I Lost All Of My Brother's Money In A Scam

Summary

Podcast Summary: The Ramsey Show Highlights

Episode: "I Lost All Of My Brother's Money In A Scam"
Date: October 16, 2025
Host(s): Dave Ramsey, George Kamel
Guest Caller: Kathy

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Episode Overview

This episode features a heartfelt and sobering call from Kathy, a 68-year-old retiree who lost her life savings—and her brother’s money—in an elaborate online scam. Kathy shares her emotional journey, the financial devastation she’s facing, and asks for guidance on how to rebuild. Dave Ramsey and George Kamel offer empathy, tough love, and practical advice for Kathy as she grapples with the loss and looks for a path forward.

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Key Discussion Points and Insights

Kathy's Story: The Financial and Emotional Toll

• Investment Scam & Losses:

  • Kathy invested her entire 401k, pension, and borrowed $50,000 from her brother in an online investment group, which turned out to be a scam. Her total loss: $487,000. Her brother lost $160,000 (including the money she borrowed).
  • Quote:
    • Kathy: “I took out all my 401k and pension and last month they ghosted us and froze our accounts and we lost it all.” [00:17]

• Current Financial Situation:

  • Owes $33,000 (American Express loan + small debts)
  • Receives $2000/month in Social Security; has no other retirement funds.
  • Lives in a paid-off house in Texas; estimates its value between $375,000–$425,000, but it needs repairs.
  • Her monthly expenses essentially total her Social Security income.

• Brother’s Loss & Family Tension:

  • Brother wants his money back; Kathy promised to pay $500/month, but can no longer do so.
  • Quote—Dave Ramsey:
    • “The promises are over. I mean, you don’t have money... You both got screwed in this, and so you just simply don’t have the money to pay him back.” [03:33–03:38]

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Emotional Impact and Support

• Kathy’s Emotional State:

  • She expresses feelings of being “lost” and overwhelmed, especially as she feels responsible for her brother’s losses.

  • Dave and George empathize deeply, acknowledging the trauma and shame of financial betrayal.

  • Quote—George Kamel:

    • “Not only good lost, I’m guessing you’re just emotionally stunned... I’m so sorry.” [00:59–01:04]

Options Considered and Ramsey Advice

• Bankruptcy?

  • The panel advises against bankruptcy, as her total unsecured debt ($33K) is relatively small compared to her assets; losing her retirement doesn’t make bankruptcy worthwhile.
  • Quote—Dave Ramsey:
    • “Bankruptcy. It will clear the American Express debt, but I don’t think it’s worth bankruptcy over this. Because you lost your retirement money, you’re not going to get that back.” [02:56]

• Reverse Mortgage?

  • Strongly discouraged; Dave calls reverse mortgages “a terrible, horrible financial product” that “prey on desperate people like our friend Kathy.” [07:14]
  • Kathy’s home isn’t in good enough condition to qualify anyway.

• Selling the House?

  • Dave advises not selling immediately; suggests using it as a safety net:
    “Try to stay afloat, try to get a job. There’s a worst-case scenario here where five years from now...you could sell the house, downsize, and invest the difference to try to create a little bit of a nest egg.” [06:50]

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Concrete Steps Forward

1. Immediate Survival:

• Live within means using Social Security ($2000/month covers basic expenses)
• Do not pay brother back at this time; basic needs take priority
• Avoid further debt or risky financial products (e.g., reverse mortgage, bankruptcy)

2. Income and Employment:

• Find work, even if beneath previous experience or outside comfort zone (retail, Starbucks, Walmart, Target)
• Seek health insurance and benefits through employment where possible
• Quote—George Kamel:
  • "One of the best things you can do is get to work...You’re going to have to take some opportunities that you wouldn’t normally think about." [04:53]
• Encourage sharing her story widely with her network to uncover job opportunities and support; don’t isolate.
  • “We cannot, Kathy, do this on our own...you need some kind souls to go, ‘I’m going to help Kathy and I’m going to give Kathy a job.’” [05:42–06:14]

3. Long-Term Plan:

• If work or income is no longer possible down the road, consider downsizing and investing home equity for some income

4. Legal and Practical Recourse:

• Kathy has reported the scam to the FBI and appropriate agencies, but the hosts caution that recovery is unlikely.

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Notable Quotes & Memorable Moments

• On Facing the Loss:

  • “The future you had, the retirement you dreamed of, it’s not going to be the same. So you’ve got to grieve what was and just create a realistic picture of what comes next.” —Dave Ramsey [08:08]

• On Asking for Help:

  • “Tell everybody your story...It is a thing that is going to be difficult because you’re ashamed and I understand that. But you aren’t the only person who has been duped before.” —Dave Ramsey [05:24–05:42]

• On Family Obligation:

  • “You just simply don’t have the money to pay him back...He knew full well he might never see it again.” —Dave Ramsey [03:33–04:04]

• On Avoiding Desperation Traps:

  • “No, I mean [reverse mortgage companies] will just screw you with all the fees, you’re going to lose all the equity in your home. It’s a terrible, horrible financial product.” —Dave Ramsey [07:14]

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Key Timestamps

• 00:06 – Kathy’s introductory story of the scam, losses, and brother’s involvement
• 01:09–01:21 – Kathy's attempts to report the scam to authorities
• 01:39–02:20 – Discussion of Kathy’s work prospects and situation
• 02:56–03:44 – Advice on bankruptcy and handling brother’s financial expectations
• 04:53–06:14 – Advice on returning to work and seeking community support
• 06:29–07:50 – Discussion of the home’s value, reverse mortgages, and potential sale
• 08:08 – Closing remarks on grief and realistic next steps

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Tone and Language

Throughout the conversation, Dave Ramsey and George Kamel maintain their signature tone: empathetic, direct, informative, and solution-focused. Kathy’s vulnerability is met with both compassion and practical advice, underscoring the importance of resilience, support networks, and facing hard truths after financial trauma.

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Transcript

[Dave Ramsey]

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[Kathy]

I'm 68 years old and 6 months ago I got involved with an online investment group. I eventually borrowed $50,000 from my brother. He invested 110. I retired from my company. I took out all my 401k and pension and last month they ghosted us and froze our accounts and we lost it all. I lost 487,000. My brother lost the 50 I borrowed and the 110 he invested and my brother would like his money.

[George]

Oh boy.

[Kathy]

And, and I have houses paid off. I live in Texas, so I have a homestead on it. I have a $30,000 loan from American Express. So I'm wondering, do I file bankruptcy, do. I tried to get a reverse mortgage, but my house, my husband died, so my house is not and in good enough condition. I'm just lost, okay?

[George]

Oh, absolutely. Not only good lost, I'm guessing you're just emotionally stunned. You know, that's, that's an unbelievable. Yeah. I'm so sorry.

[Dave Ramsey]

Is this scam still out there?

[Kathy]

It probably is. I filed with, you know, FBI and all the agencies, but they didn't have a whole lot of hope for me.

[Dave Ramsey]

Yeah, it's rare that in these situations you get your money back. So how much debt total do you have right now? You said you have 30k on an American Express card, right?

[Kathy]

That was a loan. The other two are 2,000, maybe 3,000 total. So 33,000.

[George]

So 33,000. And I know you retired recently.

[Kathy]

Yes.

[George]

What does the future look like as far as work? Because that's. We absolutely have to consider that right now.

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[George]

What is the future look like as far as work? Because that's. We absolutely have to consider that right now.

[Kathy]

Oh, I know I've been applying, but I'm. Like I said, I'm 68. I've had my job for 36 years. I did sales, so I can do that. But I'm you know, how long have.

[George]

You been out of the workforce?

[Kathy]

Since May. End of May.

[George]

What about your past company. And we called them up and told them what's going on.

[Kathy]

My job. Once you quit, you're gone. I'm easily replaceable.

[George]

Okay.

[Dave Ramsey]

Wow. Well, bankruptcy. It will clear the American Express debt, but I don't think it's worth bankruptcy over this. Because you lost your retirement money, you're not going to get that back. And the pension as well. So you took the pension out as a lump sum, used that in the investment course, took, Cashed out every dime of your retirement and threw it into this course.

[Kathy]

Correct. All I have is $2,000 a month. Social Security.

[George]

Now, what is your Social Security?

[Kathy]

2,000. I make 2,000amonth.

[George]

And then what was the other thing you were about to mention? 500.

[Kathy]

Something I promised my brother $500 a month.

[Dave Ramsey]

Well, the promises are over. I mean, you don't have money.

[George]

Sorry. Brother's on his own.

[Dave Ramsey]

You both got screwed in this, and so you just simply don't have the money to pay him back.

[Kathy]

Okay.

[George]

I mean, he got you into this, if I heard you correctly.

[Kathy]

No, I got him. And.

[George]

Okay. It doesn't matter.

[Kathy]

Due diligence.

[George]

It doesn't matter. That was just me kind of being on Team Kathy, so I misunderstood. But, no, you can't take care of brother. Brother's got to take care of himself. You both. You both made a poor decision, and now we got to figure out you.

[Dave Ramsey]

Were what the bank would call a risky borrower. And so you borrowed this money. And he knew full well he might never see it again.

[Kathy]

He had faith in me, and I've never disappointed him before.

[Dave Ramsey]

Well, I hope you can pay him back one day, but it's not today. You're not going to be making him payments because you got to put food on the table.

[George]

Can you live off of 2000amonth?

[Kathy]

My. My bills really are $800 a month plus food, and then my homeowner's insurance. And.

[Dave Ramsey]

So all in. What does it take to run your house for a month? Include food, include HOA. Every single little thing.

[Kathy]

Pretty much 2000.

[George]

Okay.

[Dave Ramsey]

Okay. So you're just gonna hopefully survive, and that's where getting a job is gonna come into play.

[George]

Listen, I'm gonna tell you, I'm gonna jump in real quick on the job thing, because I think coming off of something this emotionally difficult, one of the best things you can do is get to work. Now, I understand that you have been applying, but I think you're going to have to take some opportunities that you wouldn't normally think about. Now I mean that's maybe Starbucks, Walmart, Target. I mean you're functional, you're a former salesperson. We need income and if we can get some benefits out of that. So I mean you're, you're doing everything you can and your number one goal right now is tell everybody your story. Now this is very difficult. I understand what I'm saying. I completely understand what I'm asking you to do, which is to share your story. It is a thing that is going to be difficult because you're ashamed and I understand that. But you aren't the only person who has been duped before and I think a 60 year old lady who's a good person who has lived her life well, this is where we can't do this on our own. We cannot, Kathy, do this on our own. I mean we. No advice that George and I will give you is going to alleviate that fact. This is the time to go. Everybody I know, here's my story, here's what's going on and, and this is what I got to do. And I think that there's nothing wrong with that because you need some kind souls to go. I'm going to help Kathy and I'm going to give Kathy a job. That's what has to happen right now.

[Dave Ramsey]

What is your house worth?

[Kathy]

Probably 350 for a flipper. It's on paper.

[Dave Ramsey]

What do you mean for a flipper?

[Kathy]

You know, if somebody came in and wanted to flip it and make some quick money.

[Dave Ramsey]

I'm saying if you listed it on the MLS, on the market with a real estate agent, what could you get for it?

[Kathy]

Well, I asked and they said 375 to 425.

[Dave Ramsey]

Okay, so your house is worth about $400,000. I would keep it for now, try to stay afloat, try to get a job. And there's a worst case scenario here where five years from now, if you're out of options, you're unable to work for some reason, you could sell the house, downsize and invest the difference to try to create a little bit of a nest egg.

[Kathy]

Well, that was why I was going to do the reverse mortgage route.

[Dave Ramsey]

No, I mean they will just screw you with all the fees, you're going to lose all the equity in your home. You know, it's a terrible, horrible financial product and they prey on desperate people like our friend Kathy to try to get them into these.

[George]

Kathy, I'm going to ask a question to George on your behalf very quickly, George, I agree with what you said about the house, but I'm sitting here going, if I'm in her shoes at 68, I wonder if it's not a. Is it a feasible idea to not sell the house now and take the entire proceeds and get that back in the retirement accounts to try to grow over the next five years? As you said that, I just. What do you. What are your thoughts?

[Dave Ramsey]

Yeah, I mean, that was my, my initial thought was, could we just liquidate the house, invest every penny of it and live off of the growth? There is risk there because we don't know what the market's going to.

[George]

I don't want her to live off of it.

[Dave Ramsey]

We don't know how long it'll last. So that's why I want to see right now, can we create enough income and then use that place, play that card later on down the road when necessary, instead of just going to that route and then not working at all? Right. That's my fear. So. Kathy, I'm so sorry you're going through this. I wish I had a magic wand and can just get these scammers to give you your money back. But the relationship with your brother, it's not going to be the same. The future you had, the retirement you dreamed of, it's not going to be the same. So you've got to grieve what was and just create a realistic picture of what comes next. Create your free every dollar budget today, the simplest way to budget for your life.