The Rachel Cruze Show - Proven Budgeting Habits for Building Long-Term Wealth

Episode Date: January 8, 2024

Building wealth is easier than you think. This week, I’ll weigh in on the “soft saving” trend and share some investing tips that will set you up for success in 2024. Plus, George Kamel joins me in the studio to tell you about how he went from negative net worth to millionaire in just 10 years. What you get in this episode: Why Gen Z May Never Retire How to Break Free From Broke (with George Kamel) 7 Investing Mistakes to Avoid This Year Helpful Resources:  Preorder George’s new book, Breaking Free From Broke. Start budgeting for free with EveryDollar. Learn more about Christian Healthcare Ministries. Sponsors pay the producer of this show, The Lampo Group, LLC, advertising fees for mentioning their services or products during programming. Advertising fees are not based upon or otherwise tied to any product sale or business transacted between any consumer or sponsor. The following sponsors have paid for the programming you are viewing: Christian Healthcare Ministries. Learn more about your ad choices: https://www.megaphone.fm/adchoices Ramsey Solutions Privacy Policy: https://www.ramseysolutions.com/company/policies/privacy- policy Learn more about your ad choices. Visit megaphone.fm/adchoices

This entire system is designed to keep us broken. It's all very intentional. And they're all in cahoots. But you really believe it. The credit scores and the credit card companies and the credit bureaus, everyone's in on it because they're all making money off of us. And you become this rat in the maze. Hey guys, welcome to this episode of the Rachel Cruz Show podcast.

I'm so glad that you're here. So in this episode, I'm going to talk through proven budgeting habits for building wealth long term. I'll go over seven investing mistakes to avoid this year. then you're going to hear a conversation I had with my friend and fellow smart money happy hour co-host, George Camel, on how to break free from broke. But first, let's chat about why Gen Z may never retire and what we can do about it. Take a listen.

Well, hey, you guys, I recently saw an article saying that Gen Z expects to be able to retire by 61, which obviously sounds great at first, but then I started to wonder, are Gen Zers actually doing what it takes for them to be able to retire by that age? And what are the rest of us facing in terms of retirement? Will millennials ever get there? So I'm going to share all of my thoughts and all of the data, plus some investing advice to give you a leg-op. All right, according to a recent Yahoo finance article, on average, Gen Z adults reported that they expect to retire by 61. But there's a catch. 99% of Gen Zers between the ages of 21 and 26. also reported saying that they face obstacles when trying to save for retirements more than any other

generation. Small percentages of older generations reported feeling challenged to save for retirement, 88% of millennials, 91% of Gen X, and 86% of baby boomers. You guys, that's a lot. And on average, millennials expect to retire by age 64, Gen X by 65, and boomers by 68. Another article that I saw recently says that Gen Z is hopping on a trend called soft saving. So apparently retiring is out and soft saving is in. Gen Z years between the ages of 18 and 25 are taking a more relaxed approach to their long-term financial plans by pursuing experiences that promote personal growth and emotional well-being. A report found that this age group is more interested in living in the moment than

retiring early or at all. I mean, some of you might be thinking, well, who cares about Gen Z anyways? They're young and they're clueless and still have decades until they have to retire. So let them learn the hard way. Now listen, there is a time and a place for tough love, but a little compassion. It's what we all need to. And it's rough out there. And clearly our Gen Z friends are feeling it. Plus, at the end of the day, the younger generations are the future. So these are the people who will eventually be shaping our world. And that means that we need to be wise. And especially those of us who are parents and we're thinking about our kids' future, we want to care about if there's bad financial education out there and have an effort to change it. And maybe our Gen Z friends

need a little bit of a reality check, a little pep talk, which is what we're going to do next. All right, Gen Z pals, gather around and listen to your old millennial bestie, Rachel. Like anything in life, there's a balance and it's totally valid. Want to protect your mental health and pursue memorable, meaningful experiences and travel. Like, I get it. But there has to be some discipline along the way. And the good news is that once you commit to making wise financial decisions all the time, it'll shock you how quickly you start to build more margin for the things that you

really want. So if I had to boil it down to the number one thing to keep in mind about investing in retirement is to stick with what's been proven over time. So listen, going back to tried and true teachings, looking back at track records, seeing data, seeing the history of stuff is really important. And it might sound cheesy, but I truly believe that no matter what stage of life, career, or financial journey you're currently in, there is time to change your habits. And regardless of all the scary headlines out there, there are things that you can do actively to create a better, more stable future for yourself. But listen, if you are not following the seven baby steps,

I would encourage you to do that. Because once you're out of debt and you have a fully funded emergency fund, this is where investing becomes a beautiful thing in your life. Because I encourage you to invest 15% of your income into retirement. So this could be your 401k at work or your 403B, your Roth IRA. So remember this phrase, match beats Roth, beats traditional. So the first thing you want to do, the very first thing is to put a percentage up to the map so your employer has. So in your 401k at work, if they match up to 5%, you match 5%. That means you have 10% left of that 15%, then go over to your Roth IRA and fill it up with cash. Now, if you filled it up and max it out for the year and you still have a percentage of your income left, go back to your 401k and max it out. And then for all you high

rollers out there, if you've done all that, you can do your HSA, a health savings account, actually use that for retirement. So there's other vehicles that you can use when it comes to investing. But always remember, invest 15% of your income into retirement. Listen, even if you're doing that and you're doing this and all the things, none of that really does matter without contentments. Because let's face it, you could technically be winning with money and still not be living a life with peace because you are just chasing and chasing and chasing and money plays a role in our lives. It is very important because sometimes it can be a huge role because you're stressed and you're living paycheck to paycheck and you don't know what to do. So you're like obsessed with it because you just feel like it's collapsing in front of you and you're freaking out.

It can play a role like that or it can become a thing that you just chase after. And it's the only thing you look at in life. And you're like, I just want more and more and more and more. Well, let me tell you, the finish line never moves. You think, if I could just make $80,000 a year, I'd be fine. Then you make $80,000. And you're like, okay, that becomes normal. And they go, if I just made 100, 100.

And you can keep moving up income. You can keep moving up lifestyle. You have to understand, everything keeps moving. You get used to where you're at. You will always want more. And there's part of that ambition that's not bad. I want you to have goals and be working to something. But it's this obsessive nature.

And you just think, if I can just have this, everything's going to be okay. And it's not. Everything needs to be okay with where you are today. From an emotional standpoint when it comes to money, that way, when you actually start winning with dollars and cents and you're investing, and you're being smart, then that contentment is magnified.

So no matter how many baby steps you check off the list or savings goals you hit, if you're never content with what you have, you will never truly be fulfilled. There's not this magic number that you want in savings or retirement. That's going to solve all your problems. So start with gratitude, move into generosity, be a generous person, and find that contentment because that is stable, that is something in your life that will be with you no matter what. And listen, being a responsible, adult when it comes to your money may not be the most exhilarating thing right now.

But trust me, it pays off big in the long run. And the best tool out there to help you build a budget and build a future you want is every dollar. Every dollar is one of the best budgeting apps out there. I'm telling you, it is amazing. It helps you when it comes to your budget. It helps you get control of your money and do the things that you want to do. Hey guys, I am so excited because today, my friend and co-host of Smart Money Happy Hour and

the Ramsey Show. And it says one of my best friends. Wow. I like the, someone on the team decided, you know what Rachel? I think they're on BFF level. Their BFF level is here.

George Campbell, thanks for being here. It's an honor to be on your side of the set. Because fun fact, Smart Money Happy Hour films right on that side of the show. Right there, yes. And we switcheroo on this side. This feels, to be for, in Rachel's world. This is a much more family-friendly side.

I will say that. Do you feel like you're in your living room? I do. It's a very cozy couch. We just chatting it up. I do miss the armrests from some more than a many happy hour. I will say that. The chairs. Yeah.

Armrests are fantastic. And I don't have as much lumbar support. There's a lot of sitting up in this couch. But it's fun. The posture is key. Well, George, something exciting is happening in your life. What's that? Multiple things.

First and foremost, we'll just say, because you're here, talking about your new book, Breaking Free from Broke. I'm so excited about it. I actually brought it with me, Rachel. Did you wear this? There it is. It's like Tennessee Vols. Let's go.

I know. Deloni and I were on the Ramsey show talking about it. You're welcome. It's so kind. And we were like, look at George. Just pushing away the lies. We're pushing back against the system, Rachel. Just push back against the lies of the industry. It's the only way. All of the arm strength I have was used to break free from the system. So good. Well, you talk about in here how you became a net worth millionaire in just 10 years without getting tricked by the system. And I just said just 10 years. Like, 10 years? Like, it's a decade, right? So it takes some time. It's not quick. It's an eternity for.

some of the youngsters watching out there. Yes, I know. So we're going to talk about that because the longevity is important and not just the skit-rich-quick stuff, which you talk about in your book too. But again, you have so many resources, George. You've done such a great job tackling this topic of money that can be really complicated, really intimidating,

and you do it in such a great way. And you break down exactly how to be wise with your money, even if you're never taught some of these basics, and you do it again in the George way, which we just appreciate it. So this book really is, what, for millennials, Gen Z, Like when you were thinking about the audience as you were writing it, who were you picturing? I was picturing me kind of graduating from college, entering adulthood into my big boy job, feeling frustrated and anxious and cynical toward adulthood.

Because I did everything that everyone told me to do. Go to school, get good grades, go to the college of your dreams and get the degree. What I didn't realize that when you use Sally Mae's Monopoly money to fund it, and you start getting trapped in all the cycle of credit scores and credit cards, and I need the car loan because I'm a big boy now, and I should get a... house because renting is a sin. All of those feelings that we have entering adulthood, I want to just go, this is a much more peaceful way to do it, where you can break free from that toxic money culture and all of the myths that we believe growing up. Yeah, and it is amazing because I'm like

there are so many just subtle messages like that. Like, just go to your dream school. If you get a college degree, you're going to be fine, right? It's all these like things that you're hearing from good intentions, people, whether it's well-meaning, most of them. Parents or whoever, society. And you listen to it. And then as you experience it, you think this is not at all. What I expected. Yes, exactly. Okay, so there are hundreds of kind of like finance books out in the space. And here at Ramsey, like we write about this stuff a lot. You've heard many of them that are great. We just right. Yeah, about money. So what would you say this one is different? Well, number one, my perspective coming from, you know, having immigrant parents and growing up in a very average middle class household and going into debt, student loan debt, and credit card debt, falling for these traps and then sort of deprogramming as I went through Financial Peace University and started working here.

So that perspective alone, but I've done some more investigative research at Ramsey through podcasts like Borrowed Future and the Fine Print. And I love unpacking exactly why these companies are so scummy, why these industries are designed to keep you broke. So that's the first two-thirds of the book. And that's something we've never done here at Ramsey. Yeah. It's really gotten to every objection, all of the stats, the research, exactly how the credit cards make their money, how to live life without a credit score in so much detail, because I wanted you to walk away knowing exactly what to do, on top of believing that you could do it. Yes.

That's the first two-thirds. And the last third is me, you know, my version of the Ramsey plan, showing people how budgeting is freedom and how margin is breathing room and spending is self-control and wealth is patience and generosity is joy. All of that with some real tactical steps that you walk away with a little smile on your face ready to kind of buck this system and build wealth on your terms. Yeah, that's what I appreciate about you, though, is you get into the details of all of this. Because we can say, like, stay out of credit card debt.

And you're like, okay, well, I'm going to take that one avenue and dive like, 100 levels down, and what does that mean? And not just how to do it, like you said, but what did the credit card industries, what is it about? Like, what are their marketing schemes? Who's really paying for the rewards? Yeah, like what's really going on in that one sector of the finance space? And so you do such a great job.

I have a friend, Rachel, who's, he's obsessed with credit cards. And I love him. We like to hang out and argue, but I had him read this chapter and he said, this is the most compelling argument I've ever seen. No way, George. Against using credit cards. And it was such an honor. I was like, that was my hope.

If I can get the most credit, the people who love the credit cards to be like, this guy's got a point here. Yes. We're on to something. And I do it all with a lot of humor and empathy. There's a lot of pop culture and music references. So it feels like Smart Money Happy Hour and my YouTube channel where there's a lot of snark and humor to keep you, keep it conversational. Keep it enjoyable.

It doesn't get too heavy. For sure. Well, you talk about one of the chapters breaking free of the system. That's kind of what we're talking about here. But again, unpack that because the system, it is so much bigger than what we think. And we kind of just, I feel like unintentionally, you kind of just fall into it and kind of live and believing the messages they say and living the direction that they're taking you versus saying, okay, stop, stop, why are they doing this? Where am I the pawn in their game?

And what can I do to actually better myself and not them? Well, Rachel, I know you love a good conspiracy theory. And this is kind of, this is my conspiracy theory, is that this entire system is designed to keep us broken. It's all very intentional. And they're all in cahoots. But you really believe it. The credit scores and the credit. card companies and the credit bureaus, everyone's in on it because they're all making money off of us. Yeah, and if you stay broke, you're going to keep going back to them and they're going to make

more and more money off of you. And you become this rat in the maze. And so, you know, in this breaking free from the system, this is chapter nine. So I've unpacked the entire system, credit scores, credit cards, student loans, auto loans, mortgage traps, investing traps, marketing and consumerism. And now we get to the point where we're shifting of like, you know too much now. And so this breaking free from the system is, I make the analogy of the matrix, the movie, where it's blue pill or red pill. And one is going to take you out of the matrix so you can see the simulation for what it really is. And so that's my encouragement to people is to wake up and recognize that this money game is a giant simulation and is not remotely serving your best life. So it's time to break free from

that money matrix and reclaim what you've been robbed of. And people don't have options and peace and margin and joy in today's world. They're telling us on social media and calling the Ramsey show, they're drowning in debt payments. They're feeling the pain of inflation and the housing market's out of control. And I just wanted to give people hope because we're getting real cynical as a culture. And cynicism is a choice and you can make it. But it's the easy choice. It's harder to wake up and go, fine, I'll do the budget. Fine, we'll get out of debt for the next two years. Those are hard choices, but it's so worth it on the other side. Yeah. And I love that picture of the system, though, because I'm like, it is funny. I'm like when you graduate from

high school or college and you really become an adult, you're like, oh, I'm out of what my parents, you know, are telling me what to do. Do what I do? Do what I want. want. I can do what I want, right? And then you fall into this mindset still of like, oh, who's going to take care of me and who's in charge and I'm going to follow what they say, right? And you could say the government, the financial industry, like you can put all these things, right, though, into place. And people look to those people or those systems to say, hey, I want to live my life, how should I do it? And you still tell me what to do, right? And it's kind of like this, like, breaking of everything of like, your parents aren't telling you what to do. So why should a bank tell

you what to do? Like, truly, owning your own story and your own life and your own decisions where you're like, no, no, no, I'm the boss and I'm telling everyone else what to do, right? I mean, it feels powerful versus being like that second level. You feel invincible when you realize that it's in my control now. It's not up to the lender or the government to save the day. And so it's a very empowering feeling. And most people have lost that hope, truthfully.

They've just resigned to the fact that I'm going to always have these payments in my life. This is just the way it goes. And they just become yours. And so I want people to break free from that and have more joy than ever before and more confidence for their financial future. Yeah, and autonomy and all of it. I love it so much. Okay, so there's so many, like gimmicky, get rich quick, Instagram, real, like, and I do this for a living. I literally will think for like a hot second, wait, do they know something. Yeah, do they know something I don't know. Wait, wait. What is this? What is this? Use your life insurance when you're alive and that's what rich people do. You know, I mean, yes, I know. But you sit there and you watch it and then I'm like, oh, my. my gosh, okay, now I see what they're doing. But it is so easy to get sucked in because it feels like a get-rich-quick thing, right? And get-rich-quick, I feel like that's saying, I don't know much how many people use that in day-to-day language.

Sure. But at the heart of it. The idea is that it's easy. They don't want to wait 20 years. Oh, my gosh, I just have to sign up for this one policy and do this. Buy this course? And then I get, like, all of this. Oh, that's the missing piece.

Like, it feels like there's this missing piece. And if I can find it, everything's going to be easier, right? So these people that have all of these gimmicky ideas about money, they are persuasive. Oh, yeah. What do you say to that? So I have a whole chapter in the book on investing traps. And Rachel, it just kept going. I was like, oh, gosh, so what about we have to talk about this?

So I talk about crypto and NFTs and permanent life insurance. And I break down all the different types of whole life and single stocks and gambling. But then there's sports betting. And there's investing apps and microinvesting. And what about precious metals like gold? That's made a comeback. And leverage real estate. And so I break it all down with short.

short, simple paragraphs with my hot take. So I kind of give you a little, just like, here's the one sentence spicy tweet about this that's trapped in your brain. So I've said cryptocurrency is Mary Kay for young men. And I break down why that is. I'm like, here's all the analogies and the Venn diagram of how they all cross over. So it's a really fun take, but it helps you walk away going, oh, I can just be confident in my investing strategy, even though there's all this noise over here about these 17 other things. Right. Because there's, it's so many distractions out there, and building wealth is so simple if you just be the tortoise instead of the hair

chasing after the next thing. Yeah, absolutely. And you said this at the beginning of the episode today, but it is so powerful because you've walked this. It took 10 years, and again, people want it faster than even that. But it's also impressive on the other side because you talk to people that have been adults

for 30, 40 years, and they're a negative net worth, right? So while 10 years can seem really short to some of you or really long, to others, kind of talk me through, like, what was challenging me about that time? And now that you're on the other side of it and you're actually writing about it and writing a book about it, like, what about that emboldened to you where you're just like, I have to get this out, this message? Well, there's a piece of it. The hardest piece for me is that paradigm shift,

where you're willing to take in new information that is perpendicular to everything you were told and believe and maybe your personal experience. That's scary, right? Yeah, it's jarring. I mean, when you hear some of the stuff, you're offended, when you tell people, you can, you should live life without a credit score. Because it's a waste of time, and you can cut up the card and use your debit card. It's triggering emotionally. So that's the hardest part.

If you can make that shift and be willing to follow a different plan because your plan hasn't been working, that was the hardest part for me. The other hardest part was, you know, debt payoff is exciting, but it's also grueling. The sacrifices that we made, both in Baby Step 2, paying off my own consumer debt when I was single, in Baby Step 6, when my wife and I were paying off the house,

there's a lot of sacrifices. And your friends are going, what, you can't go out with that? No, we're trying to do, we're doing a no spend month. So we're trying to save money or we're not going to go on that trip to Europe. And there's a lot of that, you know,

FOMO and YOLO. And we still enjoyed our life. And so I want to make it clear to people that while you're making these sacrifices, we still had a great time. Sure. You know, we were eating out and we went on the vacation,

but there was some parameters we had to put around things because we had an aggressive goal to be totally debt-free in our early 30s, no house payment or anything. And now the things we get to do and the stuff we can have and the experiences and the way we can give is incredible for the rest of our lives. Right.

And so, but that short-term sacrifice looks weird to the culture and it's something you just have to go, this is not for a, this is for a season. Yes. On the other side, we're going to have so much freedom, so much margin. So as we close, I just want to ask one last thing, what is like the one part that you feel like, this is the game changer? Like, this is my favorite part of the book. Like, what's that one thing that you're like, people need to know this? Aside from the credit card chapter, which I work really hard on, I go through eight personality archetypes of like the things we've heard, Rachel.

I've never paid and I'm an interest. And so there's like the rewards redeemer and the perfect spender and the world traveler, like all the reasons. That one was personally fun to just hit all those objections with humor. But I do think in the marketing itself control chapter coming out after the marketing consumerism, I talk about the smart spender plan. A five question filter you can use to make smarter spending decisions. And to me, it's so tax.

because you can use those five questions every single day. And it's S for self-awareness. Am I buying this? This is going to add value to my life. M is for the motive. Am I buying this for the right reason? Okay. A for affordability.

Do I have this in the budget? Can I pay for this in full in cash? R for research. Is this the best option retailer in price? Okay. Rachel's still working on this one. Yeah, it's not really my. I help Rachel.

It's not my spiritual gift to research. I see it. I want it. I just see it in his spot. There you go. I'm smart, smart. Smart. Smart.

Smacked. Smat. And then the T is for timing is now the time to buy it. So think about opportunity cost. Can I wait until next year, until Black Friday? And so those five questions you can do in your mind really quickly, but it's helped me personally to avoid the impulse purchases or the purchases I felt pressured to do.

And I didn't do the research. Let me just take a pause. Let me sleep on it. Let me wait till tomorrow. Yeah, we can wait till next year. All of that has helped me build well faster because I'm not distracted by impulse spending. So good. George.

Love it. Amazing. Thank you. I'm so glad. I'm so glad you wrote this book. Get this little. Get this little guy out here. There it is. Okay.

Breaking free from broke. Where can everyone buy it? You can get it at Ramsey Solutions.com slash store. Before January 16th, you can get all of the bonuses for free, including the audiobook, the e-book, a free talk I did called Show Me the Money. We also have a live online event happening. And on top of that, whether you buy it before or after, as my gift to the readers, you get three months of every dollar premium for free. Oh, nice. For new users only.

So it's a great way to actually put this plan into practice through something Rachel loves, which is budgeting with every dollar. And it's a great thing to get for that family member, that friend who's maybe new to the Ramsey stuff. And this is a great wading into the waters with humor. It's conversational. Easy to read. It's wonderful. Whether you're 25 or 55, it's like money 101, 201 and 301, and 3.1, stuff you never learned.

I love it, George. I'm so excited for you. Thank you. So fun. Thanks for help us, brother. Yeah. I mean, so much time. an effort goes into something like this.

And so I know you're excited to get out into the world. You can check out George on all the socials at George Camel, his YouTube channel as well, and Smart Money Happy Hour that we host together. Our personal favorite. So make sure to check that out too. It is the start of a new year, which is really exciting when it comes to your money,

because no matter where you were financially in 2023, now is a new year, new hope, new possibilities. It is so great. So you've got 12 months of budgeting, saving and investing in front of you. And I want to make sure that you are set up for success. So let's talk about some mistakes that you need to avoid to win with investing, specifically in 2024.

So the first investment mistake to avoid is investing before you're ready. Yes. So investing before you're ready can really slow down your progress and other areas of your money. So when we talk about the Ramsey Baby Steps, we always talk about the first couple that are really important. And that's to be completely out of debt, consumer debt, and have a fully funded emergency fund of three to six months of expenses. So once you have that baseline set, then you can move on to investing. And a lot of people want to keep their company match for retirement and different things, which I get, because when you run the numbers and you see compound interest and you're

thinking, oh my gosh, it's going to take me two years to get out of debt, another 12 months to save my emergency fund, you know, that's close to almost three years of non-investing. And that freaks people out, which I hear you. But it's amazing when you are so focused with your income, especially on those two steps, you get through them so much quicker. And it sets you up for a strong financial foundation, which is what we are going for. So then after that, you can start investing. And when you start investing, which we'll talk about later in this video, make sure just not to like go all in with like the single stocks or like the Robin Hood app, which is like can be really addicting because you're like, oh yeah, I can like basically trade out stocks whenever or

cryptocurrency, all this stuff. You want to make sure that you're investing in things with a long track record. All right, the second investment mistake to avoid is keeping your emergency fund in a traditional savings account rather than a high yield savings account. So with a traditional savings accounts, again, you're not going to make as much on your money versus a high yield or a money market account. So when you have your three to six months of expenses, we do look at this account more as insurance, not an investment. So I don't want you investing that amount of money into the market because I want you to be able to get to it quickly if you need it. And again, this kind of like hurts some people because they see that amount of money and they're

thinking, oh my gosh, if I invested that, you know, in index funds or in the market, I could make, you know, 9, 10, 11 percent. And it's just sitting here in a money market account or a high yield savings. But that's the point. We want to be able to get to it quickly. So for that, that amount of money, let it sit in one of those accounts. But again, instead of just a traditional savings account, do a high yield or a money market because you're going to be able to still get it if you need it, but it's not invested in the

market. All right, the third investment mistake to avoid is not investing in real estate when you're able to. So once you're out of debt and you have a fully funded emergency fund, buying a house is the next best step for you. So when you look to save for your down payment, you want at least 5% down. And this is a big part of your whole financial picture because investing in real estate and in your primary home is something that's a really great. for your money. And a lot of people want to rush the step. They want to go and buy a home when they have tons of debt and no savings. And that's not a good plan because then your house becomes a burden and a curse rather than a blessing. So you want to be in a financial position when you are

ready to buy. But then when you are ready, do it. Do it. I mean, it is such a big part of your financial picture is owning a home. And it's a great place to put your money. Now, real estate is something that a lot of people talk about with investing. But I would not go beyond your just primary with investing in real estate until it's paid off and you have money, cash to go do some real estate investing elsewhere. I would not want to take on debt for any of that. All right, the fourth investment mistake to avoid in 2024 is investing less than 15% of your take-home pay in retirements. So once you're out of debt and you have that fully funded emergency fund, that's when you want to invest 15% of your income. And you want 15% of your income, no less.

15 is a great point. And you don't really need to go more on top of that 15%. until after kids' college is taken care of and your house is paid off, then you can go max out everything else. But that 15% is really, really key to start. So when you look at your 15%, the way you can kind of break this up is if your company matches, let's say, 6%, okay, or they match 5%. So they match, that 5% that they match is not included in the 15%. It's the 5 that you put in. So you put in 5% up to their match. That means you have 10% of your income left to invest. So a Roth IRA is a great, option there. And if you max that out, you can go back to your 401k. And the fifth investment mistake to avoid this year is not taking advantage of an ESA or a 529 for your kids college. So again, once you're

out of debt, have that fully funded emergency fund and you're investing 15% of your income into retirement. Kids college is the next step. And so there's some great options there for savings for college. So an ESA is an educational savings account. And it's a great option, but you can only invest up to $2,000 a year. And there's an income limit. So if you make a certain amount of money, you will not qualify for an ESA. So if you want to invest more than $2,000 or you don't make the income requirements for it, a $529 plan is another fantastic option. And in fact, a $529 plan really is one of the best places to put your money for your kids college or for any educational expenses. The sixth investment mistake to avoid this year is not increasing your investments over time.

So like I said earlier, once your house is paid off and you have no debt, you have an emergency fund, that's where you can gradually really start increasing your efforts when it comes to investing. You can go and look to say, hey, can we start maxing out some of this stuff? You know, can we max out our Roth IRA? Can we max out our 401K? And there's other options like your HSA. That's another great retirement vehicle to use. So there's a lot of things out there to look to start to max out your retirement and your investing, which is fabulous. But again, that's after your house is paid off. So when it comes to your house, we always say to do a 15-year fixed rate. And most of you, people on the Ramsey plan pay off their house in seven to eight years. They actually do it in way less

time, which is amazing. So instead of having your home for 30 years that you're paying a mortgage on for 30 years, man, pay it off. So that way you can go and max out all of your other retirement and investing because that is what's beautiful. So again, if you're on Babyset's 4 through 6, don't stay on cruise control, really, really start looking to say, hey, what other places can I take my money to go and invest? So again, Babysept 4 is investing 15%? So again, Babyspt 4 is investing 15% of your income into retirement. Babysept 5 is Kids College. Babyset 6 is paying the house off early. So you get those knocked out, you guys, and you're on the Babysep 7, which is continuing to invest, build wealth, and be extremely generous. All right, last but not least, the seventh investing mistake to avoid in

2024 is not working with a pro. So listen, working with somebody who does this day in and day out, I think is so important, especially when you're looking at retirement specifically and kids college. When you're looking at this, they're able to look at the full picture. able to help you invest your money in good mutual funds and a really great investment pro is going to look at your overall financial picture. They're going to be able to help you and look at taxes, some strategy, what to do with your money. Having somebody in your corner, you guys, I think is really, really important. So make sure to check out smart vester pros. You can go to ramsysolutions.com, find one in your area. There should be a couple that pull up in your area and go and interview people

and say, hey, when I sit down with them, do they have the heart of a teacher? Are they kind? Do I feel like I'm not intimidated by them. I can ask questions. I can learn. You want somebody in your corner who knows what they're doing and is willing to sit down with you and have a conversation. If you feel gross with somebody and you're like, that person's, I don't like them, then don't put your money with them. Don't do it. No. But investing is such a niche part of money and there's people out there. They live and breathe this stuff day in and day out, have those people in your corner. All right, you guys, hopefully those investing tips got you motivated for the new year and start to let your money grow. We didn't talk a lot about compound interest in that episode,

but it is a beautiful thing. Investing is such a great thing. All right, I want to thank George Campbell, my friend, for being on, so excited for him and his new book. And thank you guys so much for listening to this episode. Make sure to share this episode with a friend or with family. Spread the word. It helps us out a lot because we want everybody, just like you, to take control of your money and create a life you love.