The Ramsey Show - App - When Should I Start Looking for a New Job? (Hour 3)

Episode Date: July 4, 2022

Dave Ramsey & George Kamel discuss: How to pay for college, What your best investing options are, How much to save for a house down payment.

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. George Campbell, Ramsey Personality, is my co-host today. As we answer your questions about building wealth, doing work that you love, creating amazing high-quality relationships. This is The Ramsey Show. The phone number is 888-825-5225. Deb starts off this hour in Des Moines, Iowa.

Hi, Deb. How are you? Hi, Dave. Yes yes this is deb my husband and i were basic followers of the dave ramsey way um we always had one difference he kept wanting in his 40s and 50s to sock money away for retirement i wanted to pay the mortgage off our mortgage was at a very low rate so he thought we'd be better off paying the mortgage off. Our mortgage was at a very low rate. So he thought we'd be better off paying the mortgage and earning that retirement money, getting it in those IRAs and stuff at a higher interest rate. So my one concession was, okay, before you retire then at age 60, and he retired at 62, we're going to pay off that home mortgage, which we did. So he retired at 62. We're, you know, everyday millionaires. I'm going to retire this year at 63. My 40 year old son is getting

married for the first time. I told him and his fiance, my one regret was we did not pay off our mortgage sooner. And my son's coming back at me with that same argument. Mom, why would I pay off the mortgage when I have a low interest rate if I can make more money putting the money into investment? So, Dave, what can I tell him? It's going to be hard to convince him against his will. I mean, you can give him some tools, resources. Does he know about the Ramsey plan?

Basically, he does. And beyond his home mortgage, he has no other debt. Okay. Yeah, we hear this argument a lot, and it looks good on paper. But we found that when you actually do this stuff and when you survey all these millionaires with paid-for homes, none of them are going, you know what? I kind of miss my mortgage.

I want to go back into debt. And when he frees up that mortgage payment, guess what he can do now? Invest way more than he was. So does your husband think that he is now an everyday baby steps millionaire because he didn't pay off the house and invested the money? Does he think that's how he became a millionaire? That's a good question. I've never asked him. Yeah.

Because I think he would tell you that's not how he became a millionaire. The way he became a millionaire was he steadily invested and he controlled his expenses, and that enabled him to not only become a millionaire but also pay off the house which added to the process so the answer to the question is number one you're not going to tell a 40 year old anything um you know he's going to he's going to do whatever he wants to do so george is right my grandmother's saying applies those convinced against their will are of the same opinion still. If he actually does want to engage a conversation, which it doesn't sound like he does. It sounds like you do.

But if he does. Except his girlfriend or his fiance agreed. She kind of took my side. She did. So maybe you do. So we're having a good, healthy healthy fun family argument like the ramsays do every meal okay yeah i probably did we all we all argue with rachel about her conspiracy theories at every meal so okay all right so you gotta have some fun right so uh well the answer

to the question or the answer to the argument is several fold. I have approached it in my life from about three or four different angles. And every one of those angles has led me to pay off the house. The first angle I approached it from once I went broke with borrowed money on real estate. I was a baby Christian and I couldn't find anything in the Bible that said anything good about debt. You're a fool. You're a slave. It's unwise. It's not a salvation issue spiritually, and it's certainly not even a sin biblically,

but every mention of debt in the Bible is negative. So as a person of faith, I had to say, say okay my heavenly father says this is a dumb idea biblically speaking debt is stupid okay why would he say that because he loves me if the best way to become wealthy is to borrow on your house and then take that money and invest it in the stock market okay so that first step is i entered it through that argument then the next argument i entered into was this idea of risk debt equals risk i think we can all agree to that more debt equals more risk less debt equals less risk no debt equals virtually no risk and so and you can tell that by when you say okay if borrowing against your house at three percent or five percent and investing it in the market in a mutual fund at a 10% rate of return or 12%

rate of return, whatever, I'm making that spread. If that is an accurate mathematical formula, why would you not borrow $300,000 on a $100,000 house? You would borrow all you can up to your eyeballs if you're always going to make a seven or an eight percent spread right right but when you ask somebody well why don't you borrow two million dollars that way then that put that puts them in freak out mode because when you put the absurd on the table no way it makes your emotions kick in and your emotions are where you experience risk not in your intellect so your heart is where you feel risk your head is where you do risk, not in your intellect. So your heart is where you feel risk. Your head is where you do math.

And so your heart starts beating like, oh, God, no. Well, that's because now suddenly you're equating risk with debt. And in his discussion, he's got the debt small enough in his mind that he doesn't equate it to risk. Follow me? Right. So all of that to say that in sophisticated financial circles, which your son doesn't run in, we actually are taught to adjust a risky investment

with an unrisky investment or a low-risk investment with a high-risk investment, where it's actually a mathematical process for adjusting those two for risk to where you can compare them apples to apples. So the high-risk investment after adjusted for risk, the rate of return would come down. The low-risk investment after adjusted for risk would come up, and then you could compare them apples to apples. And there's a statistical measure of risk called a beta, which is the measure of the hill and the valley and the frequency of the hill and the valley

when you put it on a chart, that measures risk. If you entered that and you actually used a real math formula for your son's naive math formula that's incorrect, then you said, okay, we're taking on more risk, so we can't really count the entire spread from the mortgage rate up to the market rate as spread because we have to adjust for risk and we adjust for risk it neutralizes the benefit of the borrowed money there's your academic answer

i gave you a spiritual answer academic answer okay now let me give you one more the borrower is slave to the lender so that must mean slaves think differently they have different relationships because they're not in control of their lives they keep a job they wouldn't keep otherwise i can't quit this job i have a house payment i can't tell the boss to take this job and shove it in a toxic low integrity situation i have to keep the job because i have a house payment so you keep a bad job with a bad boss until it ends up quite caving in on your head and you end up making less in your life because you're forced into stuff, like slaves are. You make more money, you have better relationships, you take less risk,

and you make money faster if you don't have a mortgage. Your son is so wrong, it's unbelievable. This is the Ramsey Show. In an uncertain world, being a good steward of your money is more important than ever. While some circumstances can't be controlled, there are items within your budget you can take charge of, such as your health care costs. For nearly 40 years, Christian Health Care Ministries, or CHM, has provided a budget-friendly means of sharing for medical bills when our members need it. Learn more by visiting chministries.org slash budget. That's chministries.org slash budget. Christian Healthcare Ministries is a Ramsey-trusted provider.

George Campbell Ramsey Personality is my co-host today. Laura's in St. Louis. Hey, Laura, what's up? Hey, hi, Dave and George. Thank you for taking my call and thank you for what you do. I actually became a financial advisor because of you. Wow. Very cool.

We're honored. Thank you. Yeah. Thanks. And I got my CFP. Good for you. I'll do the best I can. So I started from scratch and built a nice business.

However, I'm in an area that is kind of overrun by men, and I am the one that they bully. So I've made an offer with another firm. How do you make that decision, and do you think my clients will follow? Because the idea of starting over scares me. Sounds to me like you've already made the decision yeah but yeah it's just I'm going to jump off of this diving board and I know I'm not going to get

hurt but I've never done it before and so it still scares me. Right. But I'm going to jump. That's really what you just said. You're not going to stay there. You have too much self-respect to stay in a situation that you just described to me. My fear is that the clients won't follow because I can't contact them for a year. Your fear of that does not supersede your fear of staying in this toxic situation. True. So you're leaving.

So build an emergency fund before I leave because I'll be starting over with no salary. You single? No. You broke? No. Okay. So why do you have to do all that you're all right you're not gonna go hungry and here's the thing okay um you built this book of business that did not come because of

one of the bullies right right so why in the world would they stay with the bully they came to you in the first place. True. I mean, from a practical standpoint. Now, do they have any kind of a legal hold on that book? Yes. Oh. So what happens if your client walks in and says, I'm going to leave and I'm going to go to Laura?

Nothing. But you can't solicit them? Yes. Okay. So you've got a non-solicitation when you leave, but if they come to you without you reaching out to them, that's okay? Yes. Okay.

So you can't proactively. How often do you usually have contact with them? With my top 100? Mm-hmm. At least quarterly. Okay. So kind of walk it through with me what do you think will happen when top 100 calls in because you haven't called them because you're not allowed to and they say oh laura left

i would imagine they would ask where i went will they tell you tell them them? They have to, by law, send out a letter saying where I went. In advance? Yes. Well, as soon as I put in my resignation, when I leave the firm, then they have to send out a letter saying where I went. And the new firm is willing to do all sorts of advertising. Oh, this is a no-brainer. Sounds like free marketing to me.

They're sending out a letter marketing your new company. Listen, you're going to get 60 or 80 of them because you're a relationship person. You built relationships with them and trust with them. They work with you for a reason, and it's because you're Laura. It's not just because you know stuff. That's what someone else said. I just wanted to hear it from you.

Well, I mean, you and I both know the CFP world, okay? Yes. And there are CFPs that are relational to the point that you will end up working with some of these people's grandkids over the decades. And then there are CFPs that are certified financial pharisees that's true too and they're they're they're legalistic maniacs and all they are is super nerds and they have the relationship skills of a dead doorknob right right and that i mean that's the business that you're in and and you you know, so you got no competition. That's why the Dave Ramsey thing is such a big deal.

Because I was the first guy who said money stuff out loud in a way that wasn't so nerdy and talking down to people like they were all idiots. I go, hey, that's stupid, but I'm stupid too. I don't go like you're stupid and I'm smart, you know. And so that's the world. You're going fine you're gonna do fine how long you take you build this book of business eight years oh you're gonna be fine how old are you 51 51 yes oh you're almost dead you're not gonna make it that's my concern dave You're 10 years older than me. And I learned about you in my 30s.

You're just getting started. That was an underhand pitch, kiddo. You're going to be amazing. Dave's about to hit his midlife crisis. So what do you think, Joe? What do you think the percentages will follow her? You know the business, too. Yeah, I would would say 50 of the clients are going to jump over because they don't want to deal with whoever the new guy is at this i'd say it's more than that i mean wouldn't you

jump i mean oh yeah you don't go to a company our smart investor pros don't retain i just did this with my barber i like my barber i don't care about where he works i just want to follow my barber because i trust a problem i have george so you don't have to deal he works. I just want to follow my barber because I trust him. Not a problem I have, George. So you don't have to deal with that, Dave. That's the one thing I have on you is hair. That's right. Definitely. Much better hair. But it's the same concept.

Yeah, it is. I trust my barber. We have a relationship. I tried the other guys. It didn't work out with them. So I moved with him to his new business. That is a good example. I mean, and, you know, your doctor.

My doctor just changed. He changed his hospital. And I didn't go back to the goobs that he used to work with. I went with the guy, the new goobs that he moved to. You know what I mean? And it's a freaking doctor. I don't need to start over with this guy. Yeah.

I don't need to. It's too much trouble. Too much medical history. Oh, yeah, because I have no't need to it's too much trouble too much medical history oh yeah because i don't have no i have no medical history that's the point i'm sure you go to the doctor like once every eight years at least you don't strike me like the type that has a sniffle and decides to go see the doctor i he the only reason he knows me is we're just personal friends outside of work so unless dave's on a stretcher the point though is not that the point is she's gonna do fabulous

because you can just tell talking to her she i mean i trust her just talking to her for a minute yeah she the way she carries herself her vernacular her voice tone her cadence she's she's you've since uh a solid person of integrity that is not in a hurry and not greedy. She's actually worried about them, not just her. That's a unicorn in the financial planning world. They're out there. I mean, our smart investor pros fall in that category. They're those kinds of people. But the rest of them, I mean, are not everybody that's not a smart investor pro,

but, I mean, there's too many people in the business that are all about super nerding or they just get caught up in the nuances of stuff. But she's going to do great. I think you're wrong, George. I think it's 75%. So, Laura, you call us back in six months and tell us who won the bet. George has got his money on 50. I got my money on 75.

I play conservative. I know. I'm not like Rachel at the slots. I'm a big Laura fan. That's fair. I think this is where at the slots. But I'm a big Laura fan. That's fair. So, you know, I think this is where it's going. All right. This is good stuff.

Sylvana is with us in New York City. Is it Sylvana? Is that correct? It's Sylvana. Sylvana. I apologize. How can I help? Hi.

So, I am a current college student, my second year. I just transferred last year from a community college, so this is my first year at a four-year college. I still have like about two and a half more years to go to finish my degree in computer engineering. Problem arises that I don't qualify for any financial aid whatsoever under my parents' divorce. So under my mom, nothing because she makes way too much money. But scholarships and work, you qualify for jobs and you qualify for scholarships. Scholarships? Some. I haven't received any. Well, you haven you qualify for scholarships. Scholarships?

Some. I haven't received any. Well, you haven't asked for any. There's not a scholarship fairy. How many have you applied for? I've lost count. I haven't even kept track. I've applied for everything.

Okay. You should have applied for 200 by now, not 20. And 20 is the number that you've actually applied for. You have to go for a whole bunch of them. We have Christina Ellis Ramsey personality. She got a half a million dollars in scholarships. A half a million dollars. You don't need that much.

So scholarships. Oh, and by the way, kiddo, lots of people out there begging for people to work right now. You can make serious money in New York City right now because nobody's working. Go to work and work your butt off and you can get through school. I promise you. Keep your expenses down and do it. George Campbell Ramsey personality is my co-host today in the lobby of Ramsey Solutions on the debt-free stage. Ronald and Denise are with us. Hey guys, how are you? We're great. Great. Honored to have you. Where do you guys live?

Richmond, Virginia. Fun. Welcome to Nashville. And all the way here to do a debt-free scream? All the way here to do a debt-free scream on our 20th anniversary. No better place to be. That's awesome. I love it. So how much did you pay off? We paid off about $160,000 in about six years. Good for you.

And your range of income during that time? Our range started at about $110,000, and after we really got into doing the program and we picked up part-time jobs, it's now $250,000 depending on the income from the part-time jobs. You're killing it. Way to go. That's a lot of money. What do you all do for a living? I'm a school psychologist.

And I'm recently retired. That's a good thing. Congratulations. I like this. Good plan. So what kind of debt was the $160,000? It was credit cards and our house. You paid off your house!

Woo! Look at it, weird people. Just in time for retirement. No debt anywhere. Boom! I love it. I love it. So what started this journey six years ago?

You know, you have always said that age doesn't matter. You said race doesn't matter. And you said income doesn't matter. And we are here as witnesses that that is absolutely true. Wow. We floundered and squandered so much money over the years just living and doing what we thought was okay. But we went to an FPU class at our church six years ago and it was the nine-week class and when we heard it it resonated with our spirits that man this is

it this is the right way to do it wasn't a get rich quick scheme but it was the right way commonsensical but what happened was we weren't gazelle intense we did it we weren't going to give up all of our credit cards because you got to have a credit card and we had come from previous marriages both of us okay and so we were older and uh more independent when we got married so this stuff about joining incomes no we weren't having not after the last time not after the last time yeah and so we had a my account his account and then we had a joint account where we would pay the bills oh we thought we were doing it we had a percentage based on what you made and i made and that's the bit but you know what we were just slowly not really getting

anywhere we were treading water and then two years ago we had our first grandchild that made us re-evaluate our life and our legacy i like these people yeah already a big fan big denise fan you're amazing we were like dave ramsey told you what to do he told you three years ago what to do but we just kind of did it without the gazelle intensity and when that baby was born game on game on tore up all the credit cards. All right. The independence was gone. Yeah. We got together, got our money together,

felt like we had gotten a raise. He had a little problem with that. Mm-hmm. Being a man. Mm-hmm. And I'm going to tell you a small version of it. Being an older adult, I was 65 years old,

got my old school ways. Took me a while to give my check to someone that I wasn't used to giving it to. I was usually going from my hand to my pocket to the stores. I told myself, Ronald, you have to leave your ego and your pride at the front door. And let your wife take over this. You have to leave your ego and your pride at the front door. Wow. And let your wife take over this. Dave, you just don't know how much flack I got from my male friends.

They said, I can't believe you're giving your wife your check. But I said, this was a way to keep not only me and my wife together, but also our legacy. Wow. Amen. That's inspiring. So now we're working together. Now we're working together. Now we have one account.

And game on and the house is paid off. Game on. The house is paid off. That's when we picked up the part-time jobs that ended up being really lucrative. And we're here to talk to the older people. We see a lot of younger people here. But we're here to say you can do it. Age doesn't matter.

We are 65 and 67. The only thing we could kick ourselves is because we didn't start sooner. But you know, when you know better, you do better. There you go. And we need to thank you publicly. We love you. For putting us on this path. You're an incredible story.

I love you guys. You're amazing. Powerful, man. That's powerful. Preach it. I like it. I have 15 quotes I want to write down right now quotes i want to write down right yeah there's a whole bunch of one-liners there it's a whole tweetable event this is great like like we do anything on twitter anymore yeah way to go you guys you're saying it's never too late okay what's what's the grandbaby's name rain Rain. R-A-Y-N-E. Rain Ivy. Little girl? Little girl. Uh-oh.

Uh-oh. And now it begins. So the why is a little different. But that's a big old why right there. That little baby is a big old why. You guys, that got you going. And now you're 100% free. So, Ronald, your old buddies have made fun of you there. Your house is paid for.

Yes, sir. Who's laughing now? Yeah. Well, I'm talking about they will be laughing after I send this link to all my friends. Yes. How you like me now. Yeah, how you like me now. Dave, I want to also say that I read your baby step book,

and I've been passing it on to a lot of young people to let them know that you can do the same thing I did. Instead of waiting like I did until I got in my 60s, y'all can do it while you're in your 30s. I passed the book on. So this retirement, I think it takes more courage and more motivation to do it the way you guys did it, even though you and I agree it's obviously better at 22 than at 62 because the math is better. Yes, sir.

But it's that old dog new tricks thing, man. People my age, your age, we don't like change. It's harder for us, and change requires more courage. That's right. Transformation requires more courage. And so I think you're heroes. I'm very proud of you. You're're amazing people thank you it's amazing i just they're they're fun i know you're the hero you're a rock star in our world i tell you you need to get a bigger world you're bono man oh my gosh well we got a copy of baby steps millionaires for you that's the next

chapter in your story. You will be millionaires. Tell people what the secret to getting out of debt is. It's the mindset. Once you change your mind, it doesn't matter the income. It doesn't matter any of those other things. We happen to have two incomes, but if we didn't, if it was just me, I could do the same thing. It's the mindset and working together when you do have two incomes yeah absolutely big deal that's a big deal okay we

we established that some of your buddies were picking at you who was your cheerleaders my wife okay yeah we didn't tell a lot of people we tell a lot of people no my wife was the main one they kept telling you know they kept they kept telling me you're doing the right thing you're doing the right thing you're doing the right thing it turns out both of you were right and satellite radio listening to you every day that was that was my motivation wow we're honored you're telling a lot of people now aren't you you guys are fun yeah you just lit up a whole generation. I love it. That's fun. Very well done. Alright, Ronald and Denise from Richmond, Virginia.

$160,000 paid off. House and everything! Looking at where, people! Did it in six years, making $110,000 to $250,000. Heading into retirement debt-free. Count it down. Let's hear a debt-free scream. Three, two, one. hear a debt-free scream three two one

i don't care who you are that's how it works right there baby that's why we do this right here. Yeah! For Ronald and Denise. Oh, that's fun. They're heroes, man. That's fun. What a neat couple. I gotta go back and watch that

and write down all the quotables. Oh, man. I mean... That's a book right there. She's zipping them off there. Wow. No question.

No excuses. Not too late. Not too late. There's no... You know, you can do it. Listen, if you thought you couldn't do it, I think she just told you you know you can do it listen if you thought you if you thought you couldn't do it i think she just told you you could i think they just told you you just got told you just got told this is the ramsey show We'll be right back. 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 um i should let it be collected and maybe negotiate and kind of get a deal from uh the collectors rather than just try and pay it all with the school well um you know i'd call the school and offer them a deal just don't it sounds like it sounds like your real story like 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 have 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? Right now it's $6,000. Okay. How much money do you have? Right now I have $6,000. Yeah.

Call them and settle it. Deal with it now. Be done with it. Don't screw with some collector. Awesome. Get a hold of somebody in leadership and administration at the school. How big a school? It's a pretty big school.

I don't know the population, but 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 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 go, 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 going to do just that, I think, yeah. Yeah, I think it'll work. I mean, it might not. You might just have to write a $6,000 check, but either way, you're done, right? Right. Yeah.

I'm going to go ahead and get out of Dodge and put this in your rearview mirror and 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. Yeah. 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, 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 which is awesome. Way to go. On the wedding, of course.

Way to go. Thank you. So my question for you, just kind of thinking ahead, 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. 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. I love this plan. You guys are crushing it. Yeah, that's very, very wise. That's very smart. Yeah. 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 other best investment options

are for being a self-employed people? 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 you've got 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 the money that they put in okay if they put nothing in you 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 set for you probably a a simple ira which is a 401k for small businesses uh for her 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 20 000 what's the max thousand five hundred on for her okay 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 all that through. SmartVestor 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 and try to do them all as Roths as well. But 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't 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 day, Brand? 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.