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The Ramsey Show

Compound Interest Can Save You Millions (Hour 2)

30 Jun 2023

Transcription

Transcript generated automatically by AI and may contain errors.

Chapter 1: What should I do with savings when facing large medical expenses?

30.592 - 48.364 George Campbell

Live from the headquarters of Ramsey Solutions, broadcasting from the Pods Moving and Storage Studio, it's The Ramsey Show, where we help people build wealth, do work that they love, and create amazing relationships. I'm Ramsey Personality, George Campbell. Joined this hour by Ken Coleman, host of The Ken Coleman Show.

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48.344 - 65.274 George Campbell

And we're here for you, America, to help you take the right next step with your work life and with your money life. The number to call is 888-825-5225. That's 888-825-5225. Alfonso kicks us off in D.C. Alfonso, welcome.

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66.536 - 68.38 Alfonso (caller)

Hello, gentlemen. Thank you so much for having me.

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68.58 - 69.762 George Campbell

Sure. How can we help?

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70.838 - 81.784 Alfonso (caller)

Well, first, I just want to give a quick shout out to the man who's not here. Great pleasure to talk to you guys. But I am a bleeding heart liberal who thinks Dave Ramsey is a great American hero and just want to shout out.

Chapter 2: Is moving in with family a smart financial decision?

81.804 - 86.535 Ken Coleman

We'd love to hear that. Hold on a second. Did you say you're a bleeding heart liberal?

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87.089 - 92.015 Alfonso (caller)

I am a tax-rich liberal that thinks Dave Ramsey is the greatest American hero when it comes to finance.

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92.035 - 96.802 Ken Coleman

That is fantastic. I thought that's what you said. Okay. Wow.

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97.202 - 104.331 Alfonso (caller)

I got to tell you. I will pass that on. I'll just throw one more thing out there. I got a great business idea I want to connect with Dave about. But anyway.

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104.351 - 105.833 Ken Coleman

Yeah, well, that's not going to happen.

105.913 - 106.714 Alfonso (caller)

But anyway.

Chapter 3: When is it beneficial to downsize your home?

106.774 - 109.838 George Campbell

Hey, Ken has a lot of them, too, and Dave shuts those down.

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109.858 - 129.226 Alfonso (caller)

Yeah, you should hear my ideas. Well, anyway, to my question, gentlemen, thank you so much for having me. My family really does appreciate both of you as well. And you taught my children a lot about financial responsibility. We're very grateful for it. So my mother is 80 plus years old. My dad owned a business and struggled towards the end.

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129.286 - 147.411 Alfonso (caller)

And thankfully, there was a real estate property we were able to sell. And my mom has about $500,000. uh, in cash assets, which is the majority of her assets. We have a high interest savings account because she's battling cancer and we just don't know, uh, what needs she's going to have.

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147.611 - 165.156 Alfonso (caller)

I have some family members putting pressure on me to invest that thinking that, you know, the market's on an upswing and there's a view out there that's going to keep doing that. My view is with the health challenge that not, not knowing where that's going to go, it's safest bet to keep it in a online high interest savings account. Would love your advice, gentlemen.

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Chapter 4: What is the power of compound interest?

165.71 - 173.26 George Campbell

That is a great question. I'm so sorry to hear about your mom. That's tough. What has been the kind of prognosis, diagnosis? Do we know anything?

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174.381 - 179.167 Alfonso (caller)

Yeah. We don't know if it's in one year, five years, eight years, but it is terminal.

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179.588 - 188.319 George Campbell

Okay. So to your question, 500 grand, is this all FDIC insured? Is it across two accounts or is there a joint folks on the account to keep it safe?

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188.419 - 191.963 Alfonso (caller)

It's across multiple accounts. Okay. It's all FDIC insured.

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192.104 - 195.548 George Campbell

Okay, great. And I'm sure the interest rate on that is about, what, 4% or so right now?

Chapter 5: Why shouldn't I use high-yield savings to out-earn debt interest?

195.848 - 198.512 Alfonso (caller)

It's actually 5.4 right now.

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198.833 - 205.904 George Campbell

Amazing. Okay. Yeah. So the question of should I invest this money, we know that we may need this money in the next few years.

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206.725 - 207.226 Frank (caller)

Exactly.

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207.607 - 226.227 George Campbell

And therefore, I'm with you on this in that the family's going, hey, we should invest this. This is not a money-making scheme right now. We're not trying to retire off of this money. We want to make sure that we have it liquid to help mom and cover any related costs that come our way. And as you know, the cost can be astronomical as you get to end-of-life care.

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226.948 - 237.097 George Campbell

And so I want to keep that money accessible to protect our family from the other wealth that we're trying to build. All right. So I think you're doing the right things, man. I'm so sorry you're dealing with this.

Chapter 6: How can I negotiate a settlement for past due debt?

237.137 - 237.938 George Campbell

How old are you?

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238.795 - 243.205 Alfonso (caller)

Uh, I am going to turn 40, uh, late forties, let's say.

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243.285 - 262.248 George Campbell

Okay, man. Well, I cannot imagine going through something like that. You sound like you're in good spirits and you're a great son for thinking about this stuff and calling in with the question. But I would definitely not be investing this money right now. And if it turns out that you could have made another 3% if you had invested in the stock market, big whoop.

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262.708 - 274.101 George Campbell

I want to sleep well at night knowing that my mom is taken care of and we've got the funds to take care of her. So that's my take. Take it or leave it. Lindsay's up next in NYC. Lindsay, welcome to the show.

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275.836 - 279.396

Hi, I am thankful you guys took my call. Thanks.

279.416 - 279.577 George Campbell

Sure.

Chapter 7: What are the risks of investing money during uncertain times?

279.939 - 281.307 George Campbell

What's going on?

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281.911 - 306.822

Yeah. So, um, my husband and I have been married for a few years and, um, we found out recently that the only way that we're going to, uh, probably be able to like have a kid is through IVF, which is incredibly expensive. And we've been saving up money for a house cause you know, New York city is so expensive. Um, and so we got a little bit saved, but it feels like the expenses here are so much.

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306.802 - 336.188

It's so hard to get ahead. And so that IVF treatment, if it does work, you know, multiple rounds, lots of money. So we are like, okay, that takes out our whole saving for the house specifically. So we were like talking with my parents about it. And my grandmother passed away recently, and they used to have an apartment in their home that she used to stay in. And so that apartment is free.

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336.328 - 353.749

And they said, well, we would love for you to come and live with us for free. But they live in the middle of nowhere. Like, absolutely, like, no jobs, basically, except unless you want to work at, like, you know, the gas station.

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353.769 - 355.411 George Campbell

It's like a Dollar General situation.

Chapter 8: How can I effectively manage my finances during a health crisis?

356.412 - 377.414

Exactly. That's the big company out there. Okay. Exactly. And so we both work remote and we work in tech. But what if one of us, you know, gets laid off because of all these layoffs that happen? And so I'm kind of thinking about Okay, if we did, then we're not in New York City. We don't have, you know, that ability to kind of get another job quickly. So there's like give and take.

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377.434 - 380.8

We'd have free rent. We'd have everything there, but would it really get us ahead?

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381.101 - 383.586 Ken Coleman

Well, Lindsay, what do you do in tech, you and your husband?

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384.528 - 397.536

Yeah, so I am in operations, and so I make like one-third a year, and then my husband is in sales, and he makes about 60 before his, yeah.

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397.756 - 402.747 Ken Coleman

So here's the deal. I am in no way saying that you need to move to, you know, the middle of nowhere.

402.787 - 403.228

Mm-hmm.

403.208 - 417.321 Ken Coleman

But what changed for me was the fact that you're both remote and in tech. And I will tell you that because I focus on work issues all the time, I give a lot of work news updates on The Ken Coleman Show.

417.421 - 435.88 Ken Coleman

And I will tell you that we're seeing over the last year when there have been some of the larger big tech companies that have laid people off, that those tech workers are getting new jobs within a month. The tech industry is still hot, hot, hot. And so I don't think that's something you need to be afraid of.

436.24 - 460.346 Ken Coleman

And I don't think you need to be in New York City to get a tech job, especially if you're remote. So that does not mean that I think you need to move to the middle of nowhere. However, if your housing cost is the number one strap that's cash strapping you guys to be able to cash flow IVF, I'm absolutely moving. to a different place, a different locale, where we can do our jobs.

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