"For someone in an organization that isn't willing to accept a 2% interest rate loan on a 30-year fixed rate mortgage because that's considered too much risk, I don't think a 50% risk is considered acceptable." Extremely cogent point by Caleb, I'm surprised the editors kept that in. Dave needs to realize his extremely high withdrawal rate recommendations will literally lead to seniors running out of money in retirement.
Question was great. George did an excellent job wiggling off the hook. For all the good content on Ramsey it does seem odd to push 7 or 8 percent withdrawal rates
Well George had his hand publicly and very firmly slapped by Dave for once recommending the 4% rule to someone. So it seems he has learned to step in rank.
I'm extremely tired of seeing these comments where people fixate on this. Firstly, George gave the wrong answer he should have said "depends if your average growth is 9% or not" because that's the portfolio growth that Dave Ramsey TEACHES his students to accept in their mutual funds retirement accounts, and he says to pick different funds of different risk types until you reach a 9 to 11% growth on average.
@@steven9red The whole problem is there are 5,10,15 year time periods in the market, where due to sequence of returns risk, you would've lost all your money withdrawing 5%+/yr -- even though over the long term the average would be 10% per year. Literally just run a simulation following Dave's advice, invested in his identical mutual funds, and see what would've happened to your money with these withdrawal rates had you retired in 1999 or 2000. Hint: You would run out of money within 15 years or less.
Someone needs to. It’s just sad that all these Ramsey personalities can’t speak out because Dave has them by the you know what’s.. everything they say has to be in alignment with Dave. I’m sure many don’t agree on certain points but never speak their mind even on their own channels.
I hope George can get to the point where he can openly speak different opinions from Dave and be fine if he gets canned. I like him as a financial personality but you can tell he's on a short leash.
I think thats part of the reason why Anthony Oneal left the Ramsey Network to start his own channel. He still preaches the core values, but can be more open and honest on his opinions and also focus more heavily on the audience he personally wants to reach
@@larrysmith2655 So that doent happen at your work? lol. You dont have to tow the company line? Its not just Dave lol lol. BUT you can hate if you like
@@DoobieKeebler-zz1mnhe financed at 0% for 6 months then paid it in full. Caleb isn’t a Ramsey-never-have-debt-type. If you can handle it, he’s totally okay with you having debt as long as you’re not paying crazy high interest rates. Not sure what your argument is.
Did you really have to do him like that 😂 Trying to get my man fired 😂😂😂 (Actually trying to chip away at a hard stance I know), you freaking loved that squirming you 😏
Out of all of Dave's advice. This withdrawal rate I have seen him take more flak from other financial advisors more than any other. It is too high, and they run the numbers to prove it is too high.
One of my biggest complaints with Dave Ramsey has always been “it’s Dave’s way, there’s no other way”. I like these segments where you openly debate different view point. 👍
To be fair, the Ramsey way works really well for folks who aren't at least at his Step 4. Past that, it's a good way to go, but there are a lot of other viable approaches.
@@jasondima1411 Caveat: Ramsey's fondness for managed mutual funds is not optimal, and advocating an 8% withdrawal rate in retirement is risky. Unmanaged index funds are objectively superior to managed mutual funds, and 4% withdrawal is a far safer planning factor.
The Ramsey way has been the same for 30 years. And hasn’t changed in 30 years. That’s why. Do people do their own thing? Of course. But it teaches and instills responsibility and accountability
I believe his methods are effective for individuals with limited financial literacy and poor self-control. They may not always be ideal, but they work well for the majority of people.
George: "7% withdrawal rates make sense for people with 7 million dollars in their nest egg" Caleb: *runs simulation to show the risk* George: "Well nobody would do that in real life anyways" So then why was that the example used by George in the first place? Comes off as incredibly disingenuous
Yep, and the rate of return is highly dependent on the success or failure during first few years. If you take out 7% the first couple years and the market is down bad during that time, it will drastically kill your overall return even if the market sees ups again
George got taken to school, I want Dave to have this talk, watch how fast he starts yelling and saying he's been doing it twice as long as you been alive, it's out of date, update the plan Ramsey team
Nah George is bending around backwards to defend Dave even when Dave is wrong about the 7% withdrawal rate. 4% is the safe amount where you maintain your wealth for your children. The reason Dave says a high withdrawal rate is to arbitrarily give hope to someone retiring with $1million who knows they can’t get by on $40k
Not saying either way is "wrong", but I think Dave believes you should set your children up for personal success so they're not waiting on your inheritance.
@@sumerianbotfarm nah it’s wrong to pull out 7% and drain your savings if you don’t have to. Dave likes to say 1 solution for everyone and stick to it. If you have $1 million dollars at 70 years old, yeah you should withdraw at 7%. If you have $7 million at 60 years old, you should withdraw at 4%
Feel bad for George. His initial video was right, the data says 4%. But he has to give bad advice now because his boss is too arrogant to admit he is wrong on this point. Even Rachel agrees with George. They need to have an intervention with Dave before people blow up their retirement accounts!
@richardfederico9461 things in finances change over the decades, Dave is still doing the same thing as he was 20 years ago which don't worn in our world today and he's to stubborn to change
@@mapko15 they worked 300 years ago and still do today. Nothing has changed about living on less than you make, sacrificing and saving for a rainy day. Not being willing to sacrifice is as old as this country
I don't understand what all the fuss is about. If you maintain 18 months living expenses in cash, turn off dividend reinvestment, and don't sell off capital during market downturns, then you can probably actually average 7-8%
@Bobventk , in his defense.. the assumptions they put into these models are dumb. They are designed by investment advisors and fund managers to scare people into investing more than they need to for longer. If you have any sort of intelligence, you will change your habits if needed to come out of downturn in the market better. It's not hard to shift your investments to make good returns in a downturn.
Well ya, he got his ass reamed by Dave for claiming 4% is safe and no doubt is now contractual obligated to shill the 7-8% garbage. He doesn't agree with it, so it's hard for him to formulate a defense for what he knows is wrong.
Caleb is right on the withdrawal rate issue. Dave was emphatic not long ago that 8% is perfectly sustainable. Caleb is showing that statistically you’re unlikely to make that last 30 years. George, I respect you but c’mon, my dude, the argument wasn’t that someone needs to live on $490k/year. It was that Dave thinks someone with a $7 mil nest egg can withdraw 7% (or even 8%) in perpetuity and still maintain the principal. That’s just incorrect, and it’s okay to not defend a ludicrous position.
Dave pays George's pay checks, and doesn't seem like a guy who tolerates a lot of dissent. George had no choice but to give avoid giving a straight answer.
He has to suck up to Dave. That’s why every financial thing he says is in alignment with him even if it makes no sense. That withdraw rate is ridiculous even a beginner knows that. I assume he knows that but he can’t call out his boss
@@fabsmaster5309 Only an idiot thinks they can plan for 8% withdrawal. You have to PLAN to live off 4%. Annual inflation at 3% means an 8% withdrawal is only even worth about 4% NET. And don't forget taxes. If you save for retirement properly it's not an issue but unfortunately many people don't. At 30 Just start max your Roth IRA contributions each year (14K) and then put an equal amount into your 401k. You'll retire with approx. $7 million which adjsuted for inflation is about $2million in today's money.
“Oh of course 7% withdrawal rate is safe if you don’t withdraw 7%” WHAT? Great conversation, and you both are among my favorite finance people. George needs to agree that Dave is wrong about it being safe to retire on $1M if you need $70k a year.
"George needs to agree that Dave is wrong about it being safe to retire on $1M if you need $70k a year." I'm sure George would love to do that...but I'm also sure George loves his job.
Think what he is saying is you have to use common sense. You take out 7% on good years and little less if you have a few down. Took two min to look up Dave on RUclips and he say anywhere from 5 to 8% depending on your average returns.
@@Kevlar_soul I’ve been watching hundreds of hours of Dave across years. I’ve learned a lot from him but also realized he is against accepting some mistakes. In more than one call he tells the audience and the callers about a safe 8% withdrawal rate in your retirement because the average market growth is higher than that. He either really believes that he knows an investment strategy that is way better than S&P 500 (and he sarcastically has said many times “and this is the average of the market, anyone can do it, you should go with a ramsey pro and get better returns than this”), or he wants people to have shorter retirements, or he does take into account other income sources like SSI etc in the default case scenario which is very misleading if not clearly stated. Going with an 8% withdrawal rate on a $1M investment portfolio (95% in S&P 500, and 5% in cash), and a minimum of withdrawing of $60k to sustain life in lower return years we have these odds of success: 10 year retirement: 100% 20 year: 74.6% 30 year: 55% 40 year: 32.5% People should really maximize the safety of a 30 year retirement while also leaving enough behind to take care of the formalities of when they pass away. The 8% is not a safe consistent withdrawal rate, period. If however, the couple from the example above delayed retirement by 5 years, kept their portfolio invested in S&P 500, and continued contributing $12k a year to it, in less than 5 years (on average) their portfolio would surpass $1.5M and then a safe 5% withdrawal rate with the same $60k minimum take out increases their chances to: 10 year: 100% success rate 20 year: 100% success rate 30 year: 96% 40 year: 90.4% So a 5% withdrawal rate can be advertised as “safe”, giving a 96% success rate on a 30 year retirement. In the second example the couple not only have a much better time with less stress, but they will also spend a lot more in retirement if you look at the calculations meaning they will have a higher quality life.
@@Kevlar_soul he has said “I am perfectly comfortable with 8%, if you want to be conservative 7%, but not 5%” 8% is not sustainable over long periods, so he should not generalize it as it has an almost 50% fail rate when retirement approaches 30+ years. So he either thinks people should have short retirements or he knows strategies to vastly outperform S&P 500 🤷🏻♂️ Try playing around with ficalc retirement tool and you see what a safe withdrawal rate is for you.
Caleb is super smart. 10:05 is evidence of a smart, thoughtful person. Also his general approach to asking questions and appreciation of nuance was awesome.
It’s crazy hearing George argue 7% because his job depends on it. Even though he doesn’t believe it. Borrower is servant to the lender, but being a servant of Dave Ramsey is worse. You literally have to deny reality.
George's answer to the 7% question was a complete cop-out. The point of a "safe" withdrawal rate is what you can reliably, continuously withdraw without risking the remainder of your retirement. If you have to put a bunch of conditions on when you can apply it it's not *safe*!
I love how the rationale to being confronted with the failure rate of a 7% withdrawal rate is that someone with a large retirement would not be spending 7%... so 7% is good as long as you don't actually take out 7%?
I really wish I understood what this entire segment was even about! I'm a regular Ramsey listener and I have never really heard them discuss a 7% withdrawal rate, but I'm not even sure what that means
Poor George. He knows anything more than 4% is dangerous but he's not allowed to say it anymore. Honestly he wasn't fired for that one video. Good on you though George.
it wouldn’t be so bad if Dave simply agreed to disagree when that whole thing went down but he’s so rigid and “my way or the Highway.” Doesn’t help that he’s just kind of an asshole in general
Figuring a 50/50 split between SS and 401(K) withdrawals, a person getting a 71K annual retirement salary would withdraw just under $3K/month from their 401(K). A person with 500K in their 401(K) would have a 50:50 chance of running out of money in retirement. And while you may not have a mortgage, between assistance and medical bills the costs aren't going to be that much different.
@@AnimatedIdiotGuide the thing is, Dave wouldn't be Dave if he would be more compromising about stuff like this. He can't compromise and he can't half-ass things. That got him where he is, but it also means he can be unreasonable about stuff.
So basically Dave refuses to admit he was out of line, and the caller didn't provide all the facts and George was right until his boss told him to change his position. Here's the thing, first George gives the green light to run a simulation, and then calls it wrong because it doesn't go his way. That's a DR move.
Dave's 7% plan comes from a place of someone with 300mil NW..and echos Georges pint that noone would spend that much...Calebs point is that 99.999% of folks dont have 300mil..if they have 1mil or less its very risky. George agrees but isnt allowed to disgree with Dave lol
Honestly, respect to George for including the 7% withdrawal rate portion. Regardless of which side you fall on, he didn't have to include that in the video and I'm glad he did. Both of these creators are doing wonders in the financial literacy space and I respect both immensely. Keep it up you two. But, I do agree with Caleb on most of these points 😂
I love the mental gymnastics to make the 7% withdrawal rate make sense. “Well if the market is down then you need to withdraw less” DUDE THAT MEANS YOUR PLANNED WITHDRAWAL RATE IS TOO HIGH. That is what RISK means. 51% risk of ruin. Unbelievable that George would pretend like that is a good idea.
16:53 caleb brought the heat...... george got called out and then decided to move the goalposts. especially when the Ramsey philosophy is retirement is a number not a feelings...... cash reserves magically appear, to save the day. And the 30 vs 15 year mortgage is a religious belief couched in risk, but the retirement is not, moral of the story, these are tips not instructions. Caleb's show is a cautionary tale.
I really admire the Ramsey team for being able to stick to their guns and not back down about the 7% withdrawal rate, even though they're completely wrong and everyone knows it.
George, I love you, man. You're great. Also, you took the standard, researched position on safe withdrawal rate until Dave disagreed and now you're all over the place trying to justify Dave's stance because you must do that to maintain your position at Ramsey Solutions. Everything else at Ramsey is all about relying on the numbers to give solid advice to the broadest audience, yet the numbers show that these hyper aggressive safe withdrawal rates do not work. I give it five maybe ten years before the Ramsey Solution's position changes to at most 5% which is considered the most aggressive safe withdrawal rate.
The day Dave retires is the day the Ramsey Solutions cast will finally be able to give their own advise. George doesn't want to get canned in the meantime.
I think George roundabout admitted that 7% was not safe. He danced around it, but him saying that he'd spend less on down market years is still him saying he wouldn't pull out 7% because its not a safe thing to do.
@@giantpune I think you are correct, if George disagrees with Dave, he'll have another meltdown on his show and not apologize for it. Don't get me wrong, I still love Dave, but he doesn't allow for opposing opinions. Think this was George's way of saying I agree with you without saying I disagree with Dave. This is a scenario I'm going to make up but the Ramsey personalities should be allowed to give their own takes on things like retirement so if George were to say, "Dave is more comfortable with 7% but I lean more towards the 5% withdraw rate, but you decide what's best for you" Then Dave can say "I believe you'll be fine at 7% as a general rule, now if you ask George, he's a little skiddish and leans more towards the 5%, but hey you do what you think you can do, and maybe sit down with a smart vester pro" Proceeds to talk about Churchill Mortgage... If everyone is saying the exact same thing, without any diversity of opinion on the staff, as long as the core values are the same there shouldn't be an issue. Not bringing politics into this just using an example. Look at the Daily Wire, Ben, Michael, and Matt disagree with a lot of things but they all agree on the same core values and are moving in the same direction. You can look at car channels like Donut Media, not everyone likes the same car but everyone there agrees cars are cool!
@@giantpune That's the biggest problem. Ramsey tries to talk about an "average" withdrawal rate or whatever, which means nothing. People want to know what they can COUNT on, not how they can spend as much as possible.
Yeah, George just made up a crazy high portfolio number to say it’s unrealistic, but the safe withdrawal rate is one of the most important factors for people about to retire in determining when they can retire and how much they can spend. 7% just gives people false hope. 4% may cause some people to delay retirement longer than necessary. Sure, if you’re flexible with your spending then maybe 7% is fine as a starting point if you can seriously cut back when the market dips.
@@ZO6Buccaneer and, as long as you're talking about PERCENTAGES, it doesn't matter HOW much money you have. If you're pulling out 7%, you'll end up broke half the time. And if you aren't spending 7%, then you're effectively not withdrawing all of it. If I had a billion, and pulled out $70 million a year, I could easily go broke. If I pulled out $70 million, but only spent $10 million every year, no I wouldn't go broke. But that's only a 1% withdrawal rate...I think everyone commenting here understands this. I think GEORGE understands this. Not sure about Dave, though...
So, the justification for claiming a 7% withdrawal rate is safe is to say that you can withdraw less during hard times? That's moving the goalposts. I absolutely agree with the logic to the answer and that well over a 4% *starting* withdrawal rate is safe, but claiming a 7% is safe because you aren't required to stick to 7% forever is disingenuous. It's the answer to "is it ever okay to withdraw 7% in a single year", but not "is 7% a safe withdrawal rate?"
I recently retired (year ago). My total nest egg is a tad under $100K. I'm a widower and my home is paid off. I have simple tastes, modest needs. Old car, bought with cash. Have been doing just fine on social security, haven't TOUCHED my nest egg. Life's good!
@@EtherBunny-z7kdon’t let people scare you with social security, look up the facts. Even if it goes broke, which it will, they are still going to being paying out at a percentage of money you were due to be paid it is not like it’s going to vanish. Nothing wrong with not depending on it, but saying you will get nothing is not supposed to be true either.
I think the problem is that the thinking is all wrong with this and they don't seem to communicate what they are trying to say very well. In this example, the withdrawal rates calculation is based on drawing down your principle by 7% of the value the first year. $490,000 is 7% of the $7,000,000. That mostly ignores rate of return on the savings. If you take out the $490,000 every year and earned 0% then the $7 million, it will last you 14 years. The models seem to close that gap by considering interest earned on what is not withdrawn ever year. However if you look at it as taking 7% of your total balance each year and you account for approximately 10% return on your investments every year, then the money goes a lot further because you are just drawing on the interest earned and maybe really taking a few percent of the actual base savings. If I have $7 million and earn 10% as the stock market has performed and I withdrawal 7%, I am taking $770,000. I now still have $6,930,000. Thus I've only drawn only 1% from the base savings.
That answer to the 7% withdrawal question is such a cop out hahahahahaha. George, Dave tells callers that they can do 8% in perpetuity, with no caveats. That’s simply not realistic.
In the 50's my Dad worked a modest job, Mom stayed at home and raised the kids, and they lived a nice middle class lifestyle including owning a home. Nowadays both I and my partner works and can barely afford to make ends meet. Soon the kids and family dog will need to work to keep this household going. It's the destruction of the American dream right before our eyes.
I'm 54 and my wife and I are VERY worried about our future, gas and food prices rising daily. We have had our savings dwindle with the cost of living into the stratosphere, and we are finding it impossible to replace them. We can get by, but can't seem to get ahead. My condolences to anyone retiring in this crisis, 30 years nonstop just for a crooked system to take all you worked for.
I feel your pain mate, as a fellow retiree, I'd suggest you look into passive index fund investing and learn some more. For me, I had my share of ups and downs when I first started looking for a consistent passive income so I hired an expert advisor for aid, and following her advice, I poured $30k in value stocks and digital assets, Up to 200k so far and pretty sure I'm ready for whatever comes.
If you are not in the financial market space right now, you are making a huge mistake. I understand that it could be due to ignorance, but if you want to make your money work for you...prevent inflation
I feel Investors should exercise caution with their exposure and.exercise caution when considering new investments, particularly during periods of inflation. It is advisable to seek guidance from a professional or a licensed expert in order to navigate this recession and achieve potential high yields
Tracy Britt Cool Consulting was my hope during the 'bear summer' last year. I made so many mistakes but also learned so much from it, and of course from Tracy.
Give him some slack, we both know he is just legally bound to be a Dave shill and doesn't believe any of that 7-8% garbage. He is just playing devils advocate and beating around the bush because he knows it's wrong but is not in a position to say so without ruining the nice gig he has.
Caleb Got him! George did everything to avoid answering the question and declined every opportunity to admit anything. Brushed aside the question where it failed by stating its 'hypothetical'. Come on... do you really think you will withdraw 7%? preach what you believe. If not, dont blame people for not following you or the term hypocritical comes out.
Why blame George because his boss is forcing him to agree with things he doesn't? The 7-8% nonsense is not, and never was George's claim, it's just the stuff his boss is selling. Can you really blame him for wanting to keep his job?
It's sad how George was putting out information based on actual data and facts and got ridiculed by Dave, and now George is having to come up with excuses to defend Dave's bad math.
The AT-AT firing every time a "bad" word was said is genius for this collaboration! Well done! Also, it was awesome getting to see you guys in the same video especially with your different view points.
I hope that one day George leaves Ramsey show one day so we can hear George’s true thoughts and opinions and not being chained to Dave’s strict opinions
Shoutout to the time George said 3-4% safe withdrawl rate on the Ramsey Solutions podcast and in later episode Dave was so mad that George was an idiot for promoting that. I seriously thought Dave was going to fire him like he did Chris Hogan.
In this episode George pretends that Dave did not make very dumb safe withdraw rate comments and tried to argue semantics on safe withdraw to not say his boss was wrong and misspoke.
Again watching George at 8:45 waiting for Caleb at 10. They could have just switched roles and started doing a financial audit but that would be a boring episode. Caleb: let's look at the debt George: there is none Caleb: did you spend more than you made? George: I'm an "every dollar" budget. Episode would be 15 min tops.
Thank you Kaleb for addressing the withdrawal rate! Dave saying 7-8% is absurd. But hey, its not Georges fault at the end of the day he has to stand by what the boss said even if he doesn’t agree.
15:30 would love to see Dave’s opinion on this, considering the stuff he said about George’s previous stance on 4/3% safe withdrawal rates. He has literally stated 1 million dollars should create an $80,000 income in perpetuity so…
George works for Ramsey Solutions. I’m pretty sure he has to agree with Dave’s perspective in public. However, I’m pretty sure he actually agrees with Caleb on some of these topics such as safe withdrawal rate.
I like this video a lot. I teach a teen finance class and it’s helpful to see how different people disagree on issues and why. Keep them coming please!
Well done on making an effort to change George’s mind. George was friendly to you about disagreement, and that’s great. I’m still waiting for an apology for being called malicious. George, your team has my email and my number. We can work out a resolution on this whole 8% thing. If I had a chance to be on this agree to disagree thing, it would make for a very different debate. Who wants to see that?
I love how George's argument boils down to "Well if the year is bad just don't withdraw 7% that year" It has the same energy as if the stock market is crashing, buy less stocks until they start going up again.
Caleb: When is a 7% withdrawal rate safe? George: If you have like $7M, sure. Caleb: Okay, that's $490,000 per year, it'll fail 51% of the time. George: Well, no one is withdrawing that much. Come on. Then they're not withdrawing 7%. What are you even talking about?
Yup. Dude started at 7 million. So stupid. Now try that with someone who has 700k or barely above a million. Guess what, you're going to HAVE TO spend every penny of that 7% and maybe more.
I give George credit for including the discussion about the withdrawal rate in the edit. Both of them are right on this issue. Caleb of course is correct that advocating for a blanket 7% withdrawal rate is crazy if you want the money to last for 30 years. And George is right that during retirement you can't just set your withdrawal rate at 7% and forget it. He is right that you have to pay attention to the market and how your investments are doing. The real problem in all of this is that Dave Ramsey NEVER says any of that. Over and over and over Dave goes on his show and just says that you can withdraw 7% or 8% or even 10% forever and ever with no worries. And when he is challenged on this he doesn't respond with a nuanced discussion like George did here - he responds with anger and vitriol. Dave completely ignores Sequence of Returns Risk and doesn't seem to understand that while the market does indeed average more than 10% return over long periods of time, that doesn't mean that you will get a 10% return every year. In fact you may not even get an average of 10% return during your retirement years. It is frustrating to listen to Dave talk about that so I just ignore him there.
The thing is, George doesn't agree that 7-8% is safe. The whole thing blew up literally because George had made a video advocating the 4% rule, which a viewer called in about which enraged Dave that George would say such a (correct) thing. Most people understand that George doesn't actually agree with the blanket claim, but he got his ass chewed out off air and for sure was told he would be canned if he ever talked bad about "Daves way" again. So now whenever the topic comes up he plays devils advocate in that he agrees to the claim "7% is safe" and then walks it back as hard as he can with as many excuses for the flawed logic that he can think of.
I’m proud of George and the team for leaving the full 7% withdrawal segment in there 🙌 Great discussion and good points on both sides. I don’t think George said anything wrong, and I’m glad he clarified “if you follow the Ramsey plan, your risk is much lower because you’ll have no Mortgage anyway”
Commend Caleb for bringing up the withdrawal rate topic. And extra props to George and team for actually including it in the final video. They could have cut it
George almost in tears and changing the terms of the argument rather than just admiting Daves advice on this matter was incorrect. Dave not allowing you out of his shadow George?
Great video! I really do have a question. For someone with less than $10,000 to invest, how would you recommend we enter the crypto market? I am looking at studying some traders and copying their strategy rather than investing myself and losing money emotionally. What's your take on this approach?
As a beginner investor, it's essential for you to have a mentor to keep you accountable. Harriet Y Peters is my trade analyst, she has guided me to identify key market trends, pinpointed strategic entry points, and provided risk assessments, ensuring my trades decisions align with market dynamics for optimal returns.
GOOD CONTENT!!! Very engaging right from the beginning These are tough times and frankly I appreciate how you discuss global finances in such a delicate way . Business and investment
Mrs Harriet Y Peters was my hope during the 'bear summer' last year. I did so many mistakes but also learned so much from it, and of course from Harriet Y Peters
the first step to successful investing is figuring out your goals and risk tolerance either on your own or with the help of a financial professional but is very advisable you make use of a professional.
She is my family's personal broker and also a personal broker in many families I'm United States, she's a licensed broker and a FINRA AGENT in United States.
So much of this comes down to the individual, not the activity itself. It’s hard to say the action alone like sports betting is “ruining people.” I’m in my 20s and love sports betting. However I’m extremely conservative with it and do it for fun, not to make money. I start each nfl season with $50 and always make several $5 or $10 bets each week and just see how long during the year I can ride it out. Pure entertainment, and not spending anything I can’t afford to lose
at the 8:00 mark, they talk about renting over buying. I currently own my residence and love it, however it was always a dream of mine to own a home in the mountains. A second vacation home. Now that I have gotten older, I'd rather just rent a home when I head to the mountains. Less headaches. Others may differ, but renting a house during ski season is much easier for me then owning it and worrying about it all year round. But that's me. You may love being a landlord in your older age.
3%is the rate in increase of inflation it's not inflation itself. The inflation that occurred since 2020 is just being compounded by the current inflation rate. It's additive to the mass inflation that occurred over the last few years and wages haven't kept up.
True but the inflation rate averages like 3% including 70's inflation so that means that some years there are only 1% or 2% inflation. It averages out over a long period of time.
@crackerpack4186 the problem is that wages aren't keeping pace with inflation. It wouldn't matter if inflation were 10% per year if your wages were increased by an equal amount or more.
George disproved his own point, if you have to take out less that 7% from your retirement in a down year, then that means that the number is not safe and the model is incorrect. The whole point of 4% is that it accounts for down years in the market
George has turned into a Dave Ramsey yes man over the withdrawal percentage after Dave was furious George pushed the 4% rule. I get it, Dave pays his salary but George has to think and speak for himself some. The $7M example was extravagant but quickly becomes real if it’s just $1M for 30 years.
I get the impression Dave tolerates dissension from his minions about as well as Putin would. Better to ramble incoherently for a few minutes like Kamala Harris than answer honestly.
Looking for this comment. Love how he started with a 7 million dollar retirement and then said "Oh, I won't be spending $490,000 a year so it doesn't matter" So stupid. Ok now try that mental gymnastics with 1 or 2 million. Which is what most people will have.
“Inflation” has never been a problem, as long as you have flexibility to move the dials/sliders where it’s spent. Kinda cool that the viewers of the poll mostly thought that; if they could command a higher salary, they’d be better off financially. We’re recognizing the biggest mover is in our control!! Amazing!
15:18 Caleb has George on the ropes bobbing and weaving like a prime Muhammad Ali, as he tries to avoid saying the wrong thing and being taken to the wood shed again by his "I'm a math guy" (who isn't very good at do math) boss.
That is my favorite thing ever. Dave always talks about how he’s a math nerd, except when it comes to withdrawal rates, mutual funds vs index funds, forgetting to include interest in debt payoff, taxes rates, company matches, what it takes to afford a home on a 15 year fixed (average home price of $400k requires over $200k income), etc.
Great stuff George! I see this gentleman on TikTok quite often. While there are disagreements the driving factor I have learned from both of you is, don't spend money like a dummy!
George comes up with a hypothetical to prove his point, then he says “well I mean you wouldn’t actually be withdrawing 7%”. George… you SAID you could withdraw 7% lmao
So George says 7% withdrawal rate is safe as long as you don't withdraw 7% every year? I'd say what he needs to say is identify your critical expenses (food, housing, ...) vs your variable expenses like travel. Critical expenses need to be well below the 7% - my opinion is 2.5 - 3%. If the market is doing well, go ahead and spend a little more. In fact why not keep track of your assets and basically spend in such a way as to try to keep your assets close to the expected values throughout your retirement?
It’s sad how Dave has him by the sack so much that he can’t disagree about the withdrawal rate. I understand everyone has to have the same opinion but IT SUCKS! If we wanted another Dave, we’d just watch Dave’s channel. I get it though. The boss makes the decisions. Maybe one day we will truly know what George believes cause I don’t think he agrees.
"For someone in an organization that isn't willing to accept a 2% interest rate loan on a 30-year fixed rate mortgage because that's considered too much risk, I don't think a 50% risk is considered acceptable." Extremely cogent point by Caleb, I'm surprised the editors kept that in. Dave needs to realize his extremely high withdrawal rate recommendations will literally lead to seniors running out of money in retirement.
Such a well said point
Question was great. George did an excellent job wiggling off the hook. For all the good content on Ramsey it does seem odd to push 7 or 8 percent withdrawal rates
Well George had his hand publicly and very firmly slapped by Dave for once recommending the 4% rule to someone. So it seems he has learned to step in rank.
I'm extremely tired of seeing these comments where people fixate on this. Firstly, George gave the wrong answer he should have said "depends if your average growth is 9% or not" because that's the portfolio growth that Dave Ramsey TEACHES his students to accept in their mutual funds retirement accounts, and he says to pick different funds of different risk types until you reach a 9 to 11% growth on average.
@@steven9red The whole problem is there are 5,10,15 year time periods in the market, where due to sequence of returns risk, you would've lost all your money withdrawing 5%+/yr -- even though over the long term the average would be 10% per year. Literally just run a simulation following Dave's advice, invested in his identical mutual funds, and see what would've happened to your money with these withdrawal rates had you retired in 1999 or 2000. Hint: You would run out of money within 15 years or less.
Loved Caleb pushing back on the withdrawal rate, well done!
Someone needs to. It’s just sad that all these Ramsey personalities can’t speak out because Dave has them by the you know what’s.. everything they say has to be in alignment with Dave. I’m sure many don’t agree on certain points but never speak their mind even on their own channels.
I hope George can get to the point where he can openly speak different opinions from Dave and be fine if he gets canned. I like him as a financial personality but you can tell he's on a short leash.
@@TheBobbyBrown22 you can just see on George’s face how much he disagrees with what he’s saying. It’s a shame
I think thats part of the reason why Anthony Oneal left the Ramsey Network to start his own channel. He still preaches the core values, but can be more open and honest on his opinions and also focus more heavily on the audience he personally wants to reach
@@larrysmith2655 So that doent happen at your work? lol. You dont have to tow the company line? Its not just Dave lol lol. BUT you can hate if you like
Caleb stepping up to the plate and calling them out 👌 priceless. Glad somebody did this.
Caleb finances particleboard furniture from Ashley. He talks big but acts a fool. He has no business calling out his own name.
I think every other financial RUclipsr I pay attention to called out Ramsey, I know the Money Guys and Ramit Seethi did.
@@DoobieKeebler-zz1mnYikes 😅 struck a nerve.
Hear ya though.
@@DoobieKeebler-zz1mnhe financed at 0% for 6 months then paid it in full. Caleb isn’t a Ramsey-never-have-debt-type. If you can handle it, he’s totally okay with you having debt as long as you’re not paying crazy high interest rates. Not sure what your argument is.
@@RupertMDoc they did in their own videos they uploaded, but not to their faces on any of the colabs.
Goon Squad, what up
Sup
whaddup boi
Dad when you coming back home with the sweet treat?
Goon squad here
Did you really have to do him like that 😂 Trying to get my man fired 😂😂😂 (Actually trying to chip away at a hard stance I know), you freaking loved that squirming you 😏
If we don’t get a full financial audit of George kamel, I’m gonna revolt
What does you revolting actually look like?
Or maybe people already think of you as revolting?
@@trebmaster me revolting looks a lot like me being mildly disappointed. As for the second part, no comment
@@trebmaster Havin a rough day?
It would probably be, why do you spend so much on your dogs!!! ...But I guess its OK because you are debt free and you have been aggressively saving.
Nah bro that would be so vanilla lol
You know once those cameras were off George told Caleb that of course 7-8% is unsafe...
I was thinking the same thing!
Yeah, can’t let Dave hear him say that 😂
Out of all of Dave's advice. This withdrawal rate I have seen him take more flak from other financial advisors more than any other. It is too high, and they run the numbers to prove it is too high.
@@Ryan_DeWitt but despite all of that and mathematical evidence…. He won’t (and neither will George) give in and admit that it isn’t safe
Watched another video that responded to this and said the rate was higher like 4.5 to 5%. So George would be closer to being right.
One of my biggest complaints with Dave Ramsey has always been “it’s Dave’s way, there’s no other way”. I like these segments where you openly debate different view point. 👍
To be fair, the Ramsey way works really well for folks who aren't at least at his Step 4. Past that, it's a good way to go, but there are a lot of other viable approaches.
@@willerwin3201 I agree
@@jasondima1411 Caveat: Ramsey's fondness for managed mutual funds is not optimal, and advocating an 8% withdrawal rate in retirement is risky.
Unmanaged index funds are objectively superior to managed mutual funds, and 4% withdrawal is a far safer planning factor.
The Ramsey way has been the same for 30 years. And hasn’t changed in 30 years. That’s why. Do people do their own thing? Of course. But it teaches and instills responsibility and accountability
I believe his methods are effective for individuals with limited financial literacy and poor self-control. They may not always be ideal, but they work well for the majority of people.
George: "7% withdrawal rates make sense for people with 7 million dollars in their nest egg"
Caleb: *runs simulation to show the risk*
George: "Well nobody would do that in real life anyways"
So then why was that the example used by George in the first place? Comes off as incredibly disingenuous
Yep, and the rate of return is highly dependent on the success or failure during first few years. If you take out 7% the first couple years and the market is down bad during that time, it will drastically kill your overall return even if the market sees ups again
Yea that was some surprisingly wishy washy reasoning on how to make that work with a smaller nest egg.
That was not elegant from George's part.
Employees not allowed to make their own informed decisions and formulate their own opinions?... Seems cult-ish to me lol.
George got taken to school, I want Dave to have this talk, watch how fast he starts yelling and saying he's been doing it twice as long as you been alive, it's out of date, update the plan Ramsey team
Nah George is bending around backwards to defend Dave even when Dave is wrong about the 7% withdrawal rate.
4% is the safe amount where you maintain your wealth for your children. The reason Dave says a high withdrawal rate is to arbitrarily give hope to someone retiring with $1million who knows they can’t get by on $40k
The problem is he's his employee (as is his wife), so he kind of has to (or leave)
Not saying either way is "wrong", but I think Dave believes you should set your children up for personal success so they're not waiting on your inheritance.
@@sumerianbotfarm There's a difference between saying "7% is safe" and "Do 4% on average and scale up on a good year / cut down on a bad one"
@@sumerianbotfarm nah it’s wrong to pull out 7% and drain your savings if you don’t have to. Dave likes to say 1 solution for everyone and stick to it.
If you have $1 million dollars at 70 years old, yeah you should withdraw at 7%. If you have $7 million at 60 years old, you should withdraw at 4%
Which is so what do I do with the additional 8% on top of the four that is generated every year?
Feel bad for George. His initial video was right, the data says 4%. But he has to give bad advice now because his boss is too arrogant to admit he is wrong on this point. Even Rachel agrees with George. They need to have an intervention with Dave before people blow up their retirement accounts!
Track record speaks for itself. Click bait does not
@richardfederico9461 things in finances change over the decades, Dave is still doing the same thing as he was 20 years ago which don't worn in our world today and he's to stubborn to change
@@mapko15 they worked 300 years ago and still do today. Nothing has changed about living on less than you make, sacrificing and saving for a rainy day. Not being willing to sacrifice is as old as this country
@richardfederico9461 sure why not just go pitch a tent in the forest and live off of the woods then
I don't understand what all the fuss is about. If you maintain 18 months living expenses in cash, turn off dividend reinvestment, and don't sell off capital during market downturns, then you can probably actually average 7-8%
LOL the mental gymnastics George does to avoid the 7% swr question is HILARIOUS
He sees an image of Dave standing over him ready to lay down the hammer
@Bobventk , in his defense.. the assumptions they put into these models are dumb. They are designed by investment advisors and fund managers to scare people into investing more than they need to for longer.
If you have any sort of intelligence, you will change your habits if needed to come out of downturn in the market better. It's not hard to shift your investments to make good returns in a downturn.
Well ya, he got his ass reamed by Dave for claiming 4% is safe and no doubt is now contractual obligated to shill the 7-8% garbage. He doesn't agree with it, so it's hard for him to formulate a defense for what he knows is wrong.
@@getinthespace7715 no, the assumptions aren’t dumb. Obviously if you get a bad sequence you’d reduce your WD rate.
@@CrypticCobra it’s funny to watch Rachel too swallow her tongue when Dave says some absolute nonsense. Money talks
7% on $7mio will run out just as fast as 7% on $100k.
Embarrassing that people giving financial advice don't realize that.
Ik i was like why are they running the same example with different dollar figures as if the percentages care about that shit
Even if you had that much - a critical illness could wipe you out
George is reeling when Caleb compared the withdrawal rate risk to the 30 year mortgage being too risky 😂
That was beautiful not going to lie 😂
Best line in this episode. Solid!
I feel bad for George that Dave is such an authoritarian that he won't let George differ with him on this publicly.
Caleb is right on the withdrawal rate issue. Dave was emphatic not long ago that 8% is perfectly sustainable. Caleb is showing that statistically you’re unlikely to make that last 30 years. George, I respect you but c’mon, my dude, the argument wasn’t that someone needs to live on $490k/year. It was that Dave thinks someone with a $7 mil nest egg can withdraw 7% (or even 8%) in perpetuity and still maintain the principal. That’s just incorrect, and it’s okay to not defend a ludicrous position.
Thankyou … 8% withdraw gives you a 70% chance you have no money left when you die
Dave pays George's pay checks, and doesn't seem like a guy who tolerates a lot of dissent. George had no choice but to give avoid giving a straight answer.
George knows if he wants to stay at Ramsey Solutions there are some lines that he cannot cross.
He has to suck up to Dave. That’s why every financial thing he says is in alignment with him even if it makes no sense. That withdraw rate is ridiculous even a beginner knows that. I assume he knows that but he can’t call out his boss
Remember he did say once that 4% was the recommended withdraw rate but then Dave made it back down from that argument
We all know Ramsey is wrong on his retirement withdrawal rate. He just won't admit it.
He doesnt have to lol. If you follow his WHOLE plan you will be 9000000000 times better than if you need his plan and dont do it.
I wonder if it’s semi-conscious ignorance knowing that an 8% withdrawal rate will get people more excited about saving than 4%
@@fabsmaster5309 Only an idiot thinks they can plan for 8% withdrawal. You have to PLAN to live off 4%. Annual inflation at 3% means an 8% withdrawal is only even worth about 4% NET. And don't forget taxes. If you save for retirement properly it's not an issue but unfortunately many people don't. At 30 Just start max your Roth IRA contributions each year (14K) and then put an equal amount into your 401k. You'll retire with approx. $7 million which adjsuted for inflation is about $2million in today's money.
@@fabsmaster5309i think thats it, he's trying to market saving to people. It's hard to get excited over a 5% real return.
💯
“Oh of course 7% withdrawal rate is safe if you don’t withdraw 7%”
WHAT?
Great conversation, and you both are among my favorite finance people.
George needs to agree that Dave is wrong about it being safe to retire on $1M if you need $70k a year.
"George needs to agree that Dave is wrong about it being safe to retire on $1M if you need $70k a year."
I'm sure George would love to do that...but I'm also sure George loves his job.
Think what he is saying is you have to use common sense.
You take out 7% on good years and little less if you have a few down.
Took two min to look up Dave on RUclips and he say anywhere from 5 to 8% depending on your average returns.
@@Kevlar_soul I’ve been watching hundreds of hours of Dave across years. I’ve learned a lot from him but also realized he is against accepting some mistakes.
In more than one call he tells the audience and the callers about a safe 8% withdrawal rate in your retirement because the average market growth is higher than that.
He either really believes that he knows an investment strategy that is way better than S&P 500 (and he sarcastically has said many times “and this is the average of the market, anyone can do it, you should go with a ramsey pro and get better returns than this”), or he wants people to have shorter retirements, or he does take into account other income sources like SSI etc in the default case scenario which is very misleading if not clearly stated.
Going with an 8% withdrawal rate on a $1M investment portfolio (95% in S&P 500, and 5% in cash), and a minimum of withdrawing of $60k to sustain life in lower return years we have these odds of success:
10 year retirement: 100%
20 year: 74.6%
30 year: 55%
40 year: 32.5%
People should really maximize the safety of a 30 year retirement while also leaving enough behind to take care of the formalities of when they pass away. The 8% is not a safe consistent withdrawal rate, period.
If however, the couple from the example above delayed retirement by 5 years, kept their portfolio invested in S&P 500, and continued contributing $12k a year to it, in less than 5 years (on average) their portfolio would surpass $1.5M and then a safe 5% withdrawal rate with the same $60k minimum take out increases their chances to:
10 year: 100% success rate
20 year: 100% success rate
30 year: 96%
40 year: 90.4%
So a 5% withdrawal rate can be advertised as “safe”, giving a 96% success rate on a 30 year retirement.
In the second example the couple not only have a much better time with less stress, but they will also spend a lot more in retirement if you look at the calculations meaning they will have a higher quality life.
@@Kevlar_soul he has said “I am perfectly comfortable with 8%, if you want to be conservative 7%, but not 5%”
8% is not sustainable over long periods, so he should not generalize it as it has an almost 50% fail rate when retirement approaches 30+ years.
So he either thinks people should have short retirements or he knows strategies to vastly outperform S&P 500 🤷🏻♂️
Try playing around with ficalc retirement tool and you see what a safe withdrawal rate is for you.
Caleb is super smart. 10:05 is evidence of a smart, thoughtful person. Also his general approach to asking questions and appreciation of nuance was awesome.
If he’s smart he’s part of this generation’s problems. He’s worded hard and made his way. Dave has spent 30 years helping people
It’s crazy hearing George argue 7% because his job depends on it. Even though he doesn’t believe it. Borrower is servant to the lender, but being a servant of Dave Ramsey is worse. You literally have to deny reality.
I guarantee you working for Dave is not worse than being in debt lol
@@TylerWilhelm-tj8twit totally is! He makes his employees schedule bathroom breaks!!!
George's answer to the 7% question was a complete cop-out. The point of a "safe" withdrawal rate is what you can reliably, continuously withdraw without risking the remainder of your retirement. If you have to put a bunch of conditions on when you can apply it it's not *safe*!
I think that's because he doesn't really agree with Dave on this issue but he'll lose his job if he doesn't agree.
I love how the rationale to being confronted with the failure rate of a 7% withdrawal rate is that someone with a large retirement would not be spending 7%... so 7% is good as long as you don't actually take out 7%?
I really wish I understood what this entire segment was even about! I'm a regular Ramsey listener and I have never really heard them discuss a 7% withdrawal rate, but I'm not even sure what that means
Patiently waiting for George to leave Ramsey Solutions and branch out more. These two work well together.
Hmm... I can imagine there being a non-compete that won't let him contradict for a while, which makes me sad.
Poor George. He knows anything more than 4% is dangerous but he's not allowed to say it anymore. Honestly he wasn't fired for that one video. Good on you though George.
it wouldn’t be so bad if Dave simply agreed to disagree when that whole thing went down but he’s so rigid and “my way or the Highway.” Doesn’t help that he’s just kind of an asshole in general
Figuring a 50/50 split between SS and 401(K) withdrawals, a person getting a 71K annual retirement salary would withdraw just under $3K/month from their 401(K). A person with 500K in their 401(K) would have a 50:50 chance of running out of money in retirement.
And while you may not have a mortgage, between assistance and medical bills the costs aren't going to be that much different.
Anyone have a video title so I can see what there talking about
@@AnimatedIdiotGuide the thing is, Dave wouldn't be Dave if he would be more compromising about stuff like this. He can't compromise and he can't half-ass things. That got him where he is, but it also means he can be unreasonable about stuff.
@@DankZank Dave Ramsey Eviscerates Co-Host George Kamel for Preaching the 4% Rule (Channel-> The Power of Zero)
So basically Dave refuses to admit he was out of line, and the caller didn't provide all the facts and George was right until his boss told him to change his position. Here's the thing, first George gives the green light to run a simulation, and then calls it wrong because it doesn't go his way. That's a DR move.
Dave is so stuck in his own ways its incredible. Can NEVER admit when he is wrong
Completely doged the 7% withdrawl question. But we know what happened last time.
Wait, what happened?
Dave said he needed to talk the person on his tema who said 4%...
Dave's 7% plan comes from a place of someone with 300mil NW..and echos Georges pint that noone would spend that much...Calebs point is that 99.999% of folks dont have 300mil..if they have 1mil or less its very risky. George agrees but isnt allowed to disgree with Dave lol
15:20 🤣 Caleb you know you can’t make him disagree with his daddy Dave 🤣
You mean disagree?
S/O Caleb for asking the withdrawal rate question. We all know why George answered the way he did.
Honestly, respect to George for including the 7% withdrawal rate portion. Regardless of which side you fall on, he didn't have to include that in the video and I'm glad he did. Both of these creators are doing wonders in the financial literacy space and I respect both immensely. Keep it up you two.
But, I do agree with Caleb on most of these points 😂
I love the mental gymnastics to make the 7% withdrawal rate make sense. “Well if the market is down then you need to withdraw less” DUDE THAT MEANS YOUR PLANNED WITHDRAWAL RATE IS TOO HIGH. That is what RISK means. 51% risk of ruin. Unbelievable that George would pretend like that is a good idea.
He’s not the Mr. Roger’s of Finance. He’s the Gordon Ramsey of Finance
I love the agree to disagree format. I would love to see you do more of them.
16:53 caleb brought the heat...... george got called out and then decided to move the goalposts. especially when the Ramsey philosophy is retirement is a number not a feelings...... cash reserves magically appear, to save the day.
And the 30 vs 15 year mortgage is a religious belief couched in risk, but the retirement is not, moral of the story, these are tips not instructions. Caleb's show is a cautionary tale.
The answer was simple
7% IS NOT A SAFE WITHDRAW RATE
I really admire the Ramsey team for being able to stick to their guns and not back down about the 7% withdrawal rate, even though they're completely wrong and everyone knows it.
George, I love you, man. You're great. Also, you took the standard, researched position on safe withdrawal rate until Dave disagreed and now you're all over the place trying to justify Dave's stance because you must do that to maintain your position at Ramsey Solutions. Everything else at Ramsey is all about relying on the numbers to give solid advice to the broadest audience, yet the numbers show that these hyper aggressive safe withdrawal rates do not work. I give it five maybe ten years before the Ramsey Solution's position changes to at most 5% which is considered the most aggressive safe withdrawal rate.
The day Dave retires is the day the Ramsey Solutions cast will finally be able to give their own advise. George doesn't want to get canned in the meantime.
The withdrawl rate conversation was great... Good Job Calab! Basicaly George says 7 % is safe, if you don't consider it to be save - wow!
I think George roundabout admitted that 7% was not safe. He danced around it, but him saying that he'd spend less on down market years is still him saying he wouldn't pull out 7% because its not a safe thing to do.
@@giantpune I think you are correct, if George disagrees with Dave, he'll have another meltdown on his show and not apologize for it. Don't get me wrong, I still love Dave, but he doesn't allow for opposing opinions. Think this was George's way of saying I agree with you without saying I disagree with Dave.
This is a scenario I'm going to make up but the Ramsey personalities should be allowed to give their own takes on things like retirement so if George were to say, "Dave is more comfortable with 7% but I lean more towards the 5% withdraw rate, but you decide what's best for you" Then Dave can say "I believe you'll be fine at 7% as a general rule, now if you ask George, he's a little skiddish and leans more towards the 5%, but hey you do what you think you can do, and maybe sit down with a smart vester pro" Proceeds to talk about Churchill Mortgage...
If everyone is saying the exact same thing, without any diversity of opinion on the staff, as long as the core values are the same there shouldn't be an issue. Not bringing politics into this just using an example. Look at the Daily Wire, Ben, Michael, and Matt disagree with a lot of things but they all agree on the same core values and are moving in the same direction. You can look at car channels like Donut Media, not everyone likes the same car but everyone there agrees cars are cool!
@@giantpune That's the biggest problem. Ramsey tries to talk about an "average" withdrawal rate or whatever, which means nothing. People want to know what they can COUNT on, not how they can spend as much as possible.
The "We live in the real world" excuse is such a cop out
Yeah, George just made up a crazy high portfolio number to say it’s unrealistic, but the safe withdrawal rate is one of the most important factors for people about to retire in determining when they can retire and how much they can spend. 7% just gives people false hope. 4% may cause some people to delay retirement longer than necessary. Sure, if you’re flexible with your spending then maybe 7% is fine as a starting point if you can seriously cut back when the market dips.
@@ZO6Buccaneer and, as long as you're talking about PERCENTAGES, it doesn't matter HOW much money you have. If you're pulling out 7%, you'll end up broke half the time. And if you aren't spending 7%, then you're effectively not withdrawing all of it. If I had a billion, and pulled out $70 million a year, I could easily go broke. If I pulled out $70 million, but only spent $10 million every year, no I wouldn't go broke. But that's only a 1% withdrawal rate...I think everyone commenting here understands this. I think GEORGE understands this. Not sure about Dave, though...
Especially since those simulations are based on real-world historical data
So, the justification for claiming a 7% withdrawal rate is safe is to say that you can withdraw less during hard times? That's moving the goalposts.
I absolutely agree with the logic to the answer and that well over a 4% *starting* withdrawal rate is safe, but claiming a 7% is safe because you aren't required to stick to 7% forever is disingenuous. It's the answer to "is it ever okay to withdraw 7% in a single year", but not "is 7% a safe withdrawal rate?"
It's not so much moving the goalpost as it is an admission that 7% is not safe.
I recently retired (year ago). My total nest egg is a tad under $100K. I'm a widower and my home is paid off. I have simple tastes, modest needs. Old car, bought with cash. Have been doing just fine on social security, haven't TOUCHED my nest egg. Life's good!
Thanks for sharing that!
Under 100k? Yikes.
That’s great, millions of us can’t rely on social security being around when we retire. Even today I think having less than $100k is terrifying.
@@EtherBunny-z7k Agreed, but in my personal case, I have health issues that will most likely mean I'll be gone before SS implodes.
@@EtherBunny-z7kdon’t let people scare you with social security, look up the facts. Even if it goes broke, which it will, they are still going to being paying out at a percentage of money you were due to be paid it is not like it’s going to vanish. Nothing wrong with not depending on it, but saying you will get nothing is not supposed to be true either.
The withdrawal rate question is embarrassing.
The 7 percent discussion was painful to listen to. Caleb made a lot more sense there
I think the problem is that the thinking is all wrong with this and they don't seem to communicate what they are trying to say very well. In this example, the withdrawal rates calculation is based on drawing down your principle by 7% of the value the first year. $490,000 is 7% of the $7,000,000. That mostly ignores rate of return on the savings. If you take out the $490,000 every year and earned 0% then the $7 million, it will last you 14 years. The models seem to close that gap by considering interest earned on what is not withdrawn ever year.
However if you look at it as taking 7% of your total balance each year and you account for approximately 10% return on your investments every year, then the money goes a lot further because you are just drawing on the interest earned and maybe really taking a few percent of the actual base savings. If I have $7 million and earn 10% as the stock market has performed and I withdrawal 7%, I am taking $770,000. I now still have $6,930,000. Thus I've only drawn only 1% from the base savings.
That answer to the 7% withdrawal question is such a cop out hahahahahaha. George, Dave tells callers that they can do 8% in perpetuity, with no caveats. That’s simply not realistic.
It charms me that even though this is George's own comment section, people side with Caleb because they side with common sense.
In the 50's my Dad worked a modest job, Mom stayed at home and raised the kids, and they lived a nice middle class lifestyle including owning a home. Nowadays both I and my partner works and can barely afford to make ends meet. Soon the kids and family dog will need to work to keep this household going. It's the destruction of the American dream right before our eyes.
I'm 54 and my wife and I are VERY worried about our future, gas and food prices rising daily. We have had our savings dwindle with the cost of living into the stratosphere, and we are finding it impossible to replace them. We can get by, but can't seem to get ahead. My condolences to anyone retiring in this crisis, 30 years nonstop just for a crooked system to take all you worked for.
I feel your pain mate, as a fellow retiree, I'd suggest you look into passive index fund investing and learn some more. For me, I had my share of ups and downs when I first started looking for a consistent passive income so I hired an expert advisor for aid, and following her advice, I poured $30k in value stocks and digital assets, Up to 200k so far and pretty sure I'm ready for whatever comes.
If you are not in the financial market space right now, you are making a huge mistake. I understand that it could be due to ignorance, but if you want to make your money work for you...prevent inflation
I feel Investors should exercise caution with their exposure and.exercise caution when considering new investments, particularly during periods of inflation. It is advisable to seek guidance from a professional or a licensed expert in order to navigate this recession and achieve potential high yields
Tracy Britt Cool Consulting was my hope during the 'bear summer' last year. I made so many mistakes but also learned so much from it, and of course from Tracy.
George has to tip toe because daddy Dave Ramsey has him on a leash. Couldn't be me.
Caleb Got him on the withdrawal rate.
Give him some slack, we both know he is just legally bound to be a Dave shill and doesn't believe any of that 7-8% garbage. He is just playing devils advocate and beating around the bush because he knows it's wrong but is not in a position to say so without ruining the nice gig he has.
Caleb Got him! George did everything to avoid answering the question and declined every opportunity to admit anything. Brushed aside the question where it failed by stating its 'hypothetical'. Come on... do you really think you will withdraw 7%? preach what you believe. If not, dont blame people for not following you or the term hypocritical comes out.
Why blame George because his boss is forcing him to agree with things he doesn't? The 7-8% nonsense is not, and never was George's claim, it's just the stuff his boss is selling. Can you really blame him for wanting to keep his job?
It's sad how George was putting out information based on actual data and facts and got ridiculed by Dave, and now George is having to come up with excuses to defend Dave's bad math.
I'm investing max 401k, HSA, Roth etc and have no debt (mortgage paid off). I'm out at 62. What I got is what I got. I want to live life.
Wow, this is a treat to see my favourite finance RUclipsrs in a crossover! Thank you guys.
JUST ADMIT 7% is NOT OKAY, you’re talking in circles…stick to 4-5% people.
The AT-AT firing every time a "bad" word was said is genius for this collaboration! Well done! Also, it was awesome getting to see you guys in the same video especially with your different view points.
I thought I was on Hoth listening to this. Thanks for confirming that. 😅
I hope that one day George leaves Ramsey show one day so we can hear George’s true thoughts and opinions and not being chained to Dave’s strict opinions
Dave will fire him soon enough. He loves to fire people-inspired by his daddy, Trump. Ramsey personalities do not last long.
George is too smart and charismatic to be locked into a contract. Dude could've been popular, wealthy, and INDEPENDENT.
I agree. I hope he makes close to 7 figures per year with Ramsey or have good % of the company otherwise he should just leave and do its own thing.
@@bobbyboyer lol seven figures. Look on glassdoor the ramsey personalities barely clear 80k
@@bobbyboyer lol seven figures
Research it they barely clear 80k
I thought Caleb's guests had to use a fake name. Unless George isn't his name. 🤔
😂
But this is George's channel, so Caleb is the guest.
Jorge Camel…..that should do it.
Ah but he didn't make George say "This is Financial Audit."
Jorge Deserthorse would have been a sick pseudonym
Shoutout to the time George said 3-4% safe withdrawl rate on the Ramsey Solutions podcast and in later episode Dave was so mad that George was an idiot for promoting that. I seriously thought Dave was going to fire him like he did Chris Hogan.
Like
To be fair, Hogan got fired for infidelity which is a company policy.
Ramit Sethi, next!
George can't agree otherwise he could get fired.
In this episode George pretends that Dave did not make very dumb safe withdraw rate comments and tried to argue semantics on safe withdraw to not say his boss was wrong and misspoke.
Again watching George at 8:45 waiting for Caleb at 10. They could have just switched roles and started doing a financial audit but that would be a boring episode.
Caleb: let's look at the debt
George: there is none
Caleb: did you spend more than you made?
George: I'm an "every dollar" budget.
Episode would be 15 min tops.
George backtracked quick with that 7% withdrawal question. He couldn't even agree that the upper class could pull 7% consistently.
Thank you Kaleb for addressing the withdrawal rate!
Dave saying 7-8% is absurd. But hey, its not Georges fault at the end of the day he has to stand by what the boss said even if he doesn’t agree.
15:30 would love to see Dave’s opinion on this, considering the stuff he said about George’s previous stance on 4/3% safe withdrawal rates. He has literally stated 1 million dollars should create an $80,000 income in perpetuity so…
This was a really strong video; not just an echo-chamber, but a discussion from two different approaches
George works for Ramsey Solutions. I’m pretty sure he has to agree with Dave’s perspective in public. However, I’m pretty sure he actually agrees with Caleb on some of these topics such as safe withdrawal rate.
I like this video a lot. I teach a teen finance class and it’s helpful to see how different people disagree on issues and why. Keep them coming please!
Well done on making an effort to change George’s mind. George was friendly to you about disagreement, and that’s great. I’m still waiting for an apology for being called malicious.
George, your team has my email and my number. We can work out a resolution on this whole 8% thing.
If I had a chance to be on this agree to disagree thing, it would make for a very different debate. Who wants to see that?
I love how George's argument boils down to "Well if the year is bad just don't withdraw 7% that year"
It has the same energy as if the stock market is crashing, buy less stocks until they start going up again.
Caleb: When is a 7% withdrawal rate safe?
George: If you have like $7M, sure.
Caleb: Okay, that's $490,000 per year, it'll fail 51% of the time.
George: Well, no one is withdrawing that much. Come on.
Then they're not withdrawing 7%. What are you even talking about?
That whole thing was insane. "Well I jsut wouldnt withdraw then" ... WHAT IS EVEN HAPPENING hahaha
Yup. Dude started at 7 million. So stupid. Now try that with someone who has 700k or barely above a million. Guess what, you're going to HAVE TO spend every penny of that 7% and maybe more.
the pickle ball racket to the face killed me 🤣🤣🤣🤣🤣🤣🤣
lol ... I am still laughing at that. that was great
I give George credit for including the discussion about the withdrawal rate in the edit. Both of them are right on this issue. Caleb of course is correct that advocating for a blanket 7% withdrawal rate is crazy if you want the money to last for 30 years. And George is right that during retirement you can't just set your withdrawal rate at 7% and forget it. He is right that you have to pay attention to the market and how your investments are doing. The real problem in all of this is that Dave Ramsey NEVER says any of that. Over and over and over Dave goes on his show and just says that you can withdraw 7% or 8% or even 10% forever and ever with no worries. And when he is challenged on this he doesn't respond with a nuanced discussion like George did here - he responds with anger and vitriol. Dave completely ignores Sequence of Returns Risk and doesn't seem to understand that while the market does indeed average more than 10% return over long periods of time, that doesn't mean that you will get a 10% return every year. In fact you may not even get an average of 10% return during your retirement years. It is frustrating to listen to Dave talk about that so I just ignore him there.
The thing is, George doesn't agree that 7-8% is safe. The whole thing blew up literally because George had made a video advocating the 4% rule, which a viewer called in about which enraged Dave that George would say such a (correct) thing.
Most people understand that George doesn't actually agree with the blanket claim, but he got his ass chewed out off air and for sure was told he would be canned if he ever talked bad about "Daves way" again. So now whenever the topic comes up he plays devils advocate in that he agrees to the claim "7% is safe" and then walks it back as hard as he can with as many excuses for the flawed logic that he can think of.
The mental gymnastics for George being Daves lapdog is hilarious
I’m proud of George and the team for leaving the full 7% withdrawal segment in there 🙌
Great discussion and good points on both sides. I don’t think George said anything wrong, and I’m glad he clarified “if you follow the Ramsey plan, your risk is much lower because you’ll have no Mortgage anyway”
He definitely bullshitted in his response but okay?
Commend Caleb for bringing up the withdrawal rate topic. And extra props to George and team for actually including it in the final video. They could have cut it
George almost in tears and changing the terms of the argument rather than just admiting Daves advice on this matter was incorrect. Dave not allowing you out of his shadow George?
Caleb is my absolute favourite! Yay for this segment!
Great video! I really do have a question. For someone with less than $10,000 to invest, how would you recommend we enter the crypto market?
I am looking at studying some traders and copying their strategy rather than investing myself and losing money emotionally. What's your take on this approach?
As a beginner investor, it's essential for you to have a mentor to keep you accountable. Harriet Y Peters is my trade analyst, she has guided me to identify key market trends, pinpointed strategic entry points, and provided risk assessments, ensuring my trades decisions align with market dynamics for optimal returns.
GOOD CONTENT!!! Very engaging right from the beginning These are tough times and frankly I appreciate how you discuss global finances in such a delicate way . Business and investment
Mrs Harriet Y Peters was my hope during the 'bear summer' last year. I did so many mistakes but also learned so much from it, and of course from Harriet Y Peters
the first step to successful investing is figuring out your goals and risk tolerance either on your own or with the help of a financial professional but is very advisable you make use of a professional.
She is my family's personal broker and also a personal broker in many families I'm United States, she's a licensed broker and a FINRA AGENT in United States.
So much of this comes down to the individual, not the activity itself. It’s hard to say the action alone like sports betting is “ruining people.” I’m in my 20s and love sports betting. However I’m extremely conservative with it and do it for fun, not to make money. I start each nfl season with $50 and always make several $5 or $10 bets each week and just see how long during the year I can ride it out. Pure entertainment, and not spending anything I can’t afford to lose
at the 8:00 mark, they talk about renting over buying. I currently own my residence and love it, however it was always a dream of mine to own a home in the mountains. A second vacation home. Now that I have gotten older, I'd rather just rent a home when I head to the mountains. Less headaches. Others may differ, but renting a house during ski season is much easier for me then owning it and worrying about it all year round. But that's me. You may love being a landlord in your older age.
It’s amazing to me the amount of mental gymnastics George is willing to perform to avoid breaking rank.
Picked up my XAI770K at $0.3 already running to $1. Life saver!
Sure, he said all the time he won't do it and now he did
Where do you find that?
Good I hoped he would start this month, I'm so ready 🔥
The big talk on Lex was detailed about this, too. This is a smart step ahead of all competition
This won't save Elon's X
3:36 I am from the UK, and I can confidently say the US has let pandoras box open with loosening online gambling so much.
It’s just as bad in the UK, it’s just more stigmatised
3%is the rate in increase of inflation it's not inflation itself. The inflation that occurred since 2020 is just being compounded by the current inflation rate. It's additive to the mass inflation that occurred over the last few years and wages haven't kept up.
True but the inflation rate averages like 3% including 70's inflation so that means that some years there are only 1% or 2% inflation. It averages out over a long period of time.
@crackerpack4186 the problem is that wages aren't keeping pace with inflation. It wouldn't matter if inflation were 10% per year if your wages were increased by an equal amount or more.
George disproved his own point, if you have to take out less that 7% from your retirement in a down year, then that means that the number is not safe and the model is incorrect. The whole point of 4% is that it accounts for down years in the market
George has turned into a Dave Ramsey yes man over the withdrawal percentage after Dave was furious George pushed the 4% rule. I get it, Dave pays his salary but George has to think and speak for himself some. The $7M example was extravagant but quickly becomes real if it’s just $1M for 30 years.
I get the impression Dave tolerates dissension from his minions about as well as Putin would. Better to ramble incoherently for a few minutes like Kamala Harris than answer honestly.
@@libertarian4323well said.
Looking for this comment. Love how he started with a 7 million dollar retirement and then said "Oh, I won't be spending $490,000 a year so it doesn't matter" So stupid. Ok now try that mental gymnastics with 1 or 2 million. Which is what most people will have.
“Inflation” has never been a problem, as long as you have flexibility to move the dials/sliders where it’s spent.
Kinda cool that the viewers of the poll mostly thought that; if they could command a higher salary, they’d be better off financially. We’re recognizing the biggest mover is in our control!! Amazing!
Good on you Caleb
Thanks so much for this episode! I love both Caleb and Georges content and pretty much watch them daily.
15:18 Caleb has George on the ropes bobbing and weaving like a prime Muhammad Ali, as he tries to avoid saying the wrong thing and being taken to the wood shed again by his "I'm a math guy" (who isn't very good at do math) boss.
That is my favorite thing ever. Dave always talks about how he’s a math nerd, except when it comes to withdrawal rates, mutual funds vs index funds, forgetting to include interest in debt payoff, taxes rates, company matches, what it takes to afford a home on a 15 year fixed (average home price of $400k requires over $200k income), etc.
Yup Dave only cares about math if it fits into the baby steps.
Great stuff George! I see this gentleman on TikTok quite often. While there are disagreements the driving factor I have learned from both of you is, don't spend money like a dummy!
George comes up with a hypothetical to prove his point, then he says “well I mean you wouldn’t actually be withdrawing 7%”. George… you SAID you could withdraw 7% lmao
Na, dave said it, George is just obligated to agree with it while he works for him. Don't shoot the messenger.
So George says 7% withdrawal rate is safe as long as you don't withdraw 7% every year? I'd say what he needs to say is identify your critical expenses (food, housing, ...) vs your variable expenses like travel. Critical expenses need to be well below the 7% - my opinion is 2.5 - 3%. If the market is doing well, go ahead and spend a little more. In fact why not keep track of your assets and basically spend in such a way as to try to keep your assets close to the expected values throughout your retirement?
Lol finally someone called these Ramsey idiots on there 7% bs and their response was that would never happen 😂
Caleb spitting straight FACTS about that 7% withdrawl rate.
It’s sad how Dave has him by the sack so much that he can’t disagree about the withdrawal rate. I understand everyone has to have the same opinion but IT SUCKS! If we wanted another Dave, we’d just watch Dave’s channel. I get it though. The boss makes the decisions. Maybe one day we will truly know what George believes cause I don’t think he agrees.
George is just waiting for Dave to finally retire so he can speak his mind and give real advise.
@@CrypticCobra I feel like Dave would still speak out.
@@larrysmith2655 your prob right, he is that petty. Let's change it to "when Dave dies"
@@CrypticCobra i agree
"tender" 😂😂🤣🤣like a hammer . He does dispense some good honest advice to people who are underwater on their finances. Good interview.
Caleb is debating George on withdrawal rate, but George does not have the authority to agree with Caleb
Absolutely want more discussions between these two!
If my finically advisor made me a plan with a 7-8% withdrawal rate I would fire them!
I love the different personalities and perspectives!
Was that a power move... Yes. 😅😂
Excellent question evasion by George