"Do NOT Buy A Home!" Money Expert Reveals What To Do INSTEAD!

Summary

Podcast Summary: "Do NOT Buy A Home!" Money Expert Reveals What To Do INSTEAD!

Episode: "Do NOT Buy A Home!"
Release Date: September 23, 2024
Podcast: The Iced Coffee Hour
Hosts: Graham Stephan, Jack Selby
Guest: Dave Ramsey

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Introduction and Guest Appearance

The episode features a special guest appearance by financial guru Dave Ramsey, marking his third appearance on "The Iced Coffee Hour." Graham Stephan and Jack Selby engage in a candid discussion with Ramsey, delving into controversial financial topics, particularly focusing on the conventional wisdom of homeownership as a primary investment.

Key Topics Discussed:

1. Homeownership: Asset vs. Liability

   • Overview: Graham Stephan introduces the central theme, questioning whether buying a home is truly the best investment.

   • Dave Ramsey’s Perspective:

     • Quote: “House, is it the best investment ever? No, I don't look at it as that.” ([04:44])
     • Ramsey emphasizes distinguishing between a home as an asset and the mortgage as a liability. He advocates for reasonable mortgages that can be paid off swiftly, transforming the home into a valuable asset.
     • Quote: “If you do it the right way, the house can become a beautiful asset, even an investment.” ([04:57])

   • Graham Stephan’s Counterpoint:

     • Quote: “It’s hard for me today to look at a house and think that’s a good purchase compared to what it was eight years ago.” ([04:54])
     • Stephan raises concerns about recent real estate appreciation rates and the sustainability of continuing significant home price increases.

2. Investment Strategies Beyond Real Estate

   • Cash-Based Investment Properties:

     • Ramsey advocates for purchasing investment properties with cash to avoid mortgage-related risks.
     • Quote: “I believe you get your primary home paid for now... buy something reasonable in cash.” ([06:25])

   • Conventional Investing:

     • Discussion shifts to the efficacy of investing in mutual and index funds versus real estate.
     • Ramsey suggests that the stock market may offer better returns in the long term compared to real estate appreciation.

3. Credit Cards and Debt Management

   • Dave Ramsey’s Stance on Credit Cards:

     • Quote: “The entire industry is scum. They are meant to screw people over.” ([85:17])
     • Ramsey is highly critical of credit card companies, highlighting their high-interest rates and potential for fostering debt.

   • Smart vs. Bad Debt:

     • Quote: “Use smart debt.” ([83:11])
     • While advocating for avoiding debt, Ramsey acknowledges scenarios where credit can be used responsibly, such as secured credit cards with strict budgeting.

4. Inflation and Housing Prices

   • Impact of Inflation:

     • Quote: “When you account for inflation, a lot of homes simply just stay the same value.” ([20:10])
     • The hosts discuss how inflation affects perceived home value increases, suggesting that without inflation, many homes haven’t genuinely appreciated.

   • Ramsey’s Take:

     • Quote: “I don’t buy a house as a hedge against inflation.” ([21:05])
     • Ramsey views homeownership primarily as a necessity for shelter rather than an investment hedge.

5. Income Growth and Budgeting

   • Controlling Income and Expenses:

     • Ramsey emphasizes the importance of increasing income and managing expenses to achieve financial stability.
     • Quote: “What we can control is how much debt we have, what our income is, and what our daily spending habits are.” ([21:51])

   • Budgeting Tools:

     • Recommendations include using budgeting apps like EveryDollar to track income and expenses meticulously.

6. Social Security and Retirement Planning

   • Critique of Social Security:

     • Quote: “Social Security is a scam.” ([45:39])
     • Ramsey and the hosts criticize Social Security, labeling it a Ponzi scheme and advocating for personal retirement savings instead.

   • Alternative Retirement Strategies:

     • Emphasis on maximizing retirement accounts like Roth IRAs to secure financial independence.

7. Government Spending and National Debt

   • Examining Government Efficiency:

     • Quote: “There needs to be a third party auditor to audit the government.” ([38:30])
     • Discussion on the necessity of auditing government expenditures to curb wasteful spending and reduce the national deficit.

   • Policy Impact on Personal Finances:

     • Ramsey downplays the direct impact of presidential elections on individual finances, focusing instead on personal financial habits.

8. Minimum Wage and Economic Implications

   • Debate on Minimum Wage:

     • Quote: “I’d rather see people... increase their skillset to go get a $20 an hour job instead of $15.” ([73:37])
     • Ramsey argues against minimum wage increases, suggesting that they lead to inflation and place undue burdens on businesses.

   • Impact on Employment:

     • Discussion on how increased minimum wages can lead to reduced hours or job cuts as businesses adjust to higher labor costs.

9. Investment Strategies to Achieve Wealth

   • Path to $1 Million Net Worth:

     • Ramsey outlines a strategy combining aggressive saving (15% of income) and paying off mortgage debt to reach a net worth of $1 million within a decade.
     • Quote: “Investing 15% of your income and getting a house and paying it off. Those two things combined are all you need to have a net worth of a million dollars.” ([50:04])

   • Graham Stephan’s Approach:

     • Emphasizes online sales and scalable businesses as effective methods for wealth accumulation.

10. Behavioral Finance and Personal Growth

    • Combating Cynicism and Embracing Optimism:

      • Quote: “Make it a habit to put down your cynicism every day you wake up.” ([92:51])
      • Ramsey encourages cultivating a positive mindset to enhance personal well-being and financial success.

    • Balancing Productivity and Relaxation:

      • Hosts and Ramsey discuss the challenges of being constantly productive and the importance of being present.

Notable Quotes with Timestamps:

• Dave Ramsey: “House, is it the best investment ever? No, I don't look at it as that.” ([04:44])
• Graham Stephan: “I feel like a lot of people look at real estate performance over the last 14 years...” ([04:54])
• Dave Ramsey: “If you do it the right way, the house can become a beautiful asset, even an investment.” ([04:57])
• Dave Ramsey: “I believe you get your primary home paid for now. ... buy something reasonable in cash.” ([06:25])
• Dave Ramsey: “The entire industry is scum. They are meant to screw people over.” ([85:17])
• Graham Stephan: “It’s just a cookie. It adds up and sets you back.” ([35:06])
• Dave Ramsey: “The reason America's broke is... because they're not living on less than they make.” ([37:54])
• Dave Ramsey: “I just think the mentality of don't buy $5 coffee is what's keeping people broke.” ([34:48])
• Dave Ramsey: “What I think is the budget carries through till the end of my days. I'll be doing a budget...” ([21:51])
• Dave Ramsey: “I don’t buy a house as a hedge against inflation.” ([21:05])
• Dave Ramsey: “Social Security is a scam.” ([45:39])
• Dave Ramsey: “I believe income is one of the only things in our control.” ([21:51])

Concluding Thoughts

The episode challenges the traditional perspective that homeownership is the ultimate path to financial security. Through an in-depth dialogue, Graham, Jack, and Dave Ramsey explore alternative investment strategies, the pitfalls of excessive debt, and the importance of personal financial discipline. Ramsey's "tough love" approach underscores the necessity of living below one’s means, aggressive debt repayment, and strategic investing to build lasting wealth. The conversation also touches on broader economic policies, emphasizing personal responsibility over governmental influence in achieving financial well-being.

For listeners seeking to reevaluate their financial strategies, this episode provides insightful perspectives on prioritizing investments, managing debt, and fostering a mindset geared towards long-term financial success.

Transcript

[Graham Stephan]

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[Dave Ramsey]

The reason America's broke is not because of inflation. It's not because of the economy. It's because they're not living on less than they make. A recent survey by Credit Karma found 40% of millennials have spent money they didn't have and gone into debt to.

[Graham Stephan]

Keep up with their peers.

[Dave Ramsey]

Yolo. I deserve a sweet treat. Life's hard. Mmm. Mental health day. And they just go spending like crazy. And roughly one in three doubt they'll.

[Graham Stephan]

Be able to keep up this lifestyle without incurring debt.

[Dave Ramsey]

Everyone wants to point at inflation and the White House and the economy and all these things we don't have full control over. What we can control is how much debt we have, what our income is, and what our daily spending habits are. You have to have the I've had it moment. That's what Dave calls it. When you drew a line in the sand and you said, I know my life is worth more than living in debt for another twenty years, think about what a five dollar sacrifice could do for your future. Look at that exponentially across all of your expenses. Most people are unwilling to sacrifice for two years, and yet they're willing to live in mediocrity for the next 20.

[George Camel]

George, thanks so much for coming on at the iced coffee Hour. We really appreciate it.

[Dave Ramsey]

It's an honor. Is this a three?

[Graham Stephan]

Pete, this is technically so special that.

[George Camel]

We had to have you on again because everybody loved the first two episodes, and we're gonna dive even deeper. The idea is we're gonna go over some controversial truths about money.

[Dave Ramsey]

Okay.

[Graham Stephan]

And some big money mistakes that people need to avoid.

[Dave Ramsey]

I know a lot about both of those things. And you guys can feel free to chime in with your own money mistakes. You know, let's be vulnerable today.

[George Camel]

That's the idea. We all have different ideas around money, and we're gonna challenge each other and try to find the truth.

[Dave Ramsey]

A debate this could be. I was never in debates.

[Graham Stephan]

This might get a little contentious, but it's your show.

[Dave Ramsey]

You got two against one. You work out. I feel like it's not a fair fight to begin with. All right, well, let's have some fun.

[Graham Stephan]

Cool. Oh, also, huge. Thank you To Ramsey Solutions for our coffee and also for hosting us.

[Dave Ramsey]

We're always happy to host you guys. You've become good friends of ours and we've always enjoy making content with you guys. And I hope it helps people. That's the ultimate goal. Can we help someone become debt free, build wealth, learn something they didn't know, and avoid a money trap?

[Graham Stephan]

I feel like a lot of people look at this as like the most unlikely duo. You know, for someone who like is big into credit cards and keeping 30 year mortgages versus someone who's very like anti debt 15 year mortgages, paying it off as soon as possible.

[Dave Ramsey]

Yeah, we can still be friends. That's what I've learned. If you are kind and respectful and you're not trying to just like come at me with a knife, then I'm like, hey, we can talk about it as intellectual friends and then still go hang out and have a good time. That's my goal, is to become a bridge to the finance community at large.

[Graham Stephan]

Cool.

[George Camel]

Well, let's talk about. We scoured the Internet for a bunch of different takes on money and we come up with a list and we'd love to know your opinion on it.

[Dave Ramsey]

Good research. How long does it take to do? Because I've watched a lot of Iqiyi coffee hour stuff. This is not an easy job. You make it look easy.

[George Camel]

Yeah, it depends. So if we're shooting with you, I mean, we know you fairly well by now, so this wouldn't take as much time as if we were researching for someone new like Jordan Peterson. That one. I mean, I probably spent months preparing for that.

[Dave Ramsey]

How do you even begin to crack that egg?

[Graham Stephan]

Let's start off with the first one. We looked up the controversial truths about money and this came up that we thought would be interesting. It says, a house may not be the best investment in the world. All the extra debt creates stress which steals energy from other areas of life. Think carefully before getting a huge mortgage. Maybe you could live smaller and still be happier or rent for longer until your investments grow big enough to provide financial security.

[Dave Ramsey]

House, is it the best investment ever? No, I don't look at it as that. Now, I think we do need to separate a house as an asset versus the mortgage, which is the liability. I think it's important to separate those two because if you're following the Ramsey plan the way I teach, I'm going to say, well, yeah, I don't want you to have too big of a mortgage and hang on to it for the rest of your life. Let's get a house, let's make the mortgage reasonable and let's knock it out when we can. And if you do it that way, the house can become a beautiful asset, even an investment. I mean, my home and the homes I've had have been some of the best investments as far as ROI. You know, it's beaten my 401k because of the time I bought the area. I bought all of those pieces. And, you know, as a guy who's owned a lot of real estate, real estate can be a great investment when you do it the right way.

[Graham Stephan]

The issue, though, that I see is that a lot of people look at real estate performance over the last really 20 years, but more specifically the last 14 years.

[Dave Ramsey]

Well, since 08, probably.

[Graham Stephan]

Right.

[Dave Ramsey]

Coming out of that.

[Graham Stephan]

Right. And they see how much prices have gone up. And I think a lot of people have this idea in their mind that house prices are going to continue going up. Maybe not at the same trajectory. Even if it went up half of what it did from 2010 through now, they'd be doing quite well. I don't know if houses are going to see the same appreciation over the next 10 years. I could be totally wrong, but it's hard for me today to look at a house and think that that's a good purchase compared to what it was eight years ago.

[Dave Ramsey]

Oh, absolutely. I think the growth that we saw, even in the homes that I had, not homes plural, but the homes that I've had, singular in the times I've had them, I'm not going to see that kind of return in the stock market. But like you said, in the future we might see homes appreciate at 5% instead of 20 or 30% and 5% versus what the market might do, which could be 15, 20% on a good year, 25% even, that's going to beat the real estate. And so I think you should get into real estate. If you love real estate and you want to purchase an investment property with cash, that's probably the most controversial take of all, then go for it. If you want to try out being a landlord and you want to make that extra income from the rent, just know that it's not going to be passive. It's going to take work. And you've shared on your channel some of the nightmarish experiences that a landlord and a real estate investor can have.

[Graham Stephan]

Yeah.

[George Camel]

So you think you should only ever buy an investment property if it is cash?

[Dave Ramsey]

Yes. That is. That is the wisest way to go about it. I think people get too starry eyed when it comes to investment real estate. And they go, well I'll just put 3% down, I'll do the brrrr strategy and it'll all work out for me. And what happens in a 60 second tick tock from some dude telling you, you know, some grand, you know, Grant Cardone for example, saying dude, just, you know, if you don't have 30 houses by the time you're 35, you suck. If you don't make half a million dollars, your life is terrible. I'm like, all right, let's tone it down, right? That it doesn't have to be that way. And so I believe you get your primary home paid for now. You have a lot of cash flow and margin because you hopefully have increased your income with your career over time and you steadily save up and pay cash for investment property when you can, whether that's a fun vacation home or an investment.

[Graham Stephan]

I think a lot of people would look at that for paying cash for an investment property and just think, let's just say it's 400 grand. Saving up $400,000 in cash is going to take a long time. And if you do that in the stock market, let's just say you're throwing in, you know, 1,000 bucks a month into the stock market now 20 years have gone by and you have enough to buy an investment property. If you sell the stocks now, you're left with a tax bill that takes you back down. You have to almost start over again. Buying an investment property with cash would be extremely difficult at that point. It's like unless you have a huge income, it wouldn't feasibly be possible for.

[Dave Ramsey]

Well, the first one's going to be the hardest. And remember, it doesn't have to be a $400,000 home. Your first investment property, you know, for you, how much was your first one? The first one you ever bought?

[Graham Stephan]

59,000.

[George Camel]

It was a while, but during like the bottom of the market.

[Graham Stephan]

Yeah, that was like 2011 of foreclosure. Sure. No, that house is probably worth 380.

[Dave Ramsey]

But for example, you're not going to buy the most expensive home for your first property. You know, you're going to look for, maybe it's a condo, maybe it's a townhome. It doesn't have to be an expensive single family home. In the nicest part of all investments though, maybe condos are awful.

[Graham Stephan]

I mean very. I've, I've never seen a good investment for a condo. Every deal that I've ever looked at where someone has come to me is like, hey, what do you think of this as a deal? I'm like, what can I rent for? What's the hoa? What are the property taxes? What are other units selling for? They're all money losers. Every single one is not a lot.

[Dave Ramsey]

Of ROI for you.

[Graham Stephan]

No. There's only so much that you could upgrade in a condo. You can't add square footage. You don't own the land. You're at the whims of the hoa. There's so many things that could go wrong on that. The other issue with a lot of these condos is that getting insurance on them. Depending on the location. Some of them just don't have the proper insurances if something were to happen. Like, LA is a great example of this. A lot of condos there don't have earthquake insurance.

[Dave Ramsey]

So if you're gonna insure that, too much risk, Right?

[Graham Stephan]

Too much risk. And so they just go without it. But imagine you have like 800 grand sunk in a condo without earthquake insurance. Something hits damaged, what do you do? You're white.

[Dave Ramsey]

It's on you.

[Graham Stephan]

You're white.

[Dave Ramsey]

No. That is scary. Depending on the area you're in.

[Graham Stephan]

So you're kind of limited. I personally think I would never invest anything that's not either multifamily or a house.

[Dave Ramsey]

Well, a lot of people just think, like, what. What do you think about the strategy of I'm going to buy the duplex and live on the other side?

[Graham Stephan]

Love it.

[Dave Ramsey]

Have you done it?

[Graham Stephan]

Yes.

[Dave Ramsey]

What's it like living next to your tenant?

[Graham Stephan]

Fantastic.

[Dave Ramsey]

But do they ever knock on the door and go, hey, bro, you got a problem? No, never?

[Graham Stephan]

No. I had the nicest people next to me. They were so cool, so respected.

[Dave Ramsey]

You screened them really well. I'm always curious.

[Graham Stephan]

So I inherited them, so they were already there, and then I moved in. So they had been there for quite some time.

[Dave Ramsey]

So you won the jackpot in that regard.

[Graham Stephan]

I loved them. They were so nice. They were so quiet, so respectful, Took care of. Yeah. And it was an elderly mom and her son that were living there. I loved them. They were so nice.

[Dave Ramsey]

So it worked out. Would you do it, Jack?

[George Camel]

Absolutely, yeah. I mean, at this point, I would probably. I would probably not do that since I already live in a house with a bunch of guys. So I just move them in.

[Dave Ramsey]

Been there, done that.

[George Camel]

So it works out great for me. But I definitely, like, a few years back, absolutely would have loved to do that.

[Dave Ramsey]

All right. Yeah. I mean, the thing is, you're always going to introduce risk when you take on a mortgage. And we believe that more risk, less peace, less joy. And I'm all about what, what are your options? And once you pay off the house, I don't want to pick up another payment. I'm going to save up and buy something reasonable. And so that's my plan, if I ever do buy investment property, is to buy something reasonable in cash. Which means it's probably not going to be within a five mile radius of this area because this is the 11th wealthiest county in the nation. So it wouldn't be wise for me to just go spend 800 grand for my first investment property. It's probably going to be further out.

[Graham Stephan]

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[George Camel]

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[Graham Stephan]

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[George Camel]

You always talk about mitigating risk, but with risk comes reward. So what would you say is the riskiest thing that you would actually do.

[Dave Ramsey]

Oh, well, some people look at the stock market as risk. You know, some people, you could lose money. A lot of people are scared to invest because they go, I'm not putting my money in that vending machine. It's going to eat it. Because I've seen the stock market go down because I saw the headline. And that to me, the stock market is probably the best, riskiest place to put your money, in a sense. And if you do it the right way, which is not investing in single stocks, putting your money in mutual funds and index funds, giant pools of stocks, then you're going to be more diversified and less chance of getting, you know, just eaten up on that ride. And so stay the course, invest for the long term. I don't invest without a five plus year horizon.

[Graham Stephan]

What about bitcoin?

[Dave Ramsey]

You know my feelings on bitcoin, I wouldn't say they've changed. I'm not a bitcoin hater. I personally don't have any cryptocurrency. I'm not mad if people do. I just hope that they're also investing at least 15% into retirement accounts, into tried and true methods, and then using their fun money to invest in crypto. And if you're going to invest in crypto, Bitcoin is the current leader winner with the best track record.

[Graham Stephan]

Would you invest 1% of your net worth in bitcoin?

[Dave Ramsey]

Ooh, would I? I don't know at what point I would be comfortable doing that versus just putting it into the market in even a brokerage account, into an index fund. I'm much more comfortable just throwing money into an index fund versus well, what if that money could 20x but you.

[Graham Stephan]

Could put it in a Bitcoin ETF.

[Dave Ramsey]

What would that ETF do for me versus just Bitcoin solo?

[Graham Stephan]

The ETF would just be easier to buy and you'd be able to do it from within a regular.

[Dave Ramsey]

But it's still one coin. Yeah, it's still like a single stock in that regard.

[George Camel]

Yes.

[Dave Ramsey]

If there was a. I'll say this. If there was an ETF or index fund that had a collection of the best cryptocurrencies, I would say, all right, I'll put some fun money in there. That would be my caveat.

[Graham Stephan]

I have a feeling at some point that's going to happen.

[Dave Ramsey]

Well, the whole idea is that it's unregulated, but now as it gets more regulated, it kind of takes the steam out of it in a sense. Now I get there's a Finite amount of bitcoin and all of that. And it can't be devalued with inflation and printing money. So that part is actually the most interesting. Bart's man. I talked to Tom Bilyeu about this.

[Graham Stephan]

Yeah.

[Dave Ramsey]

But really what bothers me is the people that are into it. It's not the actual, the crypto, it's amoral. You know, it's like a brick. You can throw it through a window, you can build a school. The people that are into bitcoin, like once you have bitcoin in your ex profile, I'm like, oh, you're not okay. Like, there's mental health issues. Like, if I had mutual funds in my Twitter bio, you would say like, this guy, he needs, he needs to see someone. Or it's a weird thing.

[Graham Stephan]

Laser beam eyes on Twitter. Have you seen that?

[Dave Ramsey]

That's also strange to me.

[Graham Stephan]

And I could see you with laser beam eyes.

[Dave Ramsey]

People have probably done it for a YouTube video, like trying to like, you.

[Graham Stephan]

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[Dave Ramsey]

Me Down, Make Me look like what's that? Evil Joe Biden, Dark Joe or whatever. So I could see that happening, but it's the people obsessed with it. It's like an mlm. That's why I've always said cryptocurrency is just Mary Kay for young men. Because the people who are into it are trying to get other people into it. They're obsessive about it and they make money when they get you into it. Think about that. If I want you in on Doge, I'm going to tell everyone, hey, you got to get in on Doge, man. It's a great price right now. It's going to the moon. Elon said he's going to go on SNL and then it's going to crash. And so I just don't like the culture around it versus the actual technology itself of the blockchain and all that.

[Graham Stephan]

I do see that changing for bitcoin, at least. I do see that culture transitioning into something a little bit more corporate. But like you said, it takes a bit of the steam out of it.

[Dave Ramsey]

Yeah. If it was offered, let's say, in our 401k, if there was a bitcoin mutual fund, I might just throw a little bit in there for fun and go, all right, above and beyond my 15%, I'm going to throw some into this mutual fund and see what happens. But I just think there's too much get rich quick greed around it and nobody can convince me otherwise. Because why are you investing in bitcoin? It's not because of the technology. No. It's because you're hoping to get a thousand X versus a 20% return.

[Graham Stephan]

I see it as something where people don't want to put their money in the dollar, that they see that as a global currency or a global store of value that everyone attributes some form of wealth to. And so they see that as something that there's a finite amount of it. Everyone from around the world sees and agrees that this holds some level of value. I'm going to put my money in that.

[Dave Ramsey]

Sure. I saw the RFK thing. Did you see this? RFK junior. He was at the bitcoin conference here in Nashville and he said he wants the US to have 20% or almost 20% of all market share of bitcoin and that the government needs to buy. You know, it was. I did the math on this. It was like the government would need to spend like $70 million a day. With whose money? Taxpayer money. The government doesn't create.

[Graham Stephan]

Worked for El Salvador, though.

[Dave Ramsey]

Did it? Yeah. How are they doing?

[Graham Stephan]

Really well.

[Dave Ramsey]

So they use taxpayer money to buy bitcoin?

[George Camel]

Yeah.

[Graham Stephan]

Yep.

[Dave Ramsey]

And then what happened?

[Graham Stephan]

It dropped. And he bought the dip.

[George Camel]

Yeah, he bought the tip.

[Dave Ramsey]

So he timed the market perfectly.

[Graham Stephan]

You didn't know. He's just. Technically, he's just.

[George Camel]

Yeah, he was dollar cost averaging.

[Dave Ramsey]

Okay.

[Graham Stephan]

But he started buying at 30, wrote it down, doubled down at like 16, 18 and eroded all the way back.

[George Camel]

Their currency, though, was completely obliterated. So it wasn't like there was anything.

[Graham Stephan]

This was.

[Dave Ramsey]

It was their. It was their Hail Mary.

[George Camel]

Yeah.

[Dave Ramsey]

I'm just not. I Think there's too much fear mongering happening with the dollar devaluation and it's all going to come crashing down. All these countries are going to come against us and your dollar is going to be worth nothing. I get that inflation is real, but I think there's way too much fear mongering on the other side, saying, well, I'm going to have all my money in crypto, which, by the way, you still have to turn back into cash to actually use it. I mean, it's similar to gold in that regard where people are going, I'm going to buy up all the gold and then what? You're going to have to go sell it to a pawn shop for less than you paid for it just to turn it around?

[Graham Stephan]

Well, I think eventually we could get to a point where for larger purchases, you could just trade bitcoin. Like, let's say a house. You say, hey, that house is ten bitcoin, five bitcoin or five and a half. Send me that. And that is payment or a car, one bitcoin.

[Dave Ramsey]

So I think that day is farther away than the dollar being demolished. That's just how I'm like, all right, I'm going to take my bet. Yeah, the dollar's fine and I'm going to invest to beat that inflation rate. That's the key. When people just have their money in a checking account or a measly Savings account making 0.01%. Yeah, that's terrible. I wouldn't do that. I'm going to invest in. I'm going to my house isn't appreciating my investment accounts, my 401ks, IRAs, a taxable brokerage, all of that will hopefully appreciate in the long term more than the dollar is being devalued. Yeah, that's the only hope we have.

[Graham Stephan]

Now, speaking of inflation, here's our next controversial truth about money. House prices aren't what they seem. If you remove all the stimulus and money printing, then most people's homes didn't increase in value at all.

[Dave Ramsey]

What? Can you explain that to me? I feel like I'm on a spelling bee. I'm like, can you use the word in a sentence?

[Graham Stephan]

Yes. Okay. When you look at housing prices over time, when you account for inflation, a lot of homes simply just stay the same value. It's just you're adding inflation on top of it. So if your home goes up in value, let's just say 3% a year. If inflation is 3% a year, you're just keeping par. Homes aren't really going up. Uh, when I looked into this, it was only certain major metros and certain locations that exceeded the value of inflation over the last hundred years. So what this is saying is that your home isn't really going up in value. What you're really doing is locking into something that's keeping pace with inflation.

[Dave Ramsey]

And that defined by me, the more.

[Graham Stephan]

Inflation there is, the more your home goes up in value.

[Dave Ramsey]

So if I buy at 500,000, I sell at a million. Well, by the time I sell at a million, my buying power is more like 500,000. Is that kind of the idea?

[Graham Stephan]

Basically from the original time, I just.

[Dave Ramsey]

Go tell that to a renter who is wanting to buy a home and tell them it's, it's the same value. No, it actually costs $300,000 more than it did five years ago. So the price is the price whether or not you want to adjust for inflation. And so I'm still going to put, I don't buy a house as a hedge against inflation. I want a roof above my head and I want to cover my biggest fixed expense. So paying off my mortgage removed my biggest fixed expense, which now I can use to invest or do whatever I want with. And that gives me the most options in the most piece. That's the way I look at it.

[George Camel]

The answer to financial problems is to make more money. Cutting expenses and being on a never ending budget has limited effects, and inflation and layoffs ensure this strategy stops working at some point.

[Dave Ramsey]

There is a point where you can cut your expenses all you want, but if you make $25,000 a year, you're right, you're not going to get very far financially. So you've got to make more. And I believe income is one of the only things in our control. Everyone wants to point at inflation and the White House and the economy and all of these things that we don't have full control over. What we can control is how much debt we have, what our income is, and what our daily spending habits are. And that's where I think the budget carries through till the end of my days. I'll be doing a budget because it helps me know where I'm at financially, if I'm on track to get to where I want to go. And part of that is, am I managing my expenses wisely? Yes, let me cut down my expenses because I might find an extra thousand or two thousand in there just by getting wise about that. But I might still need more margin. And that's where making more will only compound that effect. If I can save a thousand and make a thousand, that's a $2,000 spread.

[Graham Stephan]

Up to what point do you have control over your income? Like what dollar amount?

[Dave Ramsey]

I mean, I think in America there's endless opportunity. I mean, now the new goal for every Gen Z and Alpha is become a YouTuber. And it's not because of just the spotlight. You can make really amazing money on YouTube. You guys are living proof of that. And so I think part of it is, what are you willing to do? What skill set do you bring to the marketplace, and what kind of setbacks are going to hold you back from building that kind of wealth? Because if you go get $150,000 degree that has no marketplace value, you're going to be a lot more frustrated, you're not going to be making a lot and you're going to have a lot of debt. But if you avoid the debt, start your adult life, no debt, making a decent salary, and figure out ways to. Maybe it's climbing a corporate ladder for you based on your role, or maybe you want to be an entrepreneur. And that's a lot of people are wanting to go that route. And we know with entrepreneurship it's difficult, but the ceiling is much higher. You know, Dave, what Dave Ramsey makes as an entrepreneur and CEO far will outweigh whatever I could ever make as an employee of a company. And so you also have to understand the different levels. If you're going to be an employee, unless you're a C suite executive, it's going to be hard to make seven figures. But if you're a CEO and you run a company really well and serve people well in the marketplace, you could make 3, 5, 7 million a year.

[Graham Stephan]

But what point do you think someone has control over their income to say, like, hey, if you're making 20, you should be able to make 50, or there's no reason you can't make 60 or 70.

[Dave Ramsey]

When you look at the Internet and how much you can get for free of just skills, I do think we're seeing less demand for. You have to have this college degree.

[Graham Stephan]

Yes.

[Dave Ramsey]

In most fields, I would say 90% of the fields out there, they're not saying you have to get a master's. What they're saying is, do you have the soft skills and the hard skills to do this job? And experience, which worries me when kids are getting their fourth master's degree with no experience and then wondering why no one will hire them. Well, they're overqualified with zero experience. Why would I want to hire you? You got too much on the line. I'd rather hire the guy who's hungry, with no degree or with a four year degree or whatever that I can grow into the role. And so I do think there is, there is a limit depending on where you are. Right. If you live in the sticks and you can't find remote work and there's only a Walmart and a Dollar General. Yeah, your income is going to be limited by that. But the beautiful thing is we're in America. You can move people forget that you can move locations. You guys have moved. You moved from California to Vegas, right? Was it partially for financial reasons?

[Graham Stephan]

Oh yeah.

[Dave Ramsey]

So technically you are bringing more home now than you were in California. Even making the same income. That's an option people have. They don't think about that when it comes to their income is you have to think about income taxes and what does it cost to live here, what does it cost to rent? So I think if you're willing to make the right sacrifices, you're willing to be a lifelong learner. Your career potential, your salary potential is exponential to a degree. If you're an employee, if you ever make a million dollars, I'm going to be high fiving you. That's incredible. But you also don't need to make a million to have a great life. We see people who are making 50, 60, 70 with a great life.

[George Camel]

I think that's a great take that's not talked about enough. But it's also really controversial. It could be. Why is that if you can't afford to live in a certain place, then you should probably just move. That's like the other side of the token where a lot of people think I need to live in la, I need to live in Manhattan, because why not? I grew up here, I should be able.

[Dave Ramsey]

That's what I know.

[George Camel]

Yeah, they feel entitled to be able to live in a specific place, but if you can't afford it, then you might just have to move out of the city and then commute to work. You know, ideally not, but I think that people need to be maybe a little bit more okay. Being uncomfortable.

[Dave Ramsey]

I talked to a guy yesterday on the Ramsey show and he lives in la. He's got a partner who's about to have their kid and their rent is 3200 bucks. They split it. So he's paying 1600. He wanted to start two businesses. He said the partner screwed him out of compensation. So now he's been driving for Uber. So he financed a Tesla which has a 700 $700 a month payment. He's paying $800 a month for charging. He's paying 350 bucks a month for insurance. And he has debt in every other area of his life. And I'm going, dude, you need to move. You can do Uber in Ankeny. You don't need to be in Los Angeles to drive for Uber. And so I was trying to just show him that there's more options out there and that if he wants to get out of debt. Yeah. Paying this much in rent is part of the problem and there is a solution there. Or you go get roommates. Like you've got how many roommates?

[George Camel]

Four others.

[Dave Ramsey]

And that limits your personal housing expenses.

[George Camel]

Yeah.

[Dave Ramsey]

Because they're all paying into the pot. And so there's nothing wrong with if you're single, have roommates. Even Jade Warshaw, one of the Ramsey personalities, her and her husband had a roommate to help them pay off debt. They had an extra room. They said, we're going to rent this out and it's going to help us pay off debt. So you've got to kind of swallow your pride and go, I'm not entitled to have my own one bedroom, you know, apartment in la. Just because I'm a grown adult doesn't work like that. Yeah.

[Graham Stephan]

Renting out a room I honestly think is one of the best things that you could do to make more money. I mean, when you think about it, even like $800 a month.

[Dave Ramsey]

Yeah.

[Graham Stephan]

Think of.

[Dave Ramsey]

Have you thought about it at your place? People would pay a premium to live with Grandpa.

[George Camel]

He has thought about this.

[Dave Ramsey]

I don't know how Macy would feel about it. Have you talked to her about the.

[Graham Stephan]

It depends on who it is. We have a few friends that we would love just to, you know, if it was give him a room.

[George Camel]

Oh, Graham would love for me to live with him. Just like old times.

[Graham Stephan]

I've tried.

[George Camel]

I was for a while and then he started trying to charge me in, not rent in like utilities. In utilities, $300 a month.

[Graham Stephan]

I just chip in the game.

[George Camel]

Right.

[Dave Ramsey]

So I was.

[George Camel]

So as soon as you start doing that, I started looking to buy a house because, you know, you got a.

[Graham Stephan]

I guess Jack calculated that buying a house was cheaper than paying $300 a month for utilities. Tell me how that's Jack.

[Dave Ramsey]

It was different math.

[George Camel]

It absolutely was. I am significantly better off right now financially because I bought a house and because I'm renting out the rooms and I'm living for free and I'm. And that's not even Counting, paying into my own equity in the mortgage payment.

[Dave Ramsey]

Wow.

[George Camel]

So.

[Dave Ramsey]

Well, you know, to that end, I think a lot of people that are living at home are stunting their growth. And I think if you're not charging your kids something to live there as an adult with a job, you're doing it right.

[Graham Stephan]

That's what I was telling you.

[Dave Ramsey]

There needs to be an exit strategy. You have to like want push them out of there.

[Graham Stephan]

Exactly.

[Dave Ramsey]

Because if you let them live for free, why the heck would I want to go rent for 1200 bucks?

[Graham Stephan]

Exactly.

[Dave Ramsey]

So you were just being a good parent, seedy characters over to very.

[George Camel]

He wouldn't let me bring people over, which was another reason why.

[Dave Ramsey]

I get it, it's my place. I don't strangers in and out of my house.

[George Camel]

I wouldn't complain about it. I think that's, that's his to be fair.

[Dave Ramsey]

Did you mature, you know, emotionally, physically, financially by moving out and getting your own place? Was there an independence you gained?

[George Camel]

Yeah, and I had lived, you know, in my own place before. Like I didn't just go straight from my parents to my pseudo parent over here. Like I had a couple of other, you know, living situations somewhere in between.

[Dave Ramsey]

Yeah. But I would say there's something about having your own place, having to take care of it, having to pay the bills.

[George Camel]

Yeah.

[Dave Ramsey]

Having to be in all the accounts and manage that, that sort of actually sends you into adulthood.

[George Camel]

Absolutely.

[Dave Ramsey]

So I encourage it now I get people go home, they want to pay off some debt aggressively for a year while living at home or they had a life situation happen, it's okay. But don't let the safety net become a hammock, which has happened a lot.

[Graham Stephan]

When is too late to live at home.

[Dave Ramsey]

You know, as far as age goes, I think once you are in your mid-20s and still living at home, there's a problem because by your mid-20s you should have graduated. You should, even if you did a second degree, another two year program or whatever, you should be by 25 or 26 gainfully employed and have some semblance of what you're doing in that stage of life. Even if it's not your forever career, if you are on salary, I just don't think you should be living at home with mom and dad. I get there's rare situations, there's cultural differences, there's ultra high cost of living areas, you live in Silicon Valley. But I still would say your life is going to be better, your quality of life is going to be better if you move out and get your own place. Even if you financially suffer a little bit.

[Graham Stephan]

What if you have debt? You're 27, you graduated with a master's, you got a PhD with debt, and you could live at home for three years. You're 30 years old, but you could wipe out all the debt.

[Dave Ramsey]

I don't think the stunted growth is worth the savings. I think that person at 27 to 30 probably not going to have a girlfriend, probably not going to get married. And that's just anecdotal from what I've seen on the Ramsey show. Rarely do we see a guy who's like, yeah. And like I'm engaged now and I'm. It's always a guy who's just sort of been babied by the parents and went, hey, you stay as long as you want and just pay off your debt as you can. And it slows them down. And so even Dave would say, hey, get out of the house. Have an exit plans for six months or a year, get out of the house, pay off debt aggressively and then pay the rest while you're still paying rent. If it slows down your debt payoff, we're okay with that because of the benefit you get on the other side of that, independence and maturity. Because Dave says an eagle that doesn't leave the nest is called a turkey. And that's kind of what we've seen is a 35 year old still living at home and still having the benefit of mom and dad paying their cell phone bills and covering insurance. And at some point, if you want to grow as an adult, you want to get married, you got to be your own person. That's a big jump. It's difficult. Sorry if I offended anyone living at home.

[George Camel]

Here's a really quick pop quiz. What is the most important resource? 3, 2, 1. It is time. And unfortunately, we all know it is way too easy to just waste countless hours of it scrol all away on your phone if that sounds like you and you want to be spending your time more productively. You could be learning about history, economics, or the great works of literature. And you can get started for free with our sponsor, Hillsdale College.

[Graham Stephan]

Hillsdale College is currently offering more than 40 free online courses in the most important and enduring subjects. Like you could learn about the meaning of the US Constitution, the rise and fall of the Roman Republic, or the history of mathematics and logic with Hillsdale College's online courses, all available for free. That is right. It's free.

[George Camel]

I personally recommend you sign up for Economics 101, the principles of Free Market Economics. In this free online course you will examine the foundational principles of the free market, such as the relationship of supply and demand, the failure of central planning, the rise of macroeconomics under the influence of John Maynard Keynes and the 2008 financial crisis. Take it from me guys, I actually studied econ in college and yeah, it is important stuff to know, but funny enough, paying for a degree in econ is not very economical. Also, the course is completely self paced, so you can start whenever and wherever. I strongly recommend you guys try out Hillsdale Economics 101 course, which is completely free.

[Graham Stephan]

Like I said, there's no cost and it's really easy to begin. Again, that's Hillsdale Edu Ich Hillsdale Edu Ich with the link down below in the description. Thanks again to Hillsdale College for sponsoring this episode. And now let's get back to the podcast.

[George Camel]

The trend of don't buy $5 coffees is the exact psychology that keeps society poor.

[Dave Ramsey]

I think what they're getting at, I think I've heard Ramit Seti talk about this is you want to focus on the big wins, the big changes, versus the little ankle biter, this three dollar thing here. And I get what he's saying, you know, if you, let's say you're getting a refund of, let's call it for easy math, 2400 a year. Well, if you change your withholdings, you could get $200 back in your life just by changing withholdings. Well, that's better than saving a dollar here or two dollars here. And so focusing on the big wins, selling your car if you're not underwater and you can get out of it, that's a much bigger win than cutting out a three dollar coffee every now and then. But I do think, I don't think the mentality of don't buy $5 coffee is what's keeping people broke. I don't see a correlation there. What I do see is the pendulum swinging to where they say, oh really, me not buying Starbucks is going to allow me to buy a house. Okay? And so they're very flippant, very sarcastic, very cynical about it. And the pendulum swings to where they go, yolo, I deserve a sweet treat, life's hard mental health day. And they just go spending like crazy. And so you've got to have a middle ground when we say I can enjoy life while living on less than I make and I can make short term sacrifices so I can have long term wins.

[Graham Stephan]

Yeah, I think it's about dialing it in. It's like the person who wants to lose weight, but they still want to eat a dessert and they go in with, oh, this, this cookie is fine. It doesn't matter. I think it does. I think it does matter because that one cookie is not just a cookie. It adds up and it sets you back in some way.

[Dave Ramsey]

Yeah. So I'm pretty much calorie deficit. Yeah. Like 100 calories isn't going to break the bank. But repeatedly with multiple cookies, you're not going to lose weight. And the same happens financially is, yeah, it's a $5 coffee, but if you're doing that every single day, well, that's a lot of money. That's 150 bucks a month. And if you add that to the other areas, you could save on cutting down your cell phone bill. Let's reshop the insurance, let's pause investing, let's change our withholdings, let's make a little more money. All of that combined now has some serious momentum.

[Graham Stephan]

I did a calculation a while back where it was like, if you started just, I think it was like $5 a day on coffee starting at the age of 18 in a Roth IRA, what that would be worth over 40 years. And I think it was like $1.2 million tax free of just $5 a day. And that's your coffee.

[Dave Ramsey]

Yeah, and the coffee's just an example. And what people get stuck on is Graham doesn't want me to enjoy my life. The one thing keeping me alive and making life tolerable is this coffee. And you're not saying it's about the coffee, you're just saying think about what a five dollar sacrifice could do for your future. And now look at that exponentially across all of your expenses, across your whole life. And then don't complain that you're broke in retirement. When Graham just showed you how you could have had a million by changing one habit. That's the frustrating part is people see it as, oh, you want me to just suffer and beans and rice, rice and beans for the rest of my life. Dave ain't eating rice and beans. He did it for a short season so that he could have a better life on the other side. Most people are unwilling to sacrifice for two years and yet they're willing to live in mediocrity for the next 20. Yeah, that's America.

[Graham Stephan]

What do you think the one thing people could do today to improve their finances is?

[Dave Ramsey]

Oh, man. What's the one thing you could do today to improve your finances? Pay attention. And what that means is looking at what your actual income is. What are your actual expenses? Now, what you think it is not how much you think you spend eating out or how much you think you spend on groceries, but what is it actually? And most people would be shocked if I said, jack, how much do you think you're spending eating out? You might say $450. $450. Now, let's say Jack actually tracks how much he spends over the next month. He would be astounded to find out that he's actually spending $700.

[George Camel]

That's probably more like it. Yeah.

[Dave Ramsey]

And so I think looking in the financial mirror is the most important thing you can do. And it's why we say do a budget. Download everydollar. Get your income on there, get your expenses on there. Track the expenses. It doesn't have to take a long time. You can sit it while you're waiting for your coffee. Drag your four transactions for the day up into the right categories. And doing that ahead of time will help you avoid overspending. Because the reason America's broke is not because of inflation. It's not because of the economy. It's because they're not living on less than they make. That's it. It's that simple. And if Congress did this, we wouldn't have the deficit. Right. If we could just live on less than we make, we wouldn't have $36 trillion.

[Graham Stephan]

And did you see that Elon Musk wants to Department of Government Efficiency. Doge.

[Dave Ramsey]

I think he would make it spelled.

[Graham Stephan]

I would love that.

[George Camel]

That is my number one thing. I'm excited.

[Graham Stephan]

Me, too.

[George Camel]

Yeah.

[Dave Ramsey]

What does Elon have to do? You think Elon's going to get criticized?

[Graham Stephan]

Yeah. He has criticized the national debt for quite some time and blow spending. And he says you should have a third party auditor go through government spending and get it down because it's so wasteful. I agree.

[Dave Ramsey]

I'm with it. I think that's the one. That's a bipartisan policy that Dave Ramsey and Graham Stephan can agree on.

[Graham Stephan]

Yeah.

[George Camel]

I think it's easy to get the public sold on something like that, but it's very difficult to get the people that actually make the decisions for the people, which aren't the people these days. Honestly, it's just like the bureaucrats. I don't think that they would allow for something like that to happen. And I've mentioned this, Graham. I've been saying this for a while. We need 10,000 accountants to audit the government.

[Dave Ramsey]

Oh. Instead of auditing the American people.

[George Camel]

Yeah. Why are we not auditing the government? There's no, like.

[Graham Stephan]

Makes sense.

[George Camel]

There's no, like, easy registry of, like, seeing where actually the government is spending their money. Like, they kind of generally tell you where it's going, but we also have no frame of reference.

[Dave Ramsey]

And there's no public data showing all this.

[George Camel]

No, like, they do come out with, like, reports, but it's still pretty ambiguous. Ambiguous.

[Graham Stephan]

I love the one. There was, like, a million dollar toilet in San Francisco.

[George Camel]

Yeah.

[Graham Stephan]

Have you seen this? Yeah. There's a whole website that goes through, like, wasteful government spending, and they'll show, like, a stupid little thing. And it's like, the cost should have been $50 or like, you know, they're overpaying for everything. It's a million.

[George Camel]

Yeah.

[Graham Stephan]

Or this fire hydrant would cost 5,000 and it's $100,000 for this thing. It's like, everything is so expensive.

[Dave Ramsey]

Well, no one's really paying attention. I mean, the government kind of has a reputation. They have a blank for not caring.

[Graham Stephan]

And so people just say, oh, here's how much we're charging. All right, here's the blank check. Just write an amount and it's paid.

[Dave Ramsey]

Yeah.

[Graham Stephan]

That's all scary. Yeah.

[Dave Ramsey]

I do think, and I hope whoever is next in office takes a harder look at that. And I don't know that we're going to see it from the Democratic side. I don't know. But I also saw an interesting stat that showed that Kamala would put us in a far less deficit than Trump.

[Graham Stephan]

Oh, because of tax cuts.

[Dave Ramsey]

Because of the tax cuts. It was like a 1 point something for Kamala, whereas 5 point something for Trump. If, you know, as far as the.

[Graham Stephan]

Deficit, I think that's only because she wants to tax so heavily. That's really all it is. That's where it's coming from.

[George Camel]

That's probably.

[Graham Stephan]

She's wanted to tax.

[George Camel]

Including, like, the wealth tax, like, the unrealized gains. Yeah.

[Graham Stephan]

And it's including a 28% capital gains tax rate, which is not the end of the world.

[Dave Ramsey]

Right.

[Graham Stephan]

But you know, when you. When you have one person wanting to cut taxes and one person wanted to increase them. Yeah. You know, of course that. But still, we spent $3 trillion more a year than the United States brings in. And when you look at how much you're spending on income taxes, I think there is a point to be made that we could abolish the income tax entirely and just spend less money. An audit the government.

[Dave Ramsey]

No income tax in Tennessee, and things are Totally fine. Yeah. What is your take on the unrealized capital gains tax?

[Graham Stephan]

Awful.

[Dave Ramsey]

I mean, it's horrible. What I've seen is it's unconstitutional. You can't.

[Graham Stephan]

Yes.

[Dave Ramsey]

It's a direct tax on property, which is unconstitutional.

[Graham Stephan]

All they say is, hey, let's. Let's. Let's virtue signal and let's point our fingers at these nasty billionaires and we should tax them. They're not paying their fair share, but these are people that are employing hundreds of thousands of people across the world.

[Dave Ramsey]

Yeah.

[George Camel]

And they already paying a lot in tax.

[Graham Stephan]

They're paying a lot.

[Dave Ramsey]

Oh, yeah. And all will tell you, he pays.

[Graham Stephan]

A whole lot in the company. You know, a lot of these are illiquid anyway. And, yeah, they will occasionally sell. Like, Elon Musk has paid more money.

[Dave Ramsey]

In tax, and I feel like he's been more transparent than most people.

[George Camel]

There's just no competition and no marketplace. When the government's involved, they just make the decision.

[Dave Ramsey]

Agreed.

[George Camel]

And they are not business people. They don't know how to run a business. It's completely different. So I don't know. I think.

[Dave Ramsey]

I think we should solve it. Guys.

[George Camel]

I agree. We need.

[Dave Ramsey]

We're the three most unlikely folks to jump in there and fix this, but I think we could do it.

[George Camel]

I think we need doge.

[Graham Stephan]

Yeah.

[George Camel]

I have government.

[Dave Ramsey]

I think you meant dogecoin. I was like, I don't know if that's going to help at this point. No, I'm here for it.

[Graham Stephan]

I know. I think we need Elon to go through 100%.

[George Camel]

Just 100.

[Dave Ramsey]

He also spent 44 billion on Twitter, so how can we trust his finance?

[Graham Stephan]

I think.

[George Camel]

I actually don't think that was okay. In fairness. In fairness. Well, let me say this. He did not do that to get an roi. At a certain point, I think Elon Musk.

[Dave Ramsey]

It was a musk.

[George Camel]

Was.

[Dave Ramsey]

It was out of principle.

[George Camel]

It was out of principle.

[Dave Ramsey]

I want to keep protect speech alive.

[George Camel]

Yeah. Freedom of speech, which he has gone on the record and said. So essentially, that was just like a luxurious purchase for him, which he could probably spare.

[Dave Ramsey]

That which is the ultimate flex. It is.

[George Camel]

Yeah. And I also think that they. Yes, he did overpay, but they have been doing well, so it'd be interesting to see.

[Graham Stephan]

Yeah, it's interesting to see. He cut, like, most of the staff and it. Twitter is still running just fine.

[George Camel]

You can still tweet with the government.

[Dave Ramsey]

Last I checked, I can still tweet.

[Graham Stephan]

I heard that he's lost about half of his value. From Twitter. So.

[Dave Ramsey]

And he's okay with that.

[Graham Stephan]

Only lost, you know, 23.

[George Camel]

He's probably fine with paper.

[Dave Ramsey]

I don't think he's concerned. He's having a good time.

[Graham Stephan]

He's probably got good write offs from that. I don't know. And he has his own platform.

[Dave Ramsey]

Have you guys interviewed him?

[George Camel]

No.

[Graham Stephan]

We would love to.

[Dave Ramsey]

All right, Elon, I know you're watching this episode.

[Graham Stephan]

Talk about the national debt.

[George Camel]

Elon is the number one dream guest. Yeah, we would love to just talk about the national debt. That would be the number one thing.

[Dave Ramsey]

All right. Right.

[Graham Stephan]

For an hour just Elon Musk.

[Dave Ramsey]

Say the word guys.

[Graham Stephan]

National Dad.

[Dave Ramsey]

I can text him right now, please.

[George Camel]

You know what's interesting is Warren Buffett said the way we can solve the national debt. I don't know if you guys saw this clip but it like went viral recently for some random reason is we need to end like lifetime politicians. And if we don't get into a budget surplus by the end of people's terms, then we just swap them out. So you cannot continue to be a congressman.

[Graham Stephan]

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[George Camel]

Or Congressperson.

[Dave Ramsey]

If we are at a budget deficit that's impressive. I'm all for agree.

[George Camel]

That'll actually light a fire under him. You know rather than just letting him.

[Graham Stephan]

Do just resort to short term measures to temporarily boost the budget. Like let's say just upping tax one year.

[George Camel]

Yeah.

[Graham Stephan]

Or finding short term.

[Dave Ramsey]

But then who's going to vote them back in if they took a shortcut that hurt the American.

[George Camel]

No, that's a good point. Yeah.

[Dave Ramsey]

I think we try it. I think term limits are.

[George Camel]

I don't know why we're still in budget.

[Graham Stephan]

I honestly think that we should do is not be in a surplus or a deficit but purely just let's break even every year.

[Dave Ramsey]

That'd be.

[Graham Stephan]

We don't have to make.

[George Camel]

That's it. I mean that's the next step. That's the next step.

[Graham Stephan]

Break even.

[George Camel]

Yeah.

[Graham Stephan]

Let's just spend what we make.

[Dave Ramsey]

Yeah. The idea of the government making money and having profit, that's slim chance in our lifetime.

[Graham Stephan]

Right. Social Security is also a big one. That is the biggest scam.

[Dave Ramsey]

That one's scary.

[Graham Stephan]

And how much you Pay into that.

[Dave Ramsey]

And then how little we might and will get.

[Graham Stephan]

It's funny, I saw on Twitter that for the average person paying into Social Security, if you maxed it out every single year, your benefit by the time you're like 70, assuming you wait, is like $5,000 a month. It was like $4,800 a month. But if you just took that money yourself and invested that, you would have $30,000 a month.

[Dave Ramsey]

If you didn't pay Social Security ever.

[Graham Stephan]

In your lifetime and just invested that.

[Dave Ramsey]

It was a forced investment.

[Graham Stephan]

Yes. From the age of like, you know, 20 something until 70, $30,000 a month versus the $4,800 that you get instead from the government.

[Dave Ramsey]

Very poor returns, Horrible money in Social.

[Graham Stephan]

Security, what you're paying for is the other people before you. It's a. It's a Ponzi scheme.

[Dave Ramsey]

And it was. It was never meant to replace your entire income. It's like 40%. And so most people see is they're the average payment from the Social Security right now is 1,700 bucks. Some people are seeing 900 bucks and they're wondering, like, I thought this was going to float me. And we get calls on the Ramsey show. This is like not anecdotal. This is real life. People are trying to live off of Social Security alone and realizing that they're on the poverty line, if that.

[Graham Stephan]

So it's interesting. I did a deep dive into the Social Security deficit for a video. When it first came out, people were supposed to take it at age 65. The average life expectancy at the time was 68.

[Dave Ramsey]

People were three years.

[Graham Stephan]

People were only meant to take it on average for three years.

[Dave Ramsey]

I would be in favor of abolishing Social Security but forcing an investment, a wise investment, out of your income to where, whether you like it or not, you're going to have some money in retirement.

[Graham Stephan]

I would love to see that.

[George Camel]

The funny thing is the irony of Social Security is the first ever recipient. Her name is Ida May Fuller had contributed $24.75 into Social Security. She ended up collecting $22,888 over her.

[Dave Ramsey]

Let's go, Ida. Wow.

[George Camel]

That was her contribution and the amount she received. Her first check was for $22, and she had contributed 24.

[Dave Ramsey]

Wow. So they didn't set it up wisely to begin with.

[George Camel]

It sounds like. No, it's about a thousand x return for Ida.

[Dave Ramsey]

Good for her, though.

[George Camel]

She definitely made out well.

[Dave Ramsey]

That's like a lottery.

[George Camel]

She's honestly probably the number one investor of all time is the first person to Social Security. That's honestly probably true.

[Dave Ramsey]

Graham's jealous of those returns.

[Graham Stephan]

Yeah, that's fantastic.

[George Camel]

Yeah.

[Graham Stephan]

Social Security is a scam.

[George Camel]

It is.

[Graham Stephan]

That's all I'm going to say.

[George Camel]

Okay, what would you say is the most effective way of making $1 million?

[Graham Stephan]

Although, before we go into that, if you guys weren't aware, I got a coffee company. It's called Bankroll Coffee, and our goal is to bring you the highest quality coffee at the most affordable price. Now, as far as delivering on that promise, I had to do a ton of research on the best e commerce platforms to use, and that is where our sponsor, Shopify was there to help. Shopify is home to the number one checkout on the planet, with way less carts going abandoned and way more sales going.

[George Camel]

For example, Shopify is a service called Shop Pay that lets customers save their email address, credit card, shipping and billing information, which boosts conversions up to 50%. And if you're into growing your business, your commerce platform better be ready to sell wherever your customers are scrolling or strolling on the web, in your store, in their feed, and everywhere in between. All in all, it is very clear that nobody is selling better than Shopify. So if you're ready to upgrade your business and also you want to use the exact same checkout that Bankroll Coffee uses, you can sign up for a $1 per month trial period at shopify.comich. all lowercase again, that is shopify.comich to upgrade your selling today at shopify.comich just $1 to try it out. Highly recommend it. Thank you so much, Shopify, for sponsoring this episode. And back to the podcast. What would you say is the most effective way of making $1 million effective?

[Dave Ramsey]

That's an interesting way to put it. I mean, depends on your skill set and the timeline. Because if you want to do it effectively over 30 years, it's going to be a lot less hassle, a lot easier than trying to do it in five years. One of my most viral clips on social media, I was talking to a kid. He called into the Ramsey show. He's 19. He said, hey, how do I turn $100,000 into a million dollars by the time I'm 26 or 25? I said, why are you trying to make 900 grand on your money in five or six years? And she said, I don't know. It's just a question. There was no real theory behind it, no real goal behind it. It was out of fear. He just said, I need Money now while I'm young, because I'm scared I'm going to end up like my parents or retire broke or do something I hate. So I think when it comes to that question, you've got to look at your motive behind it and the urgency behind it. And so for me, the way I actually did it, it took nine years. I invested in my company 401k, 15%. I was debt free with an emergency fund. Beyond that, I got a reasonable house, small mortgage, paid it off aggressively, that house appreciated in value, rolled that into the next house, kept investing 15% and that's all I've done. And over time, the home value that's completely paid for, 100% equity plus the investment accounts that equaled a million dollars and that took nine years. So the most effective way is investing 15% of your income and getting a house and paying it off. Those two things combined are all you need to have a net worth of a million dollars. Now, if you're wanting a cash millionaire, meaning you have a million dollars in cash, well, your savings rate is going to be more important than the return if you're trying to do it in a short amount of time because the chances are the market's not going to give you 500%. The chances are you didn't get in Bitcoin 10 years ago and now it's thousand dexed. And so I would say take as much of your income as you can, live on as little as you can, and throw the rest into the market, into an index fund outside of retirement, if that's your goal, to have it in the next five or 10 years. Because basic math says you save 100 grand a year, in 10 years you'll have a million even if you didn't invest it just in a checking account. And so if I can then invest that money, I might be able to put 500,000 in and it can grow to a million over a period of time. So the most effective way to me for the Everyman is investing into the market, into mutual funds and index funds. That's the better way to do it with your own income. I don't know of a cooler way, only fans. That's one way. I don't know if you've seen what I got going on. Not cut out for it. I'm much more cut out to give financial advice on YouTube. How about you guys? Do you have any other strategies that you're not.

[George Camel]

Your gatekeeping effective way would be, I mean, it's, it's. I don't want to say guaranteed. But it's a hard thing to fail when you're just saving up money and investing it into an index fund. So I would say that's probably the most effective way. Although that's not the way that I would tell my friends. The way I would tell my friends would just be, continue to work on your skill set to earn more money.

[Dave Ramsey]

Yeah.

[George Camel]

Because, you know, although, yeah, sure, you can end up making a million dollars.

[Graham Stephan]

The.

[George Camel]

The former way, it would end up taking a while. So I would just say, yeah, build up your skill set, try to earn a lot of money, and then invest the money and hopefully that grows as well. Buy assets, not liabilities, and then you'll end up being worth a million bucks.

[Dave Ramsey]

Yeah.

[Graham Stephan]

Personally, I think online sales, because it's scalable, and anything with sales, you could get good at it. Like, you don't have to be naturally great at sales.

[Dave Ramsey]

Are you saying, like, start a store like a Shopify, or are you saying be in a sales job?

[Graham Stephan]

I think a sales job is really important. But if you could merge sales with something that's online sales and marketing. Sales and marketing, something like that.

[Dave Ramsey]

So figure out what a product a lot of people want is and get really good at selling it. Yeah, yeah, no, that. That's a great way. Again, that's a skill set. I don't have to go, like, go sell something on Amazon and sell a bajillion of it and make the spread. That's not in my wheelhouse. Not something I'm even interested in doing. What's interesting about the question, though? I love to ask this. This is my new favorite question to ask anybody who has a financial goal. I say, and then what? You make a million dollars, and then what is your life magically better? Do you retire on a beach? What is the purpose behind this? I love asking that because it gets to the heart of that person and what they're really after. Because I can usually change their entire goal based on what their motive is. I can usually go, oh, you just need a job you don't hate. You don't need a million dollars in six years. You just need to not have a toxic leader and do something you're passionate about that you're good at and have someone recognize that and make 50 grand a year.

[Graham Stephan]

That's a great way to put it.

[Dave Ramsey]

So that's.

[Graham Stephan]

I like that a lot.

[Dave Ramsey]

Have you guys ever thought about, like, you get to a financial goal, and then you're like, okay, what's the next thing you know? Because you guys are very Goal oriented people. You've achieved a lot of success in a short amount of time. A lot of people look up to you. Have you ever thought, like, what is the point of all of this? Is it to get to the next million? Is it so that I can become a real estate mogul? Is it so that I can retire at 35? What is the point? Have you guys set those goals for yourself?

[Graham Stephan]

I try to think about it every now and then, but I also like having goals, even if it's just for the sake of checking something off the box. Sometimes I like that. Like, I'll even go through and make a list on a Saturday of things I could do around the house. Clean the windows and just did that. You like, clean up the litter box. Check that off.

[Dave Ramsey]

How do you. How does Graham Stephan relax? What does that look like?

[Graham Stephan]

Being productive? So really, that's my way of. You know what? I had so much fun the other day. I painted the closet. So.

[Dave Ramsey]

Wow.

[George Camel]

We.

[Graham Stephan]

Yeah, so we.

[Dave Ramsey]

Something no one will ever see in four years.

[Graham Stephan]

We've not built out our closets. So when you get like a new construction house, they give you the base, the builder special, which is just a rod that goes in the closet. That's it. That's all we had for four years, is just a rod. And I told Macy after we got married that I build out the closets. Four years later, I kept my promise. We built out the closets, but when they ripped it out, they say, oh, no, we don't. We don't touch up that. You know, all the paint and everything that was just ripped off. So I went to Home Depot and I got paint and I color matched it.

[Dave Ramsey]

Wow.

[Graham Stephan]

I got some Spackle to, like fill up the holes. I spent like three hours painting the.

[Dave Ramsey]

Closet and it felt great. I loved it.

[Graham Stephan]

I put on music.

[Dave Ramsey]

And can you tell us what music? I think that's an important part of the story. Who?

[Graham Stephan]

Danny Elfman.

[Dave Ramsey]

Danny Elfman. Wow. You're a soundtrack guy.

[Graham Stephan]

Yeah. Love it.

[Dave Ramsey]

I love that about you. So that's an interesting point. There's a quote that really stuck with me that made me question everything because I can't help but be productive and helpful. And it's from my friend Ian Simpkins. And he said, if busyness is your drug, then rest will feel like stress. And I was like, oh, I'm bad at resting because it stresses me out to just be.

[Graham Stephan]

Yes.

[Dave Ramsey]

And I feel like that's my next life goal is to figure out how to just be. And now that I have a One year old. It's really hard to just be. Just to be present and not feel like I need to be doing something more. I need to be more helpful. I'm gonna check my phone. To just be in the moment is so difficult for me. And I realize that's why I don't enjoy a lot of things anymore. Because in the moment of enjoyment, I'm just going, I should be doing something more productive. Or I'm overthinking the moment, or I'm watching a movie and I'm wondering, how much money did it take to pull off that scene? And what did the actor. I can't just be. Have you guys struggled with this? Or is just me? Am I going crazy?

[George Camel]

I used to a lot. A lot, a lot. And this is interesting, but I had a friend. I still have him. He's still my friend, but. But he was so happy and positive and, like, optimistic all of the time. And I always, like, observed this, like, subconscious, I guess, like, aura that he had around him. And then finally, after observing this for such a long time, I asked him, like, hey, why are you so, like, positive all of the time and happy and outgoing and just like. Like, how do you do it? And it doesn't seem fake. Like, it seems real? And he said, well, to be honest, like, I just read a book that helped me change my perspective, change my mental framework. And he told it to me, and it's called the Power of Now by Eckhart Tolle. And I read the book, and it helped me learn how to be present. The idea of the Power of Now is to not focus on the future or the past, but to be able to live in the present moment. Because the past doesn't exist anymore, right? And the future doesn't exist yet because you really don't know what's going to happen. The only thing that truly exists is the second that we're in right now. And this book kind of, like, reiterates that and reinforces that framework, which helped me enjoy the present moment and I guess not stress myself out so much with things that don't exist, like the past and the future.

[Dave Ramsey]

Wow. You should hand that book to our friend Graham. And I read it. I'll take it. Next.

[George Camel]

You should read the Power of Now.

[Dave Ramsey]

Okay, I'm next then.

[George Camel]

I've read it.

[Graham Stephan]

It just didn't help me.

[Dave Ramsey]

He's been hit very, very, very far.

[George Camel]

On the other side. But also, I think that, realistically, Graham wouldn't take that book as seriously as I would have liked to, like, for Me when he told me about this book, like, this is something I had observed over the course of several months and I was so interested in that. Finally when he gave me the reveal, I was like, okay, well I better like really listen to this book. And although it was a little bit whimsical and woo woo, like every paragraph, if I don't, if I didn't understand it, I would reread, reread, reread, because I really wanted to try to.

[Dave Ramsey]

You really connected with it in that. Part of that, I think is you have to have a pain point that is painful enough that you're like, all right, I want to explore this, I want to overcome this. And for Graham, that pain point isn't really there. It's not a problem. So same with if you read my book Breaking Free from Broke and you don't feel like you can do any better financially, you don't feel like you have any financial problems, then you're gonna read the book and go, eh, that was fine. Good. Little witty, some financial advice in there. It's cool. But if you are hungry for the material and you're going, I am tired of living this way. I want it to be simpler. I want a more peaceful path to getting build wealth. I don't want to be a part of the system. This book is going to be like manna from heaven. And so that's what I think the difference is when it comes to pain points. It's why people call into the show and they wanted to justify their own decisions and we don't give them the benefit. And so we hang up and go, we didn't help that person because they didn't really want our help. They wanted us to go, you're doing great. Just keep doing what you're doing. Do nothing different. But when people are hungry for the advice and they're really in a point of pain, they are willing to go sell the car the next day. They're willing to make those sacrifices. And I think the that's true with anything in life that you want to grow in.

[Graham Stephan]

Yeah. What do you think the biggest wealth killers are as one of your most popular topics?

[Dave Ramsey]

Oh yes, America's number one wealth killer. The video that we did on that very first one was on car loans. And it's because of a trend that I kept seeing as I wrote the book. I was comparing all the debt levels of a consumer debt in America and we all know we've heard the number, what, 1.7 trillion in student loans. There's a crisis out There and then I looked up and I saw that, that car loans were meeting student loan debt. It was at 1.6 trillion when I wrote the book and I was flabbergasted. How did we get here? Like, how did we go from a car is a necessity. From A to B, cars are, you know, for a new car, back in my day, it was like 25 grand was a brand new, that was a nice car. And now it's normal for someone to call into the show and say, I bought a car. We have $50,000 loan at 9% interest on this car. And it just blows my mind. And so I think having a car payment, keeping a car payment for your whole life, which is what most people do, is the number one wealth killer. Because if you freed up that payment, you could invest that instead, you could save it and upgrade your cars in cash without ever paying someone interest while fully owning your car. And so breaking down the math of that was mind blowing. As far as wealth killers go, the other ones we can look at, you know, by the numbers and go, okay, student loans are wealth killer. Credit cards are now creeping up 1.2 trillion in credit card debt. You guys don't want to talk about that because you're the responsible ones. You don't have credit card debt. But a lot of people struggling with this type of debt, crazy interest rates, the average is now 22% or more on these credit cards. And so the ankle biter ones that are sneakier are things like the buy now, pay later programs. A lot of the younger generations are saying, I don't want credit card debt. No thank you, but I'll put all of my, my entire cart on a firm and afterpay and I'll just figure it out later. And what happens is you just kind of add it to your tab and at the end of the night you go, oh my gosh, how I have a 300 payment to Afterpay for all this crap that I thought I needed. And most of it is just frivolous crap. It's clothing and entertainment and electronics and stuff we don't need. And so those are the major wealth killers I'm seeing with younger generations is the buy now, pay later. And across the board car loans I think apply to almost every American. Most people don't think they can even buy a car in cash. They think they're going to die in a paid for used car. That's the truth.

[George Camel]

An interesting thing on the cars is I feel like cars also just haven't gotten a whole lot More reliable or better? In the past, like 20 years, sure, they've gotten safer. That's like the main thing. I feel like that's a perk. But I was on R Buy it for Life, which is a great Reddit thread or a subreddit, and I was looking through that and a lot of the top posts are people driving like, like, you know, Honda Civics from like the 80s. And they're like, I bought this 40 years ago, it has 400,000 miles and it runs perfectly. Well, it runs perfectly. But I feel like nowadays, like, even if you buy like new Toyotas, which Toyotas are like, you know, pretty reliable, if you don't like maintain them perfectly fine, they end up just having issues.

[Dave Ramsey]

I still think people are choosing unreliable cars and then complaining about reliability. And there's also this fallacy of the paranoia of, well, I need to be in a safe, reliable car, so therefore it needs to be a 50, $50,000 new car. And I dispel that myth. In the book, I talk about how new cars can be unreliable. They can have issues, they can have recalls, the insurance is more expensive, they have fancier features, they have to insure. And so, yeah, that's going to come with a higher price point versus buying something used. We're all Tesla guys now. I bought my Tesla in 2021 and it was a 2013 at that point. It was, it already had seen some things. You know, it had four owners, it had a 160 something thousand miles. And it was a gamble. It was a gamble I was willing to take if this car imploded. I was like, all right, that hurt, but I'll move on with my life. Because the price point was so low. It was at, you know, the MSRP on that thing was probably what, 80, 90 grand at the time in 2013. And I bought it for 20 something grand. So I was willing to take the risk. And it's panned out. I still drive it. I'll probably drive it until it can't run any longer, which I don't know if you guys have done the research, how long can these electric cars go? Tesla's half a million or more.

[George Camel]

Yeah.

[Dave Ramsey]

And I'm at 190. So I'm just barely seeing the life of this thing. Other than battery degradation, which it's gone down 20% over the last 11 years now. I think it's going to keep riding on into the sunset. So I think people make excuses when it comes to the cars they buy and purchase. And you can buy a $12,000 Honda Accord. And it's a great vehicle that will last you a very long time if maintained well. And you don't have to go finance a $60,000 Kia Telluride because of safety features. I call BS on that. You're trying to look good, you want to flex, you want the fancy smell. Go get your car detailed for 200 bucks and you'll feel like it's a new car.

[Graham Stephan]

Now, when it comes to giving advice to people, how do you balance being nice to them or being maybe a little tough love? Because you recently collabed with Caleb and I saw, by the way, his video, the driving video.

[Dave Ramsey]

Oh, yeah.

[Graham Stephan]

Incredibly well for you.

[Dave Ramsey]

It was what the people of the Internet and the algorithm wanted was millionaires in cars getting coffee with Caleb Hammer. Yeah, I think people see us as two sides of a coin. We're both young, nerdy guys with glasses trying to help people. We help them in very different ways. And so when it comes to the collab or being nice and how do I know when it's tough love or nice, I look to date to be a great model of that. Because Dave is known for tough love. He's going to jail at you, get your butt off the couch and go to work. But it's all out of love. At the end of the day, Dave truly no skin in the game other than he wants to help you transform. That's his life verse is Romans 12:12. Be not conformed to the pattern of this world, but be transformed by the renewing of your mind. So Dave's big on you change your mind, you change some actions, you can change your life. That's all he's trying to do in the call now, a single mom calls in who has, you know, had the rug pulled out from under her life happened. He's not going to yell at the single mom. He's going to treat her with a different level of compassion than an 18 year old who wants to argue and complain and whatever about his life. So the way I see it is whatever you called in for, I'm going to be compassionate. I'm going to give you the benefit of the doubt as soon as you put up more walls, more excuses. You're not really wanting to change. You're not really wanting the advice. That's where I begin to lose patience and I begin to go a little harder on you if you're not, if you're not getting it. We're also up against the clock. We gotta remember this is radio. We don't have the benefit of Going an hour and a half with these callers. We have three to five minutes with a caller. That's not a lot of time to have them unpack their entire situation and have two co hosts rattle off some advice and get to the next caller. So the way I look at it is I lead with compassion. If they're making excuses, they're getting impatient. They're wanting to argue and debate. That's when I go into a little more tough love and go, listen, you called us for advice. You called in because you have a problem you want to solve. I gave you the solution. You are not happy with it. And so this happens a lot with callers lately. I feel like they're calling in to justify their decisions. They want to just bounce an idea off of us. They want an easy way out. They want a shortcut, and we're unwilling to. That's not how the show works. It's always been, you gotta sacrifice. You gotta live on less than you make. You're not gonna pay off debt by taking out another piece of debt. It doesn't work like that. You've got to get out once and for all. So if you want to change, we're here to help. And if you don't, I'm gonna give you a tough time.

[Graham Stephan]

What types of people do you see actually make a change?

[Dave Ramsey]

We talked earlier about the pain point, and you have to have the I've had it moment. That's what Dave calls it, where you drew a line in the sand and you said, I know my life is worth more than living in debt for another 20 years. Or, my husband and I have been in debt our whole life and we've never had a great marriage. And part of that is because of money problems. Those are the people that have the best chance of helping them. And so you can tell in a call, even as a listener, you guys could listen to a call and go, oh, they're actually going to go do that. You can hear the light bulb go off. You can hear the aha moment. You can hear the excitement versus the. If we at the end of a call go, how does that hit you? We have. We have not done a good job convincing them, and they are not ready for that life change. And that's okay. But that. That is one of the hardest parts of the job that's the most frustrating, is you want to help every single caller that comes in. You want to give them the aha moment where they go change their life for the better and take that right next step for their money. And I would say 70% of the calls these days, they're not ready for it. We gave them the right advice and maybe we won't win some enough. Maybe we weren't as persuasive. Maybe Dave could have done a better job if he was here on the show. But at the end of the day, I sleep well knowing it's the same advice I would have wanted, the same advice I would have taken and the same stuff I would do.

[Graham Stephan]

What are your thoughts these days about renting versus buying? If people call in and ask what's better?

[Dave Ramsey]

Better, I think is the fun, funny word there. Is it better to rent or buy? Well, depends. If you're broke, it's better to rent. If you've got money and you're in a good financial position, get off the sidelines, buy a house, get your foot in the door. It's a moving goalpost. The $400,000 house five years from now is likely going to be more. It's going to be 500,000 or 550. And so I want people to buy a house as soon as they're financially ready. And it's a simple strategy here. Are you consumer debt free? Do you have an emergency fund and do you have some good reserves to put down on the house? If you're doing it that way and the mortgage isn't going to be 60% of your take home pay like some of these callers have situations, then go ahead, buy a house and do it for the right reasons, do it in the right area, do your research, work with a real estate pro and do it the right way. But most people are so frustrated with pent up rage about renting that they're just willing to do anything to get in that house at any cost and it becomes a burden instead of a blessing. That's what pains me when people call in, they've made that mistake.

[Graham Stephan]

And how do you think the election affects most people that call in?

[Dave Ramsey]

In reality this election, whoever is president will have little to no effect on your personal finances, how much you make, how much you take home, your spending habits largely, that's still going to be the same as it was. We can argue about, well, what if they change a tax law which largely affects the ultra wealthy, what if it affects other policy that could trickle down and affect me at the end of the day, when you look at me shopping at the grocery store and me paying my bills, there's very little that a singular politician can do in the White House that could affect it. Now state and local politics Way more effect on that. We have a bill right now. I just saw it in one of my neighborhood Facebook group. And there's a bill that could increase all of our property taxes. And that is a much scarier thing than the person in the White House chiming about some student loan forgiveness that will never happen. So I don't think the election is going to affect many people. It'll affect them emotionally. There are other policies that aren't financial, but when it comes to personal finance, which is the world I live in, it's still going to be the guy in the mirror with the same income, the same job, the same habits, the same lack of budgeting. That's what's going to hold you back, not the person in the White House.

[Graham Stephan]

Now, what do you think the government.

[Dave Ramsey]

Should be responsible for upholding reasonable laws. That's all I expect out of a government. And give me my driver's license in an efficient manner and let me go about my day in my way. The problem is I think the government has now overreached. They're trying to cause people to become dependent on them and go, hey, you need us. So this is why we need to be more involved, more regulation. And sure, I don't want to live in a chaotic society. I want to live in a organized society. And so it's kind of like the hoa. HOA can be great. It can uphold your property values. It avoids Joe Schmo having an RV and chaos in his front yard. But it can also mean a lack of freedom to do what I want to my house. So I think there's a reasonable level of involvement. And I think overall, we're seeing the government want to step in more and more to solve things in ways they are not capable of solving and not good at solving in a way that the private sector could solve much better. You know, and that's kind of where Elon comes in and goes, guys, you got to think about this differently. If you think of it like a business, it should have been bankrupt 70 times over by now based on the spending and the revenue.

[Graham Stephan]

And so a lot of it to me seems like bribery from both sides.

[Dave Ramsey]

A lot of trying to get votes.

[Graham Stephan]

Of just, we'll lower your taxes if you vote for me. Oh, well, if you vote for me, we'll give you a $10,000 home buyer credit. Or if you vote for me, we'll do this.

[Dave Ramsey]

If you vote for a politician for something they're going to do for you already lost. You've already given up your agency as a Human over to someone who truly does not care about you. That's the frustrating part for me. And so truly I don't care who wins the election. My life will largely be unchanged wherever I cast my vote. And I think I'm totally okay with that. And I will survive regardless. Way to eat a tea. You listening to an app for PC Game Pass? Want new games on day one? Like Indiana Jones and the Great Circle? How about living out your Sims life with EA Play? We Talking high quality PC games all for one low monthly price? We got you. Learn more at Xbox.com PCGame Pass or click the banner Indiana Jones and the Great Circle. Available December 9, 2024. Game catalog varies by region and over time. Okay, that's the ad. You can go back to doing whatever you were doing now of who it is. As long as they don't truly cause World War 3 and end the world, we will survive and live to fight another day. And so that's kind of my stance on all of this stuff is it's fun to talk about policy, but when it comes to certain politicians changing your life, it's not going to happen. Like, you have way more ability to change your life than anyone out there. And you guys know that no politician was the reason you're here today because you guys hustled your butts, did it for a long period of time and entertained and served a lot of people. That's it.

[Graham Stephan]

Speaking of a lot of government overreach, do you think that there should be a minimum wage?

[Dave Ramsey]

Oh, do I think there should be a minimum wage?

[Graham Stephan]

Should the minimum wage be nothing? I just set by the current market rate, whatever someone is willing to accept is the wage.

[Dave Ramsey]

I mean, that is how I think largely economy's been going. Because when you look at the federal minimum wage, you can't live on that anyways. And so at no point in history was $7 an hour going to give you a wonderful life. And if you look at old, you know, you can look at, well in the 1940s all and you just needed a nickel and you could buy. Sure, we can look at the old days, but in today's economy, no one is making it off of seven bucks an hour or even $13 an hour. Like that's 26 grand a year. And so I believe that you're much better off going, not what is the minimum wage I can get on by for the rest of my life, but what are ways I can increase my skillset and marketplace value to go get a $20 an hour job instead of the 15. What are the changes I need to make about myself to get me there? And so I think the argument about minimum wage is just a, it's a losing argument because who wants to stay there?

[Graham Stephan]

I think a lot of this got brought up recently because of California's $20 minimum wage for fast food workers. And it was just isolated originally to certain fast food chains. And from what I've heard is that it's not just impacting the fast food work because initially the thought was that it's just this and then everything else will be the normal minimum wage. What I heard from someone was recently impacted by this who runs a smallish business, is that all the employees expected a raise. And this is not fast food. They all expected a raise as well because they said, well, why am I working for or $16 an hour when I could work a fast food job and get 20?

[Dave Ramsey]

Yeah.

[Graham Stephan]

And so I'd rather just work the fast food job and get 20. Go for, you know. Yeah.

[Dave Ramsey]

But part of it is, but, but.

[Graham Stephan]

A lot of it too. Those fast food workers, I think are getting their hours cut because there's just, there's not enough profit there to be a supportive.

[Dave Ramsey]

Part I want to address is, as a business owner, what do you think you got to do to keep running this business and not go bankrupt? You have to increase your prices. If you don't increase prices and you've increased your cost of labor well, very quickly you're going to run out of money. And so that's what people aren't understanding is that if you increase the minimum wage, what happens is everything gets inflated because every business owner in America in that type of world is now going to have to increase their prices enough to pay that person that wage, which means everyone else is going to suffer. And by the way, the person working the minimum wage job also has to pay inflated prices. So now it's, we're just moving everything up. So now that your groceries cost, you know, 10% more because your wage went up 10% more. Yeah. And so it's really not doing as much as people think it is. I rather see people go, how do I get away from a $10 an hour job and go make 20 instead? What are the skills needed? What are the jobs out there? What are they requiring? How do I develop myself to get there?

[Graham Stephan]

Yeah. It's funny, we asked Kevin O'Leary the same question. We said, what should the minimum wage be? And his answer was at zero. Zero.

[Dave Ramsey]

I knew it. That is such a Kevin answer. Mr. Wonderful.

[Graham Stephan]

Whatever someone is Willing to take. That is the, that is the price.

[Dave Ramsey]

I mean, yeah. Where does it end if I'm going to pay a babysitter, do they go, well, minimum wage is 25 an hour now. So you got to pay 25 bucks an hour to watch my, you know, baby sleep through a monitor. So I just don't think it plays out in reality. And it's not because I want people to stay broke. It's because I want them to want better for themselves.

[Graham Stephan]

Now when it comes to taxes, do you think that there should be a flat tax or abolish the tax system and do an import tax?

[Dave Ramsey]

Whoa. I'm not as privy on the import tax. How would that work?

[Graham Stephan]

This is something that Trump proposed.

[Dave Ramsey]

Oh, the tariffs. So other countries send their stuff in here, we tax them. Wouldn't that just cause the prices we pay for all of that to get jacked up?

[Graham Stephan]

They're saying that the money you save would offset that. That.

[Dave Ramsey]

So imagine if I'm the other country, I'm going to just charge more for my thing to the US If I know I'm going to get taxed more, that's what I would.

[George Camel]

Yeah, but then fewer people would be buying, you know, products from other countries. I think his idea was just to get more companies in the US to be creating those products.

[Dave Ramsey]

Sure. And I'm all for that, but I don't know that the US can compete at a level to where it's going to make sense for me to buy a seventy dollar T shirt because it was made in the US So unless we can get our manufacturing to be competitive and to still keep profits here, it's always going to make more sense to get it cheaper outside of here. So I don't know if that, I don't think that's the solution. I would be for a flat tax though. I think that's a much more fair system. It still causes the wealthier to pay more because, you know, 10% of a million dollars is more than 10% of $100,000. And I do wonder what that would do for the economy. And it would avoid all of the back and forth of you're not paying your. If everyone pays 10%, we got, we got equality. We did it. We did it.

[Graham Stephan]

What's interesting is that Warren Buffett recently sold a big chunk of his stock and a lot of people recently were speculating, does he know something that the rest of us don't? Is he timing?

[Dave Ramsey]

Mark's about to impart.

[Graham Stephan]

Are we about to see a stock market crash? He came out and clarified, which I found really interesting, that the reason he sold wasn't because he thought that there was a stock market crash or that something was looming. It was because he wanted to lock in long term capital gains before a potential increase. Oh, how smart is that? And he did this, by the way, months before Kamala came out with her 28% capital gains.

[Dave Ramsey]

Because this has been looming proposal capital gains tax.

[Graham Stephan]

Right. Warren Buffett is so smart, I think he's thinking a few steps ahead of everyone else. Like Nicocado might be two steps ahead. Warren Buffett is three steps ahead.

[Dave Ramsey]

You got to respect that hustle.

[Graham Stephan]

The fact that he's selling makes me tend to think that he has an inclination of what's going to happen, which is that long term capital gains tax rates are probably going up and he's getting ahead of it now, locking in, you know, 20 to 23 point, you know, 24.3 or whatever it is after the investment tax.

[Dave Ramsey]

Yeah, well, on the. On the amount of money he has. Like, those numbers matter for the average American selling their stocks, which it doesn't even affect. Not a big deal to go from 24 to 28%, but when you're talking about hundreds of millions of dollars, it adds up.

[Graham Stephan]

Realistically, I think for most people, it's not going to make a difference. But if you're worth probably more than $10 million, you got to start looking at the tax rates and thinking, hey, do I want to lock this in now, guaranteed, or take a risk in the future?

[Dave Ramsey]

So you got to be thinking about this, Graham. If you're not Graham, keep scrolling. You gotta be thinking about this. What are you gonna do, Sell off some real estate?

[Graham Stephan]

No.

[Dave Ramsey]

Okay, you're hanging on.

[Graham Stephan]

I'm gonna hang on until it goes back.

[Dave Ramsey]

Does the election affect you too?

[Graham Stephan]

Yeah, I would say it does.

[Dave Ramsey]

In what ways?

[Graham Stephan]

Taxes, I would say, is probably the biggest one. If tax rates go up, it directly affects us probably the most.

[Dave Ramsey]

We talk an income tax or other types taxes.

[Graham Stephan]

Income taxes, Okay. I would say that that's it. It's not gonna be the end of the world. I mean, listen, if taxes go from 37 to 39.6, I don't care. I think that's probably the most realistic outcome of anything. It's probably that it's not the end of the world, but it is something.

[Dave Ramsey]

An extra 2% of your income getting taxed.

[Graham Stephan]

That's probably the worst case. Realistically, the capital gains could be iffy, going from 20 to 28%, but it depends. Also, if they cap it. Like, if income's over 10 million a year, it's not going to make a difference to me, but it will to somebody.

[Dave Ramsey]

Well, it's one of the reasons I'm a big fan of my Roth retirement accounts is just knowing ahead of time I paid whatever the tax rate was today for my income and not worrying about what my income will be in the future. So if I have a Roth 401K with 2 million bucks, that's $2 million of net money that I get to spend and enjoy without Uncle Sam getting his grubby hands on it. So that's my mentality around the Roth. And I don't want to think about, well, what if your income's lower in retirement? I'm like, what if it's more? What if I'm spending like crazy because we're having a good time? I don't want to be limited in that regard.

[Graham Stephan]

The only thing I worry about with those accounts, and it's doubtful that it'll happen, but they could always say, hey, we're changing the rules now. And now instead double taxed now, instead of 59 and a half now you got to be 65 to take it out. Or like little things like this. They could always say, well, I don't know how the weasel, you know. Yeah, I, I just have a feeling at some point someone's going to try to attack these accounts. Not to say that they'll be successful.

[Dave Ramsey]

At it, but there might be an American. We'll see if the world still exists by then, you know, that's probably smart. I just take one day at a time.

[Graham Stephan]

That's fair.

[Dave Ramsey]

I hope I get to see my daughter, you know, grow up and go to college, get married and do all the things. But at this point, fingers crossed, at 25, moving out at probably earlier than that. I moved out at 20. I moved from Boston to Mobile, Alabama, finished school. Did you guys live at home for a while beyond 18? No.

[George Camel]

I moved out as soon as I.

[Dave Ramsey]

Went to college, which was 18 years old or so.

[George Camel]

20.

[Dave Ramsey]

Okay. How about you, Graham?

[Graham Stephan]

Were you early 20s?

[Dave Ramsey]

Okay. And I think it worked out for all of us.

[George Camel]

Since you have a lot of hard takes with regard to finance of your financial beliefs, which ones do you have the least amount of conviction on? For example, for me, the numbers suggest it's better to pay with a credit card. Right. Because you get the cash back. However, I also understand that there's a psychological advantage to being debt free and how that, and how that increases the money at the end of the month. So I wouldn't say I have 100% conviction with regard to, you know, you should use credit cards. But I would recommend that people leverage smart debt. It'd probably be like an 80% conviction for friends to use credit cards.

[Dave Ramsey]

I think when it comes to investing, we've had we believe to be diversified across four different types of mutual funds in retirement. But a lot of people think I'm anti index funds. I'm a big fan of index funds and I think in a brokerage account that's where I would be parking. All my money is in these index funds. That's one. The other one I would say is if you called in and said I have a 30 year mortgage, it's a very reasonable amount of my income. I'm not going to yell at you. That's one that as far as convictions go, I don't think the 30 year mortgage is going to kill you. I don't think that's like a wealth killer in that regard. What it does to you psychologically is it gives you a longer time horizon to hang on to the debt which I think is what actually is hurting people. They say well I'll pay it off like a 15. They'll say I'll pay it off early. But the stats show they're not and that people with 15 year mortgages are paying them off early. In the millionaire study we did over 10,000 of them, we found the average millionaire paid off their home in 10 years. And so that tells me they don't hang on to their mortgages. But as far as 30 year versus 15, we have a pretty staunch like we're not going to yell at you. The only type of debt we don't yell at you FOR is a 15 year fixed rate mortgage where the payment is no more than a quarter of your take home pay. I still believe that that's still what I've done. It's what I would do in the future. It's what I recommend to everyone. But if you called in and you already had a 30 year, I think there's worse things you could do financially as long as you have a goal to pay that off. Credit cards, I still, I'm still convicted that they are. The entire industry is scum. They are meant to screw people over and that 99.9% of people don't have the psychological and financial wherewithal to play the game perfectly, to truly win. I still think you're going to spend more on the card. I don't think the rewards are worth It. And I think people like Graham can gamify it because they have an astounding income in an astounding amount of frugality that he can actually. He might be the guy. So you think it is possible if you're Graham? If you're not Graham? It's not.

[Graham Stephan]

What about Jack?

[Dave Ramsey]

Jack? I think he has a tendency toward hedonism. You know, the man likes things, and I think so more than Graham. I think if you're comparing the two.

[Graham Stephan]

I think I like things more than Jack.

[Dave Ramsey]

But you're unwilling to pay for said things. I like things if it was gifted to you or you can find a way to get it for free or cheap. So I. But I don't think you're the. You're not the target demo. You. You are the guy who is truly, quote, unquote, beating the system. But I don't think that's possible for almost anyone. You have to have an incredibly high income with an incredible amount of discipline and frugality to actually make that work.

[Graham Stephan]

What if you just have the discipline and frugality? You don't have a high income, but you. But you are so disciplined down to the penny.

[Dave Ramsey]

Could I still have become a millionaire if I used my credit card and paid it off perfectly and got some rewards? Probably. But I think it was actually beneficial for me to use my own money and make different decisions financially. I think I spent a lot less using my own money over the last 10 years than if I had used my credit card and got 2% cash back or got a free flight. Because the truth is I would have chosen a different flight. I would have chosen a different airline versus trying to utilize the points to redeem them like it's Chuck E. Cheese. I just think you make different decisions and it's. It's not apples to apples, let's just say.

[George Camel]

Not to beat a dead horse. Let's just say that you are debating yourself about credit cards. Okay, so you're going up against George Camel.

[Dave Ramsey]

That's an unbeatable match.

[George Camel]

Right, but what would you say if you're really trying to put your best argument forward about being pro credit card?

[Dave Ramsey]

If I had to debate myself, George is across from me and I'm the devil's advocate going, but George, say I'm George Camel. I would probably say get a secured credit card to where you cannot spend more than you actually have and still stick to your budget and look at the budget before you make any purchase ever. And then and only then do you use that card. Is that you know you're still sticking within your budget and you can't spend more than you make and have everything on autopay. And even then, I would still find a way to screw that up. Another George would be like, see? Told you so. I still think if you put him neck and neck, you put both Georges in a race to wealth. I think debit card George would win every single time. I think he has a very different mindset than the other George who is trying to play a game that was set up before him. You know what I mean? Like, I'm not. You're not running your own race if you're playing the credit card company game game. I don't. You can't be focused on two things at once. You can't be focused on, I'm trying to get out of debt and build wealth, and I'm trying to get my 2% so I can have a nice thing.

[Graham Stephan]

How much more do people spend on credit than debit?

[Dave Ramsey]

Just overall, we've seen a lot of studies. It ranges from 10% more to 100% more, depending on the study you look at. And for every singular person, it's going to differ greatly depending on their income, their habits, where they're spending, are they playing the games of the cash back, the points, all of that.

[Graham Stephan]

I've always been so curious how they account for some of the variables of the people who have credit because they need credit and carry a balance, and therefore they. They are more prone to overspending in general than the person who is financially responsible using a credit card.

[Dave Ramsey]

I just think in Today's world, like 30 years ago, you could probably get away with it for 20 years ago. I think in today's world, with how aggressive the marketing is, with how dialed in all the digital marketing is, there is no way that humans can truly counteract overspending over time. That's super difficult. And that's why I love the debit card. I love the budget.

[Graham Stephan]

Got something I want to mention.

[Dave Ramsey]

Okay.

[Graham Stephan]

It was really smart for credit card companies. The tap to pay.

[Dave Ramsey]

Tap to pay.

[Graham Stephan]

Oh, my frick.

[Dave Ramsey]

Skinless.

[Graham Stephan]

You know, you don't even have to swipe. You know that they just did so many studies and realized that it's less painful just to bleep than to stick your card in there and press buttons. And I noticed this the other day of how easy it was when Macy got that drink. And I.

[Dave Ramsey]

How much was the drink?

[Graham Stephan]

You don't want to know.

[Dave Ramsey]

Was it more than $25 a tip?

[Graham Stephan]

Stupid.

[George Camel]

Graham was livid.

[Graham Stephan]

Livid okay, so, in fact, this is so stupid.

[Dave Ramsey]

I thought it was gonna come up in marriage counseling.

[Graham Stephan]

I thought it was an. No, it's not Macy's fault. I thought it was an open bar. And so she's like, oh, you know, I should get to drink. I'm like, yeah, you know what? Okay, just get one. Gets to the thing, and then I look over and I see the person next to me getting something similar, and they turn that thing around. I was like, I thought it was an open bar. And sure enough, it comes, you know, and I. And I pay. But just a little bleep. It just in that moment, it made me think that was a lot less painful than sticking the card in or swiping. There's something about the tapping that is a lot more comforting to me. And I could see in that instance how tap to pay does not feel like money. It just feels like.

[Dave Ramsey]

And to be fair, it really. Debit cards have the feature, too. And I think debit cards, there's a similar psychological ease. But the difference is, you know, that's your own money. When I spend on a debit card and that bank transaction immediately comes through to text, I know that just left my bank account. And yeah, we are not $1.2 trillion in debit card debt. We're $1.2 trillion in credit card debt. And so you can't compare apples to apples and go, well, I spend the same, if I would, on a credit card. The credit card has this whole portal to hell that can be unlocked at any moment. So you. So should you choose personally?

[Graham Stephan]

Yeah, I just think the credit card companies understood that inserting a card or swiping people now associate with charging money and a tap to pay is new. And we don't have that same connection. I think in 20 years from now, people are going to have a connection with that, and then it's going to turn into like a hand wave. Like we're going to have a little implant in our.

[Dave Ramsey]

At Whole Foods, they have the Amazon palm reader, and that's how you pay.

[Graham Stephan]

You know what they'll do? Got it. This is what they're going to do. They have facial recognition like they do at the airport.

[Dave Ramsey]

That's all you need.

[Graham Stephan]

I'm excited about this because I came up with the new thing. Guaranteed they're going to use this jack. Guaranteed.

[Dave Ramsey]

What if you have sunglasses?

[Graham Stephan]

Facial recognition, that's so good now that you're going to have your face linked with a credit card, and all you have to do is make eye contact with the camera or something like that.

[Dave Ramsey]

Or just look, grab and go. Yeah, well you've seen those answer the airports where it's just, they know they have all the seniors like they charge.

[Graham Stephan]

Me once for passports. You just scan your face now, it's all there. Oh yeah, you're going to do that with payments. You're going to be able to link your payment with your face, show your face.

[Dave Ramsey]

Well, Apple Pay's tagline is cashless made effortless. They know that the more convenient, the less effort we have to put in, the easier it is to spend. And that is the argument. I mean it's just a further argument than from cash and debit to credit.

[Graham Stephan]

Card, the Amazon grocery store where you just go and you just pick it and it just debits from your account. You're going to have one master account. Everyone in the United States is going to have it scanned with your face fingerprint.

[Dave Ramsey]

It's that easy. And you can't argue that spending someone else's money and getting to pay it back later is not easier and more of a win psychologically than seeing your own money leave you now, whether it's cash or debit. So that's really the, at the end of the day that's the stance on top of the scum. And I break down in the book, I talked to an ex Capital One manager who said we run 10,000 experiments on consumers a year to get them to spend more, to get them hooked on our points games and to gamify it all. And that was enough for me. I went no thank you. And for those reasons I'm out.

[George Camel]

What's a piece of non financial advice? If you could bestow this on all of the viewers right now to improve the quality of their life, what would it be?

[Dave Ramsey]

Oh my goodness. I would say make it a habit to put down your cynicism every day you wake up and that might mean not looking at the headlines, it might mean doing the hard thing you know is going to make you feel better. What I found as a recovering cynic, a recovering pessimist, is that it was so easy to look at the world through this filter of man, this world is screwed up and I gotta man, they really need to do something about this. Instead to lead with a level of optimism and hope that is not unhinged but is actually authentic where it's going. I know full well the world is broken and it's got its problems and I don't feel good and I gotta go to work. But instead look at everything as an opportunity. What what is? My dad works in B2B marketing.

[Graham Stephan]

He came by my school for career.

[Dave Ramsey]

Day and said he was a big roas man.

[Graham Stephan]

Then he told everyone how much he.

[Dave Ramsey]

Loved calculating his return on ad spend. My friends still laugh at me to this day. Not everyone gets B2B but with LinkedIn.

[George Camel]

You'Ll be able to reach people who do.

[Dave Ramsey]

Get a hundred dollar credit on your next ad campaign.

[George Camel]

Go to LinkedIn.com campaign to claim your credit.

[Dave Ramsey]

That's LinkedIn.com campaign terms and conditions apply.

[Graham Stephan]

LinkedIn.

[George Camel]

The place to be, to be.

[Dave Ramsey]

The opportunity here. And what is my part to play? Because you're right. If you try to take on the world at once, it will crush you like a bug. But if you just go, hey, what's a kind thing I can do today? How can I get just a little bit better today at my job? How can I be kind to someone who maybe doesn't even deserve it? Not because it's going to do something for them, because of what it's going to do for me. And I found the more I sort of displaced the poison and toxicity and the more I replaced that with hope and optimism, the better quality of life I had. And I actually end the book with a chapter talking about hope versus cynicism because I think that's what personal finance comes down to. Do you believe it's possible to go to where you want to go? If you don't, why would you do it? If you think you can or you think you can't, you're right. Henry Ford said that. And so I think at some point you have to choose every single day. It's not a button you can. I wish I was as optimistic as Jack. He's just an optimistic guy. I don't have. I'm like Graham. We're very, we're very like skeptical of everything. Like. And I think the more I live my life a little more open, a little more kind and a little more optimistic, the better my life is. So that would be my non piece of financial advice.

[Graham Stephan]

Cool. Thank you so much.

[Dave Ramsey]

Thank you guys.

[Graham Stephan]

Thank you very much for.

[Dave Ramsey]

I learn a lot when I'm with you and I feel like I grow personally and I appreciate your friendship over the years.

[Graham Stephan]

Thank you. That really means a lot. We'll link to all of your information too, down below in the description, including the book.

[George Camel]

Guys, check it out.

[Dave Ramsey]

Get the book. Even if it just is to rile you up. A hate read. If you.

[Graham Stephan]

Cool.

[Dave Ramsey]

Thanks.

[Graham Stephan]

Till next time.