The Personal Finance Podcast - Should I Take Money From My 401(K) to Pay Down Credit Card Debt? Money Q&A

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Starting point is 00:01:26 Welcome to the Personal Finance Podcast. I'm your host and your founder of MasterMoney.com. And today on the Personal Finance Podcast, we're going to be answering a bunch of your personal finance questions. If you have any questions, hit me up on Instagram or TikTok at MasterMoney Co. And don't forget to follow us on Spotify. Apple Podcasts or whatever podcast player, you love listening to this podcast to. And if you want to watch the show, you can watch it on YouTube now at the Personal Finance Podcast on YouTube.

Starting point is 00:01:56 We are so incredibly excited to share this episode with you because we're going to be going through a bunch of your personal finance questions. And some of them are going to be how much of your income should you keep in checking versus savings? Should you take money out of your 401K to pay down credit card debt? Does it make sense? What's the math behind? that. If you retire early, do you need to live off your taxable brokerage account? Or is there another

Starting point is 00:02:21 way to do it before you actually hit your retirement age so you don't have to withdraw down your 401k? We're going to talk about how to set up your 401k so you can actually withdraw it down early. And then we're going to talk about how much money you should put into each budget category. And in addition, my favorite high yield savings accounts and advice to high school and college students who want to build generational wealth. We have an action-packed episode on Money Q&A today on the personal finance side. So we are so incredibly excited to share this with you. In addition, going forward Money Q&A, we're going to try to do it where we have the questions in categories. So we'll have one category for personal finance, one for investing, one for real estate,

Starting point is 00:03:00 one for boring businesses, some for mindset. So all of these are going to be categorized together so that you can have an episode theme each and every time as we answer these questions. I love answering these questions for you guys. I'm so incredibly excited to jump into it. So without further ado, we have a bunch of them to get to, so let's get into it. So the first one is how much of my income should I keep in checking versus savings? Now, this is a very personal question, and this is a question that's going to be very different for each person. But I am going to explain what these accounts are for so that you understand that a lot of money should be funneled through and around and moving through these accounts in certain ways so that you

Starting point is 00:03:38 can optimize your wealth building ability. So first of all, let's get into the checking account. So The checking account should be optimized in one way. And all the checking account is for is to funnel cash exactly where you want your dollars to go. So checking accounts are just receiving cash and moving cash around to the most optimal places. What do I mean by that? So say each and every single time you get paid. The first thing that you want to be doing when you get paid is you want to be putting your

Starting point is 00:04:04 money towards the things that you value most. So what do you value most? For most people, investments are a major thing because they want to put dollars towards their future value. So say, for example, your savings rate or the amount that you want to put towards investments is about 20% of your income and you make something like $5,000 when you get paid. So say you get paid $5,000, I'm just doing this for easy math, then you're going to put $1,000 towards your investment account. And say, for example, maybe you want to put some more money towards your emergency fund or your short-term savings goals, then you would do that then. But all

Starting point is 00:04:36 a checking account is for. It's not to hoard cash into a checking account because you can get much better interest rates other places. What you want to do with your checking account is just utilize it to shuffle money around. It goes towards maybe your bills that you automate. It goes towards your credit card where I put as many bills as possible on my credit card so I can travel hack my way around the world with credit card points. In addition, it can go towards putting your dollars towards any other thing that you have, any expense that you have along the way.

Starting point is 00:05:03 That's what you're checking accounts for. It's not to save money in. It's not a place that you want to keep a bunch of cash in unless you really just don't care or you feel more comfortable having a checking account, but I don't know why when there's different accounts out there that just have higher interest rates. So your checking account is the funnel. It's the funnel that takes your cash and you distribute it to the place that you want to go. In addition, then you have your savings account. Now, I am not huge on keeping a bunch of savings in my savings account at like a big bank, for example. I personally bank at Chase. I'm not pro

Starting point is 00:05:33 Chase. I'm not a huge advocate of Chase or anything like that. It's just the easiest bank to get to from my house. There's literally one in my neighborhood. So that's why I banked It's just easy. So for checking accounts, first level savings accounts, I just like it in places that are easy to get to. Now, when it comes to your actual savings, your savings goals should be for very specific things. So most of your money should go towards investments

Starting point is 00:05:55 unless you're building up your emergency fund. The majority of your money should go to investments. Then your savings should be in a high yield savings account. What a high yield savings account is, it's a savings account with much higher interest rates. So your money's going to make more money in a high yield savings. accounts. And one of the questions that we have later is which ones do I love. So I'm just

Starting point is 00:06:14 going to break those down now. Three of my favorites are CIT Bank. I love CIT Bank just because they have been a long time partner with me, so I've used them for a very long time. And CIT Bank is just a fantastic place with great rates. It's an online bank. Another one I love is Ally Bank. An ally I've been using as of late because what Ally Bank has is something called buckets. And this bucket strategy is something where as you have these buckets with your savings account, you can actually budget inside one account. So you can actually budget your money inside one specific account and each of these budget categories are called bucket. So say, for example, you have 20 grand in an emergency fund and you want to split that up maybe in three different categories.

Starting point is 00:06:56 Maybe you want it for housing. If anything happens to your house, you want to split it up for car repairs in case you want to fix up your car. And in addition, you want to make a third category just for any other rainy day emergencies. Well, you can do that in Ally and you can say, they put $7,000 in the rainy day fund. You could put $7,000 in the car repair fund and $6,000 in the home repair fund. That you can absolutely do. And the cool thing about this is it just gives you those buckets so that you can separate out your money without having to open a bunch of sinking funds or a bunch of different savings

Starting point is 00:07:26 accounts. The third one I love is Capital One. Now Capital One used to have a similar system to buckets in which I used to really love it then, but it's still got great rates. It's a large bank and something you would know like in trust. So between those three, those are my favorite. high yield savings accounts. How much should you put in your savings account? That is a question that depends on what you're doing. So emergency funds should always be in a savings account.

Starting point is 00:07:49 You don't want to be investing or emergency funds. They should be inside of a savings account always. The reason for this is because if there's a recession and say the market takes a pullback of 50%, you do not want to have your emergency fund cut in half when you need it most, which is recessions where people are most likely to be laid off. Your emergency fund is there to utilize job loss and all these are the things. In addition, you want to put your short-term savings goals. Any savings goals that you have for five years or less, you want to have those inside of a savings count. Why? Because when you have those inside of a savings count, the same reason. When the recession happens or the market takes a pullback and you need those dollars most, maybe you want a down payment

Starting point is 00:08:27 on a mortgage, for example. And when the housing crisis happens and prices of houses are really cheap, you want to have that down payment available. Or maybe you're saving up for a wedding. Well, The last thing you want is a financial crisis and you invested your wedding dollars and now your wedding gets cut in half because you don't have those dollars available. Or maybe you're saving up for a car or whatever else it is. Short-term savings goals always need to be in a savings account. Is it optimal? No. Are they going to lose value because of inflation?

Starting point is 00:08:51 Yes, but it also keeps that money safe. And the other thing you would have put inside of your savings count is that cash buffer if you have a cash buffer. But this is very similar to an emergency fund where if you want a short-term cash buffer, what I do is the bank that I bank at Chase. I have a very small cash buffer there that I keep, just in case an emergency happens and I need to get the cash really quick. I have my checking. I have the cash buffer in that savings account. And the majority of my savings, emergency fund, short-term savings goals, all go into high-yield savings account. So, as interest rates rise, high-yield savings account, interest rises as well. So that is one thing that I would definitely look at. That is the way to actually distribute from your checking to your savings account and how much money you should put in there and think through that process. All right, so the next one is, should I take out money from my 401k in order to pay down credit card debt? Now, this is a very difficult question to actually try to navigate because your real life situation is going to matter a lot in this. So I'm going to talk pretty generally here, but we did a little bit of math to show you what would happen if you actually pull down money and what the real impact of your dollars are.

Starting point is 00:09:57 So it depends on the interest rate of your credit card first and foremost. So the interest rate of your credit card, if you have like a 50% interest rate, which is I've never heard of, but if you do have like some crazy interest rate like that, then maybe it would be worth it. But outside of that, what you don't want to do is interrupt compound interest unnecessarily. That is the last thing that you want to do is one of my favorite lines to say because interrupting compound interest unnecessarily is only going to make you go backwards and it's really going to kill the power of compound interest. You want to stay invested for a very long period of time, as we talked about a number of times on this podcast and on Master Money,

Starting point is 00:10:33 the YouTube channel, all the other places that we love to produce content. The reason for this is that if you start to interrupt compound interest unnecessarily, your returns or going to significantly reduce over a long period of time. So consistent investing, staying investing forever is the thing that you definitely want to do. Now, here's what happens if you pull it from a 401k specifically. Now, if it was a Roth IRA, it's a very different math equation because a Roth IRA, your contributions that you put into a Roth IRA, you can pull those out penalty free and they've already been taxed, so it's tax free as well. Those are dollars that you contributed and you already pay tax on those dollars and the money grows tax free. But any contribution,

Starting point is 00:11:13 even before the age of 59.5 and a Roth IRA, you could pull out early. A 401K is absolutely a whole different story because you're contributing dollars that have not been taxed yet. That's the key thing to understand here. So, because of that, if you, If you withdraw any money out of your 401k, you're going to face a taxation, and B, you're going to face a 10% penalty. That 10% penalty is massive when it comes to the equation because it's a lot of money depending on how much money you have in credit card debt. Now, if you have a massive amount of credit card debt that you don't know if you can

Starting point is 00:11:45 climb out of and you're thinking, this is the only way out, this is the only way I can do this. We'll talk about a couple of other ways that I would consider first. But if that's the only thing that you can do, then maybe you want to consider it. But let's look at some of the math here. So I just did a hypothetical on $10,000. And Conrad, who is our YouTube editor, if you could throw this on the screen on the YouTube channel

Starting point is 00:12:06 as we're talking about this, that would be great. So by hypothetically withdrawing $10,000 from your retirement account, you may forego a very large amount of money. Let me break this down. So the first thing is the impact of your early withdrawal. The impact of your early withdrawal is going to be this. So say you take $10,000 out, we're going to first take that early withdrawal penalty,

Starting point is 00:12:26 which we just talked about was 10%. So that's $1,000 that you're immediately going to lose just by withdrawing that $10,000. Next, you have to pay taxes on that money. So if you're in like a standard tax bracket, say you're in the 24% tax bracket, then you're going to pay $2,400 on that. If you're in the 20% tax bracket,

Starting point is 00:12:45 you're going to pay $2,000. But I'm just going to do a standard 24% to make it easy. Say you're in a 15% tax bracket. You're going to pay $1,500. It's very simple math. That's why I'm using $10,000 because we can do it off the top of the dome, maybe. So this is the way that you can actually look at this and make it really simple.

Starting point is 00:13:00 So after you pull your money out, say you wanted 10 grand to pay off a credit card, for example. If you pull 10 grand out, the net that you're going to have out or the amount of money that you're actually going to be pulling out after taxes and fees is going to be $6,600 if you're in the 24% tax bracket. So that's not the end of this equation because you know your boy loves himself a little bit of opportunity cost. So opportunity cost is what would happen if you actually invested those dollars instead? So I just put it at a simple, modest 8% rate of return. And with that 8% rate of return, if you withdraw that money, the loss of asset growth by the time you retire, so age 59.5 is when we ran this for, would be an additional $53,000 that initial $10,000 would grow. So you're losing out on $53,000 in addition to losing out on taxes and the other money that you would have had if you would have just left that money invested. This is a massive difference where your potential that you're losing out here is something like $63,000 over the lifespan of just taking this money out, just 10 grand.

Starting point is 00:13:59 So it's over 600% that you're losing out on just by taking this 10 grand. So this is something where you really got to consider this. Now, online, I actually found some great calculators out there that will run some of these numbers for you. It was after I did all this math, but they'll actually run these numbers for you so that if you are looking to figure out. this out very quickly, you can figure it out for your own situation. So I'll link a couple of those down below because they're really cool how they actually do that so that you can figure out how much you would actually be losing based on the amount that you want to pull out. Now, what would I do instead? Instead, I would try to earn some more money to pay down that credit card debt. I would

Starting point is 00:14:36 try to earn more at my job. I would try to start some side hustles and do some other things so that I can get rid of this debt instead of incurring a $63,000 loss per $10,000. That is one thing I would look at. In addition, learning how to maybe set up a budget and see if you are overspending it in areas. Now, obviously in a lot of situations, it's harder to save more, especially now when it costs hundreds of dollars more just to live than it did last year. So sometimes this is difficult. But if you can pull out a budget and say, can you save two, three, four hundred dollars here and there so that you can start paying down that debt. That is another option that I would definitely consider just so you can get

Starting point is 00:15:13 that debt down. It's for a short period of time. In addition, make sure you check out our course coming out called get out of debt fast. It's absolutely free. I'm not going to charge for getting out of a debt course. I want to make sure that you guys check that out as well so that you can go through this process and maybe set up your debt payoff plan. That is one major thing that will set up for you as well on this. So all of these things are going to come into play. Listen, you got to stick with it. I know this is tough. I know it can be difficult to be paying down some of these debts. But I would not pull from my 401k unless you absolutely need to because you think there is no way out. So run some of these numbers. Do the math.

Starting point is 00:15:47 The math is what is going to matter in these situations so that you can make the best decision for your specific situation. I remember when I needed to hire someone fast, but finding the right person quickly felt impossible. And if you've ever been there, you know how stressful this can be. That's where Indeed comes in. When it comes to hiring, Indeed is all you need. Instead of struggling to get your job post noticed, Indeed's sponsor jobs help you stand out

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Starting point is 00:19:04 So if I retire early, do I need to live off my taxable account until I am old enough to withdraw my contributions? So financial independence is something that this is a big problem that a lot of people face, when they first learn about financial independence. Now, if you don't know what the fire movement is, what that means is that you save a bunch of money and you're able to retire early because you saved with that money, you can live off that money. But if you put it in retirement accounts, like we talk about all the time, the 401K, for example, you just heard the penalties that you can incur and all those other things. But there is something that is an absolute, beautiful little loophole that we have, and it's called the Roth conversion ladder. So the way that this works

Starting point is 00:19:41 is that what you're going to do is you're going to actually contribute 401k dollars to your Roth IRA, five years you're going to start this before you're actually going to retire. The reason why there's five years that you're going to start this is because there's something called the five-year rule where you cannot withdraw funds that you have contributed or converted over for at least five years. So you want to do it five years ahead of time before your financial independence journey begins because that's when you're going to be able to actually access those funds. So I'm going to actually illustrate this as well. If we could throw this stuff on the screen as well, that would be awesome if you're watching on YouTube. If you're listening on

Starting point is 00:20:16 the podcast, then absolutely check this out later on. But this is what a Roth conversion ladder can look like. I'm going to describe it here as well. So let's say, for example, you are in the year 2020 and you want to retire in 2025. So you want to retire in the next five years because you've been saving. You see the target there. If you get that 8% rate of return, then you're going to be able to retire at 2024. You want to give yourself a one year cushion, for example. So having that one year cushion is major when you're doing your retirement planning. But let's say, for example, you want to retire in 2025 early. So you're going to retire early before age 59 and a half because if you pull that money at 59

Starting point is 00:20:49 and a half, you are going to get that penalty and you do not want to face that 10% penalty as we just saw doing the math earlier. So let's say, for example, you want to live on $50,000 a year to make the math easy. And then you're going to increase it a few percentage points based on the inflation rate. So what we're going to do is going to show you how much you're going to convert from a 401k to a Roth IRA. And you could do this in your brokerage. So say, for example, you don't have a Roth IRA. I would just open it at the same brokerage because it's very easy to do that.

Starting point is 00:21:17 So say if your company's 401k is at Vanguard or you're going to roll the money over to Vanguard, then I would just keep my Roth IRA at Vanguard as well because it's very easy to convert back and forth. So say for example, in 2020, you convert $50,000. So you can't access that money till 2025. So that's why you want to do it now so that when you retire in 2025, you'll be able to touch that money, be able to access it penalty free because remember, our contributions to a Roth IRA are penalty free.

Starting point is 00:21:43 So you're going to convert money over and the net amount that you want is $50,000. You will pay taxes when you convert that money over because it's going from a 401k that was not taxed to a Roth IRA that has already been taxed. So you've got to pay taxes in between. So you're going to do the math in between to figure out what it is, but I'm just doing this for simplicity. So say you convert $50,000 over and then in year two because of inflation, you convert net $52,500 over in 2021. Then in 2022, you convert $55,125. So you can access that later on. Then in 2023, 57, 881, and $2024, $60,000.

Starting point is 00:22:23 So these are only raising because of inflation rates. You want to just raise it a little bit because of the inflation rate over time. Then in 2025, you're going to contribute $63,814. And in 2025, you can now withdraw $50,000 from your Roth IRA. You can actually withdraw more if you started to contribute to a Roth a lot long time ago, but if you don't have a Roth, you can contribute $50,000 because you put that in in 2020. And then in year two, you contribute $67,000 and you can withdraw $52,000 because in 2021, you put $52,500. And so in 2026, you can live on $52,500.

Starting point is 00:23:04 This is just an illustration of exactly how this works so that over time with this Roth conversion ladder, you are going to be able to live on the money, but you've got to focus on that five-year rule and make sure you understand how that five-year rule works so that you can optimize this and do this in a safe manner so you can live off that money. Now, like I said, every contribution that you put in a Roth, you can withdraw penalty-free anytime. So if you have a Roth for the last 20 years, for example, and you've been putting in five, six, seven thousand, whatever the limit was in those years that you were putting the money in, then you'd be able to withdraw those contributions as well the first couple of years. So say you got two years before you want to retire. Well,

Starting point is 00:23:41 some of those contributions can be withdrawn so that you can live off those for those two years. And then the next couple of years, you want to make sure that you are converting over so that you can have that five-year rule into place. Now, the reason why you'd want to do this in a latter format is because of taxes. So if your tax rate is pretty high when you're about to retire in a lot of people who are pursuing financial independence, their tax rate goes up over time, their income goes up. and so you just want to do it in piece by piece so that you're not paying crazy amount of taxes on that as well. So that is how that works.

Starting point is 00:24:15 We have a full episode on this as well if you want to hear where we deep dive into the Roth conversion ladder, but that is a quick overview. And that is the way I love for people to look at it. And that's the power of the Roth IRA as well, while you always want to have a Roth, even if you're getting close to those limits because having that Roth open

Starting point is 00:24:29 is something that's going to help you when you reach financial independence. So the next one, How much should you put in each budget category? So this is one that is going to be very specific to your current situation. So I can't tell you exactly how much to put in each budget category. What I can tell you is we've had episodes on how much to put in your savings, count by age, all those types of things. So you can follow some of the rules of thumbs that we talk about.

Starting point is 00:24:54 There's a couple of different budgets you can think through. There's the 50, 30, 20 rule, which is a way where you can actually put money in different categories and understand how to set up your budget that way. but the way I like to do it more is to think through each kind of sector of a category and look at this in a way that is going to fit and mold to your lifestyle. So some rules of thumb. 30% or less of your net income needs to be going towards housing. The less, the better, but 30% or less of your net income needs to go towards housing. More than that and you are going to be house poor.

Starting point is 00:25:26 Another rule of thumb to think about is 20% or less needs to be going towards transportation. So transportation is a major cost, obviously, and that's one thing where you want to make sure you keep that as low as possible. 15 to 20 percent towards food is another big one and making sure you keep your grocery budget under control, especially if you're just starting out, groceries can get really out of hand. And a lot of people are so shocked when they look at their budget and their grocery bills are usually sky high. So that's one thing where a lot of people overspend. So looking at that one is a key one as well. And that's groceries in addition to eating out, that kind of stuff. And then 10 to 15 percent for fun money. So,

Starting point is 00:26:01 making sure you still allocate dollars towards fund money is another thought process to go through. And then making sure you just have all of these lined up and in addition, the rest, having money in place for your bills and all those other things as well. So this is something where you definitely want to kind of create ground rules around and then you figure out what you value. What do you value most in life? That's the first question to ask yourself because what you value is what you want your dollars to be going towards.

Starting point is 00:26:27 So if you value something, it is something that you really truly believe that you need to be spending your dollars on because it brings you joy, then you need to figure out that first and then build your budget around that. If you value travel significantly, then learning how to travel hack in addition to saving a lot of money towards travel, it's something you definitely want to do because you want your dollars to do what you want them to do. That is the most powerful thing that you can do with your money is ensure that your dollars are going exactly where you want them to go. So this is another thing to think through as you set up these categories. But for each person, it's going to be very different. So decide what your values are first.

Starting point is 00:27:01 then allocate your dollars towards those categories and then build your budget and your lifestyle around that. That is the best way to look at this, but also ensuring that at least 20% of your income is going towards investments. That's the last piece that we want to talk about here. And the first thing you should be doing, but making sure that your dollars are going towards investments. And what I mean by that is income producing activities. So things like your emergency fund, your investment account, or any other thing that is going to help you raise your net worth. So that is what that means as well. But 20% or more is. is the key here so that you can actually build well.

Starting point is 00:27:34 So the last one is what advice to high school and college students which you have who want to create generational well? So this is one that we are passionate about as well because the sooner you learn this stuff, the better off you're going to be with your money because you can start get your money working for you. And that is what we are really passionate about is making sure that people can get as much money as possible as early as possible working for them. So the first thing I would say is learn about financial independence in the fire movement

Starting point is 00:27:59 because this is something that is not taught, which really should be taught as early as possible. So one great book for this is First to a Million by Dan Sheeks, and Dan was on this podcast, but this is a financial independence book for teenagers. It is one book that is really going to be life-changing, I think, for a lot of people who read it. So that is a fantastic book, but learning how the financial independence movement works and learning that you can save up a certain amount of money, live off that money forever, and then you can do other things that you want to do, maybe build businesses, or you want to spend time with your family or travel or whatever else you want to do.

Starting point is 00:28:33 That book kind of helps you walk through that process to learn how all the basics work. And obviously, this podcast is going to teach you that as well. That's our main goal is to teach you how to build wealth. So listening to this is going to be helpful on the fire movement side as well. The next thing you want to do is learn how to invest right now. Every dollar you can invest right now is going to be so much more valuable than, say, somebody in their 30s or 40s who are investing your dollars. In fact, people even in their early 20s, every single dollar they invest is worth well over $80 every dollar that they put towards their investments. So you want to make sure that you're

Starting point is 00:29:03 investing as early as you possibly can. Now, learning how to invest is one thing and making sure, and this is very hard when you're young. I even did it where I would invest in like penny stocks and things like that. That was the craze back then. But learning how to invest in assets and not speculative investments. So speculative investments would be things like gold, crypto, things that don't have an intrinsic value or a value backed by finances. And there's things out there, there's a lot of things out there that are like that. You can put a small amount of your portfolio and stuff like that. There's nothing wrong with that. But making sure your real dollars, your real investment money is going towards things that actually will grow over time.

Starting point is 00:29:39 That is the first thing that you definitely want to be doing when learning how to invest. In addition, you can do this with real estate investing as well. So real estate investing is a fantastic thing that you can be doing where you build up your skills now, maybe even work part time for a realtor or some real estate company or a builder. So you can start to get your feet wet and learn how the real estate business actually works out, be something amazing for you. So another thing I would consider is getting a job in a field that you're interested in. So getting an internship or a job, instead of going out and doing what everybody else does, which is, you know, driving for Uber or DoorDash or going out and working for a restaurant or the local supermarket down the street,

Starting point is 00:30:16 get a job in the industry you're interested in. So the same thing would go for that real estate agent working for a real estate agent if, for example, you wanted to go out and become a rental property investor or you want to learn more about real estate. Or if you want to get in tech, maybe you reach out to a company and see that they have internships available. But you want to make sure that you're building up the right skills early and often so that before you go to the real world, you can actually be able to have these skills available to you and actually see how some companies actually operate. The earlier you learn this stuff, the more valuable you're going to be later on and you can earn more money just by learning that stuff early on. So I absolutely love the idea of doing that

Starting point is 00:30:52 as well. That is a great place for a lot of people to start. And I wish, I did the same thing. Then you want to build up some skills that are going to help you earn more. So building skills is the way to earn more money. And we talked to Nathan Barry on this podcast. And what we talked about there was how you can build up skills in a systematic way and the framework around that. So building up your skills early, the earlier you do this, the further along you can get later on. So skills that make a lot of money are coding, copywriting, things like video editing. There's a bunch of different things that you can do, but looking at the skills of what you want to pursue in life. And if you don't know, just learn skills that make money. You can look up

Starting point is 00:31:27 a bunch of different lists. We have videos on YouTube talking about the skills that earn the most money right now. But looking up some of those skills and saying which ones of these might actually interested in and which ones would I like to learn so that I can have those skills available to me when I hit the real world. So that's another option. And then lastly, learning how to manage your money. I've told the story before about how I didn't know how to manage my money very early on in my career. And it really bit me for the first couple of weeks where I couldn't even fill up my gas tank at one point. And that's the turning point that made me turn it all around. But learning how to manage my money is the thing that really turn the whole thing around and getting that budget

Starting point is 00:31:59 together and all those other things. So those are the core principles that I would look at first so that you can start building that generational wealth, building that foundation, because that foundation is what is going to really help you going forward. And having those skills in place because your income, remember, the income of the side of the equation is the most important thing. And then learning how to keep that income is what's going to change your life and change your wealth trajectory. I hope this helps and this is one of my favorite subjects as well because I just think it's going to absolutely change the way you think about money. Listen, I hope you guys enjoy this episode of Money Q&A. If you guys have any questions, make sure you hit us up on Instagram or

Starting point is 00:32:36 TikTok at Master Money Co. And in addition, don't forget to sign up for that Master Money newsletter and be looking out for Index Fund Pro. We are so excited to be releasing all this stuff for you guys and so excited for you guys to start building wealth, and we will see you on the next episode. Rosen lasagna, medium power, 15 minutes. Sounds like Ojo time. Let's play. Feel the fun with Play Ojo,

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The Personal Finance Podcast - Should I Take Money From My 401(K) to Pay Down Credit Card Debt? Money Q&A

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