over your head and having to screw with somebody for the next six or eight months waiting to hand it to collections to maybe get $2,000 saved or something. Nah. Not worth it.

Move on with your life. There's a power. There's a financial benefit to cleanliness in your life. Not having your head cluttered and things chasing you from the rear view you know you just there's no ghosts in the closet no monsters in the closet you know it's not worth the brain space the emotional energy your time it takes to even fight all this you got the money you can concentrate on the future and winning instead of concentrating on the using your bandwidth on the monsters uh gerald is with us in new york city hi gerald how are you

i'm doing well dave how are you better than i deserve how can we help uh so i'm getting married in august uh fiance and i are both debt free paid off a little bit over a hundred thousand dollars in debt which is awesome way to go on the wedding of course way to go thank you um so my question for you just kind of thinking ahead, you know, eventually we're going to settle down and we're going to look to get a house. I know you recommend putting down 20%, but I was thinking me being the saver, if we can save more than 20%, is it beneficial to put that down or should we take that extra that we saved and just add it to our

fully funded emergency fund or even invest it? I would absolutely put it towards the house. We did something very similar. We put down 45% on our house and it allowed us to pay it off a whole lot faster. And that's the goal. You paid it off in what, two, three years? 26 months. 26 months. And part of that was because we worked on the front end like you did. We're so diligent to save up and put a giant number down, and so that's only going to help you because, number one, it's going to be a smaller mortgage payment every single month, which allows you to have more margin to put on top of that.

So I love this plan. You guys are crushing it. Yeah, that's very, very wise. That's very smart. Do the George plan. All right, Bill is with us. Bill's in Midland, Michigan. Hey, Bill, what's up?

Hey, how's it going? I've got a quick question for you. My wife and I are both self-employed, and we set up Roth IRAs last year. And just wondering if other than that, because there's obviously only a limit of what you can invest into that per year, what are other best investment options are for being a self-employed people? Do you have employees?

I do not. I'm a self-employed massage therapist, and she has two employees. She owns a CrossFit gym. Okay. All right. For you, it's a no-brainer. I would do a Roth SEP, a Simplified Employee Pension Plan, an SEPP. Okay.

Okay. And you can put up to 13.6% of your net profits in addition to your Roth IRA into that, and you can do it as a Roth, and you can do it in mutual funds. Sit down with your SmartVestor Pro. Click SmartVestor at RamseySolutions.com and sit down with one of those guys or gals, and they can lead you right through that process. Now, the SEP has a requirement that whatever percentage you put in, you have to put in the same percentage of the employee's income that have been with you more than three of the last five years.

Okay. So if your wife has employees that have been with her more than three years and she puts in 10% into a SEP, she's got to put 10% of their income into their SEP, so it doesn't work real good then. Sure. Okay. She would be better off to do what's called a simple IRA, and a simple IRA is a 401K for very, very small businesses.

It doesn't cost much to set up, and you can fund it up to 401k numbers, but you're required to match up to 3% of the employees' money that they put in. Okay. If they put nothing in, you've got nothing in it, and you've just got a good plan but that three percent match is nowhere near as much as you'd have to put in with a sep if you've got employees have been with you a long time and you can set that up as a roth as well so probably a sep for you probably a a simple ira which is a 401k for small businesses uh for. And she's going to have that mandatory match. But either way, you can get a lot more money in between those two things.

You know what, $20,000, what's the max? $20,500 on a 401k. For her, that'll be the max on hers. And yours will max out at like almost $30,000, but it's a percentage of your profits is the max up until you get to that limit. And so you can push push all that through smart investor pro can teach you every bit of that they can lay it all out for you you can pick the same mutual funds you put in your roth or different ones if you want um and

try to do them all as roths as well but uh you can get a lot more money into this stuff now reminder bill if you're a baby step four you still got a house mortgage you don't put more than 15 of your household income into all of these retirements combined so that's your max because we want to put everything past that into paying off the mortgage as fast as possible yeah and a good reminder for those that are self-employed that you do have options i've got some messages this week and people are going i'm self-employed so i guess i can retire, and I can't save for retirement. And so they don't know that these options even exist. Those are great.

That little simple IRA, that little 401k plan for small business, is an incredible product. We used that here for a long time, and we hit the maxes on the size of the plan that required us to go into a more traditional 401k, which is fairly expensive to operate for the company. But that little simple 401k is a great, great product. And, again, get with SmartVestor Pro.

They can help you do every bit of that. George, good show. Awesome times. Thank you, Dave. Good job to Austin, Ben, Zach, Andrew, James, and Kelly. I am Dave Ramsey, your host. We'll be back with you before you know it. In the meantime, remember, there's ultimately only one way to financial peace,

and that's to walk daily with the Prince of Peace, Christ Jesus. Do you love a good Dave rant? Want to see the latest Ramsey Show videos going viral? Check out your favorite moments from The Ramsey Show on YouTube. Go watch and subscribe to The Ramsey Show channel on YouTube.