The Ramsey Show - App - Do Not Sacrifice Your Retirement To Send Junior Off to College (Hour 2)

Episode Date: August 5, 2022

Ken Coleman & George Kamel discuss: Buying rentals while in debt, Finding purpose in work, Should you sell your house, Doing the Baby Steps out of order.   Want a plan for your money? Find out where to start: https://bit.ly/3nInETX Listen to all The Ramsey Network podcasts: https://bit.ly/3GxiXm6

МУЗЫКАЛЬНАЯ ЗАСТАВКА Live from the headquarters of Ramsey Solutions, this is The Ramsey Show, where we help you win in your financial life, your professional life, and your relational life. I'm Ken Coleman. George Campbell is my co-host. He is my colleague. He has a personality. The number to jump in is 888-825-5225, 888-825-5225. I'll warn you, George and I like to have fun. So, you know, we might just laugh a little bit with you.

We may laugh at you. We may laugh at each other, which, by the way... We like to laugh at each other. Don't take it personally. Can people get offended? They go, wow, Ken and George are really- There's some beef there. They say this? There's no beef. They don't say that. No, no one's ever said that.

No, because there's no beef. Don't make stuff up. There's no beef. We like hanging out. This is basically vegan. That's how little beef there is on the show. See, you had to go ruin it. I was really liking the direction we were going.

But no, we had dinner together. The Coleman's and the Camels. That's true. It was a great time. Stacey is incredible, and I know you're a big fan of Whitney, my wife. I thought you were saying Stacey's incredible, you're not so much. You were there, too. I was there.

Stacey is incredible, and I was just there. But it was George's favorite restaurant, and I've got to tell you, folks, trust George when he makes a food recommendation. When I make any recommendation. I don't make them lightly. I don't know about everything, but it makes a food recommendation. When I make any recommendation. I don't make them lightly. I don't know about everything. But it was a great restaurant. Leslie joins us as we start this hour off in Yuma, Arizona.

I like saying that word. I'm not going to lie to you. Leslie, how can we help? Hello, Dave. Thank you for taking my call. We want to build a four-unit apartment complex. And with the current market and the prices for these things have been getting up and down, and we just don't know if it's a good time for us to build right now or if we should wait. So why do you want to build a fourplex?

Well, we already own a small commercial building that's being rented in a little smaller town. And it has some land on the back, and we see it as an opportunity to build there. We already have the floor plans. We paid around $18,000 and we just don't know whether we should wait or... Okay. So is this strictly an investment property or do you plan on living there? No, no. We already have a house. Is it paid off? Do you have a mortgage on it? Yes. We currently owe like $310,000 for the house, and then for the commercial building, which is currently being rented, we owe $97,000, and then we owe $25,000 for a car. Okay. What's this fourplex going to cost?

Around $360,000. And how much are you going to put down on that? They're telling us that they need around 25% equity, but they can, since it's in the same property, they'll do like one loan, and they'll take into account their equity. Okay. Well, Leslie, I got to tell you, to me, this plan sounds like a nightmare because you're sitting here with hundreds of thousands of dollars in debt and then planning on going hundreds of thousands more in debt with nothing down,

with multiple mortgage payments to pay, with car loan debt. So, I mean, if you're following the Ramsey plan, we're going to pay cash for any investment properties and we're going to do that once our current home is paid for. And so we are not, we're not in the business of nothing down real estate and, you know, we want to do it the smart way. And if you've heard Dave Ramsey's story, you'll know that he's done dumb with some zeros on the end and went bankrupt because he got a little fancy with his real estate deals. And that's what I'm worried for you guys is putting yourself in a financial bind, going further into debt with this fourplex.

Because you're talking, you're going to be close to a million dollars in debt by the end of this. Yes. Well, we both make over $200,000 and we don't know anything other than the house. The house is worth around $500,000. So everything you just heard George said bounced right off of you because you think, well, we make over $200,000. This is a good move for us. So I just want to push. You heard what George said. We're not going to change our opinion on this. We don't want anybody to go into debt. But I just want to try to make a financial case by asking you a question. What do you think you're going to make? What do you guys plan to clear on the fourplex?

Let's just run the numbers. What do you think your mortgage is going to be, or what have they told you it is, and what do you think you're going to clear on it? Well, we think the mortgage is going to be around $2,100 plus water, repairs, insurance, and taxes. We're thinking we are going to have like around $905. That's what you're going to clear each month is $900. Yes. So we're going to go hundreds of thousands of dollars in debt to clear $900 a month?

Yes. Does that make sense to you? You're going to pay more than that interest alone on this deal, which is going to be higher because it's an investment commercial loan. So I just don't feel good about this. No, I know. I know we don't. I mean, Leslie, I'm putting you on the spot on purpose.

Does that make sense to you when you look at the risk versus reward? It's a simple risk-reward question. To risk all of that debt to clear $900 a month, does that seem like a good risk-reward scenario for you? Well, the way I saw it is that the apartments, they were going to get paid with the rent. So that would be in addition to having those apartments being paid on their own. There's no such thing as a free lunch, Leslie.

And one thing goes wrong, the roof, the HVAC, a renter doesn't pay, and you've got four renters now. There's a lot more to worry about. There's four times as many complaints and issues and repairs and maintenance, and this just scares me, having a million dollars in debt. Now, you can do whatever you want, and you guys might just be fine, but man, following the Ramsey plan, you've got to be out of consumer debt. We're going to get an emergency fund. We're going to pay off the current house, our primary residence. We're going to be investing for the future, and I think right now, truthfully, you're starry-eyed looking at the just napkin math of, well, what if we built a fourplex and what would it do for us

financially? You guys are doing great financially. Let's utilize this income to pay off our debt. Then how much faster can we save up and pay cash for investment properties and do it the right way with very little risk? That's what I want for you guys. Yeah, George, what's the pull? I mean, she's a smart lady, but there's always a pull on this. You know, it's like... Well, in the real estate investment world, Ken, and you've seen this time and time again, there can be a little bit of that greeting.

You just look at the numbers and go, oh my gosh, we could be making so much money. And it looks great on paper until reality hits, and they call in the numbers and go, oh my gosh, we could be making so much money. And it looks great on paper until reality hits and they call in the show and says, hey, my renter hasn't paid in six months. And they trash the place and the HVAC's out. We owe on our current mortgage. We have a car loan. We have 97,000 on the other property. And you feel the weight and the stress. And we're all about financial peace around here. We're trying to simplify our life, especially financially. And when you have debt hanging all around you and you get starry-eyed at a real estate investment,

that's where things can go south. And we've seen it time and time again here on the show and I don't want that for Leslie's future. And we don't want it for anybody. Folks, it's just very simple. All that risk, boy, I'll tell you. It's not the sexy advice to say pay cash for investment property. It really isn't.

No one wants to hear that. Not when you've got a bunch of loudmouths posing in front of private jets on Instagram telling you to over-leverage. Yeah, it's just a trap. It's so risky, and it's just so destructive if it doesn't work. All right, folks, we are continuing on here in just a few moments. Quick break, right back. welcome back to the Ramsey show I'm Ken Coleman George Campbell my colleague joins me this hour we are so excited that you are here we're also excited to be back on the road. With the rising cost of everything these days,

a lot of folks are worried about having enough money in their bank accounts just to get through the month. The good news is no matter where you are with your money today, no matter the state of the economy, you can get on a path to building wealth. At our Building Wealth Live events, you'll learn a simple common sense group of principles to build real lasting wealth. The tour is really fun. We had a spring leg, and now we are out this fall on a leg going out west, if you will.

Phoenix, we start September 12th, is a brand new date. Our September 13th date in Phoenix is already sold out, so we added another day. Sacramento, November 1st sold out. Minneapolis, November 10th. And San Antonio, November 15th. You can get your ticket starting at $25. Or you can get a four-pack starting at $60. Go to ramseysolutions.com slash events.

That's ramseysolutions.com slash events. That's ramseysolutions.com slash events to reserve your seats now. John Deloney and I do a little pre-show thing. We talk about love and work, right? Work and relationships, and then he and I join the panel,

the illustrious panel it's being called. With Dave Ramsey, who teaches for an hour and then rachel cruz our dear friend uh kind of leads the panel with dave you uh me and john it's a good time you get you get what five of us up there it's a party it is it is a great talk from dave ramsey as well on building wealth and get rich quick and all the things he's seen with his perspective over 30 years of doing this stuff it's's eye-opening. It's encouraging. You're going to leave going, I can be a millionaire. I can do this stuff regardless of what's happening in the

economy or the White House. Yeah. So get your ticket, bring some popcorn and join us. It's going to be a lot of fun. Manuel is joining us. Is that right? Am I reading the screen properly, George? We're traveling to Tokyo. I love this. This is an international show. Tokyo, Japan is where he joins us. How can we help? Hi.

Thank you for taking my call. You bet. What's going on? Mainly, well, as you might have guessed from my location, I studied Japanese in college, and that took my career out to the Far East. And currently I work for a Japanese firm and it's a great company. I have no problem working with them. However, as I look to the future, you never know what's going to happen with this company. And I'm in the business world, but the thought of changing jobs is really scary to me because I don't have

a degree in business. I have a degree or a STEM field degree. I have a degree in the Japanese language. I don't know if experience is more important here. I need another degree to get my foot in the door if I ever want to change jobs, but I'd like some advice. Yeah, sure. Are you thinking about changing jobs sometime in the near future, or are you just thinking way ahead and going, what if I get tired of what I'm doing now, and I've got this specialty area, and I'm just wondering what's driving this call? Right. So the company is actually planning to send me back to the States in three to five years, but it's, as you say, it's more of a long-term thing. I don't have any plans to leave this company, but what do you do for them now? So they're a contract manufacturer

and I'm in the sales department. Okay. So you're more of an account manager. Okay. So you're an account manager. Um, and, uh, I'm assuming you're leveraging your degree and your ability to speak Japanese fluently or no. Yes. Yes. That's, that's the main reason they hired me is because the, uh, the production, uh, is all conducted in Japanese. So to speak with their American clients, they needed somebody like me. Okay. And when you set out to get this major and this focus, what was your early vision? Why'd you choose this? Because this is a very specific choice. I'm just curious what was driving that? Well, I was good at it. And I got straight A's in all my Japanese classes. And I thought, you know, if I'm good at it,

I might as well keep going down this road. And, you know, here I am today. Yeah. Well, and I think what's happening, and this is a good thing, what's happening is you're now realizing talent's not enough, aren't you? You're kind of like, I'm good at it, but there's something else out there. I know there's something else out there. You may have some specific ideas, you may not. But I teach on the Ken Coleman Show and here on the Ravesy show, the idea of how do I find a purpose in my work? How do I answer the question, what

should I do with my life when it comes to work? And the combination is, Manuel, I use what I do best, talent, to do work that I enjoy, that's passion, to produce results that matter to me, mission. And I think what you're starting to realize is you've got the talent linguistically, right? And certainly you've been able to master the Japanese language, and it's gotten you a really good job. But now you go, okay, that's just a skill set. What do I enjoy to do? And I think you're beginning to see that, and you're starting to go, uh-oh, how would I pivot?

Am I right? Well, I do enjoy my job. It's more or less security in the future, right? I understand, but my point is, what do you want to do? I mean, there's got to be something up the ladder. You have much bigger vision than just being an account manager in sales. True? Well, I stumped you on that one. Okay, well, that's fine. But that's part of how I answered this question. For you to come up with ideas on what you want to do long term, you've got to get to the other two parts of that equation I gave you, talent plus passion plus mission. You've got to start to identify, what do I really enjoy doing? Who are the people I enjoy helping?

How do I like to help them? And so this is a beginning of a process for you. And I'm going to give you a couple tools here. I'm going to give you my Get Clear Career Assessment. I want you to take it. It's about a 20-minute assessment. It's going to give you a detailed report on talent, passion, and mission and fill out a purpose statement for you to where you go, okay, now this becomes a filter for what I would do long-term. Okay. And I'll give you my book, From Paycheck to Purpose, which will unveil the seven stages you'll take long-term. But to give you the advice today for you to begin to think about this, you've got to be able to say, all right,

what could I do before you come up with what should I do? And I just think you're early in your career, and I don't want to put you on the spot, but are you tracking with what I'm telling you? Yeah, I have more of a long-term vision where I want to see myself in 10, 20 years. That's it. That's the exploration. And it's fun. It doesn't need to be intimidating, George. It's beginning to visualize what could I do? What would I enjoy doing? Where do I want to do it? And even if you want to continue to be an account manager, do you not think you could go to another company and get an account manager job

with the degree that you have, with your experience? So I've been looking at the different job postings, and most of them have as a requirement that you have a four-year degree in business or a related field. So that's kind of the main thing. I truly think they're going to see past that when they go, wow, this guy has some incredible experience. Clearly he knows what he's doing. He's great at this job. And they're going to overlook that piece of the requirement. You work for an international or multinational company.

Yes. They don't care if you have a business degree. I'm just telling you. Not with the amount of experience, three to five years from now. If you're going to stay with this company another two, three years, that's all the experience you need. Companies all around the world, certainly the United States, will be happy to hire you. You're going to have tremendous experience. You do not need to go get another

degree. Are you good at your job? I like to think so. Yeah, great. Then you're going to be able to find another one doing just that. And can I ask you, it's 4 30 in the morning in Tokyo. Did you wake up just to call us? Yes, I did. Yeah. There it is, Ken. I respect that. And I really want to pay it off. Listen, the degree question is always going to come down to this. I've got to know where I want to go, okay, professionally, and then I have to ask, is a degree the only way I can get there? And then the second question is, is a degree the best way to get me where I want to go? But right now, young man, you just don't know where you want to go, and that's okay.

There's no problem with that, but you don't have a mountaintop that you've got in your mind, so the degree is an automatic no. There's no sense in getting a degree when we don't know where we want to go. Right now, you're doing really great. You're in a good company. You're building your platform. How old are you? I'm 28 years old. Yeah, you're 28, man. The 20s are all about exploration and experimentation professionally and beginning to see. And your 30s is when you begin to build.

Your 40s and 50s is when you harvest. So you're in good shape, young man. Hang on the line. I do want you to take the Get Clear Career Assessment. It'll really help you with clarity and some confidence moving forward. We'll also give you the companion to that, From Paycheck to Purpose, the book that gives you the seven-stage process to actually get your dream job. Appreciate the call.

Wow, it's really early, George. It's amazing. Really early. It's that kind of effort that's got him to where he is today, Ken. This is The Ramsey Show. I'm Ken Coleman. George Campbell joins me this hour. We're here to help you win in your money, your work, your profession,

and in your relationships. 888-825-5225 is the phone number. 888-825-5225. Let's go to Knoxville, Tennessee. Harrison joins us there. How can we help, sir? Hey, guys. Thank you so much for all you do.

Thank you, sir. All right. So I just got a new job here in Tennessee with TVA. All right. So me and my wife are renting right now because we're just kind of waiting. We did purchase land, but we couldn't really afford just the building prices, which is just out of our budget right now we're just renting so my question is should i rent or sell the home that i had in south carolina that we moved from what are you doing with it now i'm right now it's just it's vacant oh that's not fun. Why do you want to rent it? Because it's in a fantastic area. That area is really blowing up. How much do you owe on that house?

I owe $168,000, and the interest rate is 2.8%. Ooh, nice. What's it worth? One realtor quoted that we could get anywhere conservatively $250,000 and then possibly up to $270,000. Now, you guys said that you have this land, you're not doing anything with it as well on top of that. That's correct.

Do you owe money on that? You paid cash for that. You paid cash. I'm completely debt-free except for the house. Except for this house in South Carolina. That's correct. I know what Dave would say, George. Well, my goal is for you to get a house.

And so that means I'm selling this one because that's going to expedite the process to get a down payment. And if it's a hot area, that means it's going to sell for a pretty penny. Yeah, I'm telling you right now, Dave, I can hear him in my head right now going, don't be a long-distance landlord. Don't be a long-distance landlord. Don't be a long-distance landlord. You know, it's just a pain in the you-know-what, you know. And George is right. That fast-forwards a lot of stuff for you. Correct.

My in-laws have experience with a company that handles that, and so I did talk to them. They had great reviews, and they estimated I'd get $1,400 to $1,500 a month if I did rent. But what do you owe on it every month? $900. Yeah, so we're doing this for a few grand a year. It's not much money.

And that's if everything goes perfectly. So I'm selling this thing. I'm going to use that money as my future down payment on top of saving up. What's your new income? It's around $80,000 to $90,000 a year. So making $80,000 to $90,000 a year debt-free, you should be able to sock away a good chunk of money on top of the sale proceeds from this house,

and you can get in a house in the next year or two in your area? Yes, that sounds probably about right. That would be my plan, especially as homes continue to appreciate over the next 5, 10 years, especially in your area. That would be my plan. And ballpark, George, what do you think he puts down on the next house, knowing what he could get on this house? Well, if you're saying you're going to sell it for $250,000 and you owe $168,000,

that's going to put you at about $84,000 or so, and then you probably sock away out of that $90,000 you're making. You could probably save another $30,000 in the next 12 months, which gives you six figures to put down on your next property for your primary residence. Right. That puts you in a good financial spot. Think about that and lowering your expenses.

I think your in-laws are telling you, and you respect them, and I understand why, but I think your in-laws are telling you and you respect them and I understand why, but I think your in-laws are trying to talk you in to renting this house. But George said it beautifully, talking about a couple thousand dollars a month after you pay your mortgage. A year. Yeah, a year. Excuse me, a year. Thank you. I don't care if you got a company managing it for you or not, it's still a pain in the butt for a couple grand a year. I just think you have to really look at that. What's the benefit for that versus the $80,000 getting you started on a fantastic down payment?

And think about how long it would take you to save up $80,000 out of your own income. Yes, very good point. So I like this plan. You can do your plan, but, man, this one sounds a lot more peaceful to me. I'd sell point. I like this plan. You can do your plan, but man, this one sounds a lot more peaceful to me. I'd sell it. I would sell it. You know, Ken and I, we're big fans. I like to sell stuff. There's a big, you know,

the feeling is, why would you ever get rid of a rental? You can make so much money. Let's look at the numbers. There's not a lot of money to be made on this thing. I agree. And the hassle of it. So, I agree. That's hassle of it. I agree. That's just one man's opinion. There it is.

Mary Lou is up in St. Louis, Missouri. Mary Lou, how can we help? Yes, thank you for taking my call. Sure. My husband and I are both retired, and we recently sold a piece of rental property for $150,000, and we're just wondering which is the best way to invest it. Awesome. So you have $150,000 sitting in the bank right now?

Yes. Awesome. It's in the money market. Okay. Give us a little snapshot of your financial picture. What do you guys have in retirement? Do you have any debt? Do you have an emergency fund, and what's your income? We don't have any debt. We have an emergency fund of probably $60,000, and our income is probably $55,000 a year. Okay, and what's in retirement?

We've got about $100,000 probably, or not more than that, I'm sorry. We have investments with Edward Jones, probably $400,000. Okay. And do you owe on your primary residence? No, we don't. We're not in any debt at all. We have been blessed. That's great news. And so really, you don't have any current plans that you need to make with this $150,000? No renovations, no car upgrades, nothing big that you're trying to do? No, nothing. We just don't know what to do with it. It's just laying there. We would like to invest it in some way. Sure. Well, if you're going to use it in the near future, let's say three to five years, you could park it in an S&P 500 index fund if you're wanting to purchase property in the future. Are you wanting to get back into some

real estate investing? No, actually we're 82. We're both 82 years old and we've been there, done that, and we just want to keep what we have. Well, that's great news. In that case, if you're just saying, hey, we want this to create income for us long term, use the power of compound growth, you can invest it in some great growth stock mutual funds. And if you need help choosing the right ones, you can connect with one of our smart investor pros at RamseySolutions.com, and they're going to help you make the best use of that $150,000. Because even at, you know, let's say 10% growth, well, that's $15,000 a year that's compounding for you versus sitting in that money market making nothing.

Right, right. So I like that plan a whole lot. But you guys have done so well. I'm proud of you guys. Well, we have been blessed. We have a large family. When we all get together, there's 30 of us. Wow.

Well, you might need to carve out some of that money for the catering. You might need to buy a few Astro vans to transport everyone. That's right. Well, we have been involved in such as that as well. I'll bet. Well, Mary Lou, that is so great. Definitely, if you've not connected with one of our SmartVestor Pros, ramsaysolutions.com, click on the smart investor pro tab uh and interview a few folks uh in your area but don't

just let this money sit yeah yeah they'll help you maximize this and uh what what an awesome blessing this is so congratulations i like mary lou ken just so peaceful i want to hang out with her after the last call i'm wondering why i don't want to sell the rental. And now you hear Mary Lou going, we sold the rental. Feels great. We've got a pile of cash. She's 82. She said, we've been there, done that. She's like, that's for the whippersnappers.

That's right. We're chilling. But there's a great teaching moment there because Mary Lou has options. Oh, boy, does she. When you call in and you go, we've got a big pile of cash. She's got 150,000 options. We have no debt, no mortgage. What do we do?

Yeah. That's an exciting problem to have versus being backed into a corner going, we've got a huge pile of debt. We've got all these properties, all these mortgages. What do we do? Yeah. It's a very different tone. Yeah, it really is.

And I'm proud of her. Yeah, that is awesome stuff. I'd love to hear it. That is just, that is great. You know, 82. It's impressive. Got the money. I hope you make it that long, Ken. I think you will.

You think so? Yeah. I appreciate that. I think people who golf just tend to live longer. And you've been out there on the course this morning. Well, you know, somebody's got to do it. It's a tough job. I find it to be tremendous therapy, if I'm being honest.

Yeah. What do you do, George? What's your hobbies? Not golf. Golf is very stressful to me. What do you do? I play guitar. your hobbies? Not golf. Golf is very stressful to me. What do you do? I play guitar. I like to watch some stand-up comedy.

That's what you do? Listen to some good music. Yeah. Play with my dogs. Okay. Dogs are therapy to me, Ken. You seem very lonely. Gosh.

That's for the Dr. John Deloney show. I'll be calling in soon. Okay. Well, we can hang out after the show today. I appreciate that. I'll sit there and watch you play your guitar. Thank you. I need an audience. That feels that. I'll sit there and watch you play your guitar. Thank you. I need an audience.

That feels pathetic. All right, don't go anywhere. More of your calls coming up next. This is The Ramsey Show, where we help you win with your money, your work, and your relationships. We've been talking your ears off about how the real estate market is not going to crash. And how, though we are in a mini-recession, it's not the end of the world. Well, here's some more good news. Mortgage rates dropped more this past week than they have in any week since 2020. So, George, we're seeing that. We're seeing the

roller coaster of the mortgage rates, right? Oh, yeah. And they're only down by about 0.3%, but you can celebrate this win by refinancing or buying the house you've been wanting. Remember that making decisions based on facts, not fear, pays off in a changing market. So, if you're taking this dip in mortgage rates as your chance to buy a home like other people are, make sure you're ready. Make sure you have an experienced real estate agent by your side to walk you through it. If you want to talk to one that's Ramsey trusted, go to ramsaysolutions.com slash agent. Those pros from our endorsed local providers program are top of the line

and know how to help you through the market changes. Again, that's RamseySolutions.com slash AgentRamseySolutions.com slash Agent. Georgia, you and Whitney. Yes, just went through this process. Recently took advantage, got yourself a good deal. And let me tell you, our agent was fantastic and gave us some great gifts. Oh, is that right? I got a giant Yeti cooler and a Roomba.

What's a Roomba? One of those little robot vacuums. Oh, did you really? Yeah. Do you use it? Or about to. Game on. It just roams around the house.

It gets rid of all that dog hair while I'm not even home. That's a blessing. It doesn't bump into the furniture? No, it's smart. Ken, you don't have one? Don't change your family tree. George, I just asked you live on the air what a Ro it's smart. Ken, you don't have one? Don't change your family tree. George, I just asked you live on the air what a Roomba is. Of course I don't have one. I thought you

were playing coy. No, no. I'm genuinely interested. You're my friend who has the cool stuff. You teach me stuff all the time. You're like, oh, I learned stuff from you. Well, you know, the Gen X, they missed out on all the hot tech. And us millennials, we took full advantage.

There it is. I'll get you there. I'm here for you. Yeah, but you got the Yeti cooler, too. It's my first one, because I'm never going to spend $400 on a cooler. Well, you could sleep in that thing. Oh, absolutely. And I guess in an ice bath. I don't know what I'm doing in there. Cold plunge. No, thank you. Yeah, I like that. Trevor's up

in Chicago, Illinois. Trevor, how can we help? Hey, how's it going, guys? You guys are awesome. Love you guys. Oh, thank you very much. We love you, Trevor. We're going to send you a $5 bill for that public comment.

I'm kidding. That's a joke. I'm not going to send you anything. He's going to be reaching out to you, Ken, saying, No, no, I was joking. I don't mean that. What's your question, Trevor? All right.

I really need your help. I'm on step six, kind of. Hold on a second. Hold on. Hold on. How are you kind of on baby step six? What does that mean? Okay.

I wasn't going to get into this, but I'll tell you. So we got to step two, skipped over steps three, four, and five and paid off our house. I'm so confused. Then we went. I'm not. I'm actually tracking with it. So you have no emergency fund. You've not been saving 15%.

That's baby step four. You didn't fund anything for college. You just went to the house. Yeah. So we did step one, step two. We did step six. Yeah. Then we did step one, step two. We did step six. Then we did step three. Now we're past step four and we're on step five. That's one way to do it. Wow. Okay. All right. And here's the deal. So I'm at basically savings for college and then I'm on step seven. So you have no mortgage payment.

And I totally lost zero mortgage payment. And now we're just funding college and building wealth and being generous. Yeah. So technically you're baby step seven. Technically, yeah. Yeah, you are the most confused debt-free person I've ever met. That's a compliment. It's fantastic.

The way you just laid that out. I think you're exhausted. I think you're mentally exhausted. My brain hurt just walking through that scenario. That's why I'm calling because I'm just totally not a gazelle anymore. Well, you don't have to be. Uh-oh, I feel like I blew your mind there. I think the smoke is coming. No, no. No, no. You don't have to be gazelle intense anymore. Am I right, George? Yeah. We move from intense to intentional

once we are in baby step four and beyond. I got a slow clap. And Trevor, you've been very intentional, right? Yeah. So what are you beating yourself up for? Why don't you feel like you're intense enough? I guess because of the ambiguity of what college is going to be for my kids by the time they get to that age. What's your plan? How much you plan to save? We don't have a plan right now. How many kids do you have? Three. How old are they? Six, nine, and eleven. Okay, when you say you don't have a plan, are you putting anything aside every month? You said you were.

What are you putting away? Yeah, we've got savings accounts for each of the kids. Are they ESAs or 529s? No, they're just regular savings accounts. I guess our focus is to, since we're not at the 15%, we're doing 10% on step four. Why? So, why? You don't have any payments.

Do you not have enough money to invest 15%? Well, our kids are in private school, and it's kind of, we're tight right now. I got you. I get it. So. It's kind of, we're tight right now. I got you. I get it. But I guess my point is, it's like it blew your mind when I told you you didn't have to be gazelle intense technically. You really don't right now. But you do have to be investing 15%. Yeah.

At least. And if you put something away for college, that's bonus. So do not sacrifice your own retirement to send junior off to college. Right. I agree with that. Because they're going to be supporting mom and dad once they're out of college. We don't want that. Is there a question in there? Because you ran into a really fun exercise of how you did the baby steps. It was like a twister board is how you went about doing it. Is there a question that we haven't answered? I guess one, my biggest question is, am I going to have enough for retirement?

And that's kind of the thing that... How old are you? I lose 42. How much do you have in retirement now? $200,000. Okay. Yeah, you're going to be fine. You're going to work another what, 15, 20 years? 23 years.

Yes. You've got that planned out. You're not that lost. That's the quickest answer you've had all this entire call. And what's your house worth? $250,000. Okay. Yeah. And so you've got about a half million dollar net worth.

Does that sound right? Yeah. Okay, so in the next five years to 10 years, you'll be a Baby Steps millionaire. And 10 years after that, you're going to have multi-million dollars in your accounts and with your home appreciation. You're going to have enough.

You're going to be fine. But you do need to get that number up to 15%. And then whatever's left over. And if private school is holding you guys back from being able to retire with dignity, we need to re-look at private school and go, is this the right option for us right now? Right. Because how much is private school costing you guys?

$1,500 a month. Ouch. I don't know how you paid off a mortgage and now you're tight after not having that payment anymore. What's your household income? $100,000 a year. Okay. I want you guys to look at that budget and do an audit and go, where are we overpaying? Do we need to check up on our insurance? Do we need to really ratchet down on eating out? Do we need to cut some subscriptions? And do we need to get more income in the door? I think if you do all of those things, you need some margin in your life,

especially to be a baby step seven. That's what this whole plan is about, financial peace. And you don't have it right now. And that's where I'm wondering where all these money leaks are coming from. Yeah. Well, the house was paid off from a savings account. It wasn't really the debt snowball. It was in savings already.

We just chose to pull it out of savings and kill the house debt okay does that make sense so that that's probably why part of that was confusing but i'm with george i i don't know why you have the fear um i'm not sure what's going on but it just a good old-fashioned uh you know get in the old sandbox of the budget and look at everything because with the money you're making, even with the $1,500 a month going towards private school. You make $100. I don't know where the rest is going when you don't have payments. You've got plenty to be able to invest 15%.

It shouldn't be that tight. So you've done this before. You were unorthodox about it, but you still have shown some discipline. So I think it's calls for discipline and tightening where you need to tighten. I think George is absolutely right. Appreciate the call, but you're going to be fine. You're doing better than you think you are. Yeah.

Yeah, celebrate. Celebrate. You sound like Eeyore. I want you acting like Tigger right now. That's what I want. You're in great shape, man. All right, that's another hour in the books, George Campbell. We did it.

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