The Ramsey Show - App - How Do I Become Financially Independent? (Hour 1)

Episode Date: January 26, 2023

George Kamel & Jade Warshaw answer your questions and discuss: "How do I become financially independent?", Paying off debt before buying a home, Switching to a new retirement plan. Have a question for the show? Call 888-825-5225 Weekdays from 2-5pm ET 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 Learn more about your ad choices. https://www.megaphone.fm/adchoices Ramsey Solutions Privacy Policy

Девочка-пай Live from the headquarters of Ramsey Solutions, broadcasting from the POG's moving and storage studio, it's The Ramsey Show, where America hangs out to have a conversation about your life and your money. I'm George Campbell, joined by Jade Warshaw this hour, and we're excited to take your calls at 888-825-5225. You jump in, we'll talk about your life and your money. Well, Jade, I want to kick off the show with a correction to a call I took yesterday. Many of you reached out. Thank you for that. And we took a call from Angela, and she had a HELOC. She wanted to use a 401k loan to pay off the HELOC. And so we were walking her through why this is a bad idea. And the advice remained that she shouldn't do it.

But my explanation of why was incorrect. That's all right. So I want to make sure that we educate our folks out there on why the 401k loan is a terrible idea. So the idea here is I'm going to take money out of my 401k and pay myself back with interest of, you know, 5%. Right. Already not tracking because you have to use your own money to pay yourself that interest, right? Right. The big issue here is that you're unplugging all of the growth of that money. Compound interest was working for you. You know, the S&P 500 average rate of return 10 to 12% since 1928. Yes. And so you are missing out on all of that growth, which is only going to hurt you down the line of retirement.

Number two, it puts you in a very precarious situation because now we're dependent on our employer. Because if you leave that job for any reason, you get fired, you switch jobs, that loan now becomes due. The IRS sees that as a withdrawal. So now it's due within 60 to 90 days. You've got to come up with all this money or else it's a withdrawal. And now you've got a 10% penalty. Your tax rate on top of that adds insult to injury. So it's a very, very scary situation. And to make it worse, you're using after-tax dollars to put the money back in because you're using your net income to repay the loan and interest. And so it's a very tax inefficient way to put money

into your 401k. And so I know people feel like they're backed into a corner. My only option was to borrow from the 401k. You have other options. And the debt snowball works. And most people, they go for the debt consolidation. They go for the HELOC in times of need. Your emergency fund is there to prevent you from having to go back into debt ever again. And so that's why we tell you to get to Baby Step 3 with gazelle intensity to avoid that mistake. I love that. Yep. Baby Steps 1 through 3 are all about the intensity so you can avoid situations like what George just mentioned. Absolutely. So there's my correction. I apologize for getting that wrong yesterday. I will tell you it won't happen again, but I'm

a fallible human being and I wish I had all of like the Wikipedias in my head. But sometimes, in a radio show, you're doing it live and you slip. So apologies to Angela and to the listeners out there. We're going to do better for you. What kind of guy is this? Come on, George. Listen, this is what I'm talking about. I love the integrity. Thank you. Thank you. Well, let's get to the phones. Michael awaits us in Fort Lauderdale. Michael, welcome to the show. Oh, Lottie. Hey, how are you doing? Doing great. How can we help? So currently, um, just looking to become more financially independent. Uh, I've been taking great strides ever since getting out of college.

I'm 29 now. Um, own a house that has about 210 K on the note left. Have a car loan of 35k on that end. But the home itself is now worth I would say close to 760k. That's great.

Yeah. I bought it for 310 when I was 24 and put another $180,000 into renovations into it. And so, you know, it's got equity there. Way to go. I currently have about $370,000 in stocks as well as bonds. Single stocks? Yeah well as bonds. Single stocks?

Yeah, single stocks. Okay. I'm currently making a career change at this current moment as well. I was making roughly around $180,000 to $200,000 a year working for an employer. I'm actually switching careers to the construction industry, going to take a $100,000 pay cut, basically, to learn, and basically learn that industry in order to eventually open up my own thing. So I'm kind of in between crossroad paths right now. So how can we help you today?

I mean, right now I had a vision of, and I guess biggest thing is my home was either to sell it or I was going to convert it over to an Airbnb just because of another financial investment opportunity for me. And that's really where I'm stuck. Do I sell it, take the equity and pay off the note and take the equity and potentially go invest in something else or put more towards stocks or my future career? I mean, you've got a lot of options here. For me, the first thing I'm

going to look at is clearing out all of the debt and making sure that you've got the right amount of savings in place. So you mentioned having the $370K in stocks. Do you have any liquid money, any liquid cash just sitting around that would be usable for an emergency fund? So liquidity-wise, I have about $35K to $40K. Okay. So you can pay the car off today. Yep. So you're saying to pay the car off today?

Yep. Yeah. And then your next goal would be have three to six months of emergency fund, and I would sell enough stocks to do that. And long-term, I'm selling. Obviously, you need to look at the tax implications and do this wisely with a tax professional. But I would sell those stocks and bonds and put it into index funds and mutual funds instead, because you can lose your

butt in an instant with that kind of volatility. So that's one way to keep the wealth that you've built. You've done an amazing job. And you're talking about, you want to be financially independent, which means your money makes you money, more money than you make. That's the goal, right? Correct. It's where you have cash flowing assets through your index funds, mutual funds, real estate. And I want you to do that all without debt. And so your goal would be, if you sell this place, to buy something that's reasonable in cash would be an awesome goal. Because then you can really start maximizing retirement. You know, I agree with what George is saying wholeheartedly,

but I will say it kind of feels like you're trying to do the most. Like you're trying to do everything you've ever heard of to do at one time. And I think that if you kind of just slow down a bit and lay out all your cards on the table and go, okay, let me make sure you can still get to where you want to go. We want to make sure you get there the wisest way. And I think just kind of slowing down and looking at what your scenario is, where you ultimately want to be, and then just taking those steps, step one by one to actually get there. And I agree with George, getting that debt cleared out. And if you want to sell the house, fine, taking that money, buying something else in cash,

making sure that you've got that great savings, three to six months saved up in liquid cash, and also clearing out those stocks for sure. And I would be working with a financial professional if you're not already. You can connect with a smart investor pro at ramsaysolutions.com. And one thing to think about is focusing on tax advantaged retirement accounts

and not just that brokerage account with those stocks, because that's another way you're able to really build wealth down the line. The brokerage account can be a piece of that puzzle to help you retire early and be financially independent. And you're on the path, man. But one way to do it, stay out of debt and build wealth and use all of that income. Your most powerful wealth building tool is your income. Use it. Maximize it.

You're on the path, my friend. This is The Ramsey Show. show. This is The Ramsey Show. I'm George Campbell, joined by Jade Warshaw this hour. Open phones at 888-825-5225. Well, about this time of year, we get flooded with calls on The Ramsey Show because everyone's looking for a fresh start with their money. So if that's you, you can't wish for things to change and just expect it to happen. You've got to do some different things with your money and have a plan. And we teach you that plan in Financial Peace

University. This is the course that will help you rethink how you manage your money. You're going to learn our proven plan to beat debt and build wealth. Plus, you'll have access to our financial coaches to help you every step of the way. Nearly 10 million people have now taken FPU, followed this plan, and changed their lives. And you can do it too. Today's the perfect time to start. That's because right now we're offering FPU, get this, just $69.99. That's wild.

But it's only through the end of the month. So time is running out here. This year, you can have more peace in your finances and your life. Don't wait. Get this limited time offer on FPU at ramseysolutions.com slash deal. That's ramseysolutions.com slash deal. I don't know, George. I think some people need to make the move today. Like they got to go today. Well, they have good reason to. And it's because you have signed up to lead a virtual Financial Peace University class. And you're trying to like break a Guinness record here. Yes, George. With the most amount of people signed up.

Look, you know, before we started working here at Ramsey, my husband and I, we coordinated classes all the time. And so I know what happens when you have the right amount of inspiration, the right amount of motivation, the right kick in the pants that you need to get going. And I'm hoping that by coordinating this class, people will feel that and they will really start to change their lives. I mean, look, you don't need to be in my class to change your life. But if you have the opportunity, I'm just saying you should take it.

So I am coordinating a class and that class starts March 1st. So if you are on the interwebs and you can see this little QR code, I want you to click the code. I want you to sign up. We're meeting twice a week. All I'm asking, George, is for one hour of your time for each of those nights. So it's just two hours a week. Five weeks?

Five weeks. This is accelerated. It's accelerated. It's super fast. Maybe in the past you've heard of a nine-week class or nine-week course. We're going to do this thing in five weeks. You are going to be a supercharged,

what is that anime where they power up? You're going to just be powering up on financial peace, financial literacy. Guys, we are- I'm pumped. I'm excited. And you're doing this from your house. You are going to get an insight

into the home of Jade Warshaw. I cannot wait. You might see my son walk by. We're going to see what you're eating for dinner. You are going to get an insight into the home of Jade Warshaw. I cannot wait. You might see my son. We're going to see what you're eating for dinner. It's going to be great. Don't ask me what I'm eating for dinner, George. It's going to fire the people up. If you're listening and you're like, well, what is this QR code?

Hey, you can go to this link. You can always pause it and write this down. FPU.com slash 1159611. 1159611. And I'll just add in, a lot of you guys have probably signed up for FPU before, but I'm not trying to put you on blast, but you never opened the course. You never clicked start. If you did that, you can still join my class.

You just have to choose it as the one that you're joining, as long as your FPU is still valid. Yeah, accountability is the key. And I feel like Jade's the kind of instructor coordinator that will call you out by name if you're not there. Yep. And I like that. Phil Smith, did you do your budget? Jim Jones? Phil's not there. He's getting called out. He's getting called out. I love it. I feel like this is the year where we go, listen, buying the thing isn't enough. We need the accountability. And I don't have friends and

family that is on this journey with me. That's right. We are here for you. We want to be those accountability partners. Bring some friends along for the ride, too. It'll be a blast. I love it. Come on, George.

Let's go. All right, let's go to the phones. Jonna joins us in Medford, Oregon. Jonna, welcome to the show. Hello. How's it going? Good. How are you?

Doing great. How can we help today? Okay. So I'm 19. My husband is 21 and we live with his mom. And I just found your guys' podcast a couple of weeks ago. And so we're trying to follow the baby steps, but I'm a little lost because we have like so much debt and we want to buy a house. We want to get out on our own. But if we were to follow them in order, we would be paying off debt for years until we were able to buy a house. So I just I don't know what our next step is.

Well, how much debt do you have? Well, we have $2,400 that we owe his boss and then our car loan, which is $19,000, which those are both doable, but then we have $109,000 from his restitution. Okay. And what's your income? Both of you combined? Both of us together make $45,000. Both of you together? What are you guys doing for work right now? I just started a new job about four months ago, and I'm house cleaning, and he is a chef. Cool. Are those both full-time or part-time?

His is part-time, mine is full-time, but he's looking for, we're starting to look for a better paying job for him. Okay, cool. So total consumer debt on paper, you're looking at about $120,000, $130,000 a year? Yes. Okay. What's the restitution payments like? How does that work? Is it a certain amount of time, certain monthly payment?

Not really. I mean, we can pay it off for the rest of our lives if we want, but we were doing, we've been falling behind, but we were doing just a hundred a month. And I never thought, I thought this would be something that like we would pay off until we're old, until I found your guys' show. And I was like, okay, maybe this is possible. It's absolutely possible. You can absolutely do this. Here's the thing. guys are 19 you're 21 you're just getting started in life you're newlyweds you're living with the parents um you've got time so i want to start out with that you know sometimes it feels like we've got to do everything at once

we got to move out we got to get a house we got to get debt free but i want to just kind of just remind you that y'all are just getting started you're you're all right we're going to give you a plan to get through this. And I think it starts with number one, your husband getting full time work and getting that income up. And even with you, you're cleaning houses. Is there anything you said you were working for a company cleaning houses? Is that correct? Yeah. If you can pick up doing some of that work on the side for yourself to get your income up so that we can start to tap into this debt a little bit. Do you guys have any money saved anywhere? No, we don't. No savings. All right. What's the car worth? I honestly don't know. It's a 2014 Buick Verano. I would do some homework to see if that's worth, you know, you need to save up some money to get a beater car, but if you can sell that thing for 19 or 20 and get out of this car loan, well, then we can just

focus on paying off the boss real quick, and then we just have this restitution to deal with, and we're going to attack that thing with a vengeance. That's right. So do you think that we should pay off the restitution before we start looking to buy a house? Absolutely. I think that, you know, the way that we teach is by a series of baby steps and we teach it that way. It's been proven over 30 years. This method works. It's helped millions of people get out of debt. So the way we teach it is that baby step one is that you're getting a thousand dollars saved. So when you get off this call today, you need to get with your husband. What's his name? Xander. You need to get with Xander and tell him, hey,

thing one for us is we've got to get $1,000 saved quickly. And that can look like you selling stuff. That can look like you picking up extra hours, whatever you need to do to get a quick starter emergency fund, because that's going to give you just a little bit of peace. All right. And then after that, you're going to start working aggressively to pay off all of your debt using the debt snowball method. Are you familiar with that? The smallest ones first. That's right. That's right. So that's, here's the thing, baby step two, it's not a lot of fun, right, George? And it takes that intensity. It takes people some time to get it done, but you can definitely do this. And your journey may, you know, be a different

one. For Jade and her husband, they had almost half a million dollars in debt. It took them over seven years Yeah, and for you guys it may take you know, four five six years to get rid of this restitution But it's going to be the wisest way to become a homeowner down the line And you will become a homeowner down the line I got to tell you this and i'm glad that george brought it up. Jonna My husband and I we rented We did not purchase a home together until we were 33 years old. All right, so it takes time.

And then, you know, you look at the other baby steps and you think, oh my gosh, I don't have enough time. I'm running out of time. That's not true. You have plenty of time. Even if you don't start baby step four until you're 35, walking this plan in order is ultimately gonna be what's best for you.

You're gonna have the best financial footing. You're gonna be able to look back and go, oh my gosh, we did this. And one day you'll have a house. One day you keep walking the steps, you'll be baby steps millionaires, just like so many people. And you're gonna have an incredible testimony

to share with others at the end of this road and share your debt-free story. Hang on the line. We're gonna gift you Financial Peace University. I want you and Xander to go through this even better. Join Jade's virtual five-week class she's starting in March, and that will light a fire under you to get rid of this debt once and for all. We're cheering you on, Jonna. This is The Ramsey Show. so welcome back to the ramsey show i'm ramsey personality george camel joined by jade warshaw we're taking your calls at 888-825-5225 let's go to the phones. Andrew joins us up next in Des Moines. Andrew, welcome to the show. Hi, how are you? Doing great. How can we help today? So my company is offering a one-time

election change to my retirement benefits. So currently they fund a pension for me at 4% of my salary, and then it gains interest based on the 30-year Treasury note. Then they also fund 10% into a 401k account. They're proposing to stop funding the 4% into the pension and just add an extra 4% to the 401k. Then the money that's in the pension fund would just continue to grow at that interest rate, and then I'd get 14% into a 401k. And then the money that's in the pension fund would just continue to grow at that interest rate. And then I'd get 14% into a 401k plan. So I was wondering, I guess, what your thoughts were on maybe which option would be better to choose or stay with? Man, if I woke up in your shoes, I'm switching over to that 401k. Okay. Instantly.

You're going to have better returns and more control. And so those are just two reasons I like it. Because that pension, when you die, it goes bye-bye. That 401k, you can pass down generationally. That's right. Or if something happens with the company, a lot of times a pension is what goes away as well. Yeah. And the reason they're doing this is they're getting away from having to manage these pension plans and the whole world, except for some government sectors, are switching over to 401ks. So I'd make the move.

That's a great benefit they have. That was kind of the thing. They're putting in 14% of their money? It's not a mandatory? Correct. Okay. So with this situation, how much are you contributing from your paychecks? 6%.

Okay. And could you bump that up now to 15%? My contribution up to 15? Yes. I could probably go up to 10 based on circumstances. My wife and I are expecting our first child so kind of exciting more that is exciting you guys have any debt I got some business some side business debt I do work on the side so how much debt do you have on

that end around oh a hundred thousand or so whoa What's your business bringing in? The side business? I farm on the side. Cool. I would focus on, I mean, that debt has your name on it at the end of the day. And so I'd be focused on getting rid of that and even looking at pausing contributions. I mean, they're already putting in 15%. So if you went, is that a match or are they just putting in 14% regardless of what you put in? 14% regardless. Wow. Man. That's amazing. Is it a Roth 401k?

Or is it? I think it's pre-tax. Traditional? Yeah, traditional. I think it'll be taxed when it comes out. Okay. Cool. Well, I'm focused on getting rid of that debt on the side business, and then I'm ratcheting it up to 15%, which you'll be able to do once those payments are out of your life. Do you guys have a mortgage as well?

No. Cool. Do you want to be a homeowner someday? Is that part of the plan? Yep. Cool. What's your income? Around $130,000. Is that including the side hustle? No. So with the side, probably maybe around $170,000 or so.

Awesome. Well, I'd focus on using all of that side hustle money to throw at the debt on top of however much margin you can scrape from your full-time job income. Sure. Yeah, I just try to keep the business side separate. So I haven't taken my personal anyway over there. But, yeah, it's something I could income. Sure. Yeah. I just try to keep the business side separate. So I haven't taken my personal anyway over there, but yeah, it's something I could do. Cool. Well, you have money in the bank for the baby? Yeah. Yep. Good. That's what we would call kind of the storm and stork mode where if you need to pause the baby steps temporarily, pause investing, pause debt

payoff, make minimum payments. If you don't have enough cash to cover what could be. We just don't know. Absolutely. You at least want to be able to cover that deductible because you know it's going to cost you that. Yeah, look at that max out of pocket. And that gives you some peace of mind when you get some medical bills at the end of this. But hopefully everything goes well with the baby. Congratulations, man. It's exciting. Awesome. All right, let's move on to Kathy in St. Paul, Minnesota. Kathy, welcome to The Ramsey Show. Hi, thanks for taking my call. I bought a cabin about a year ago. My husband and I are both 70, and we don't have any debt.

Our house is paid for. We have about $700,000 in investments. It's all diversified, and our house is worth $500,000. And we want to spend about $250,000 to $300,000. It's going to be a simple cabin. I just don't know where I should take my money from, if I should do a home equity loan or take out some of the savings. The money that you have, the $700,000, is all of it, is that just a combination of 401ks and IRAs? Yes. And that's, you said $500,000 was the house, so $200,000 in all that retirement fund? The house is worth $500,000. Okay. And I'm saying of the $700,000, it's $500,000

of the $700,000? Or is that on top of it? No, it's on top of it. So you got 700 in retirement, 500 in the house. What's your incomes? Right. About $7,000 a month. Okay. And what's that made up of? Our social security and our pensions. He's a pipe fitter and i was in the army and we have

those two okay do you have any liquid together together seven thousand cash yeah and you you have any cash in the bank that's liquid oh yeah we have about 20 grand okay so we'll call that your emergency fund we won't touch that yes well on paper, my only concern is that if you guys, I don't want you taking a HELOC or doing anything like that. That puts your home at risk, which at your age, I don't want you guys to do when you're in retirement age. And so the question is. You don't advise a home equity? No. Never.

No, no. And so the only way I would advise doing this is if you wanted to take that money from your retirement accounts and use it on the cabin you could do that here's the caveat are you going to have enough money in that retirement account to live for the rest of your lives that's right that's my question because don't i use the bank's money though when i do a home equity i'm using their money but you're leveraging your your personal residence at the time of that which you which there's no need for you to do that, Kathy. You guys have to. No one should do it, but you guys have way too much money to go that route. Okay.

You don't need to put that kind of risk in your life. Are you guys able to maybe just rent a cabin for a while every time you want to go over there? Oh, no, we bought this cabin. I mean, we have a cabin there, but it used to be a chicken coop. So you said you bought a cabin, but you're going to spend $250 on it. Is that in renovations? Yeah, it's going to be either new build or build on what's there. We don't have that set in stone.

So did you buy the land? Is that what you're saying? Because you keep saying you bought the cabin. Yeah, we bought six acres on a lake in Wisconsin,. It's got a little tiny rundown cabin on it. We paid 150 cash for it. Okay. And so you're wanting to renovate this cabin essentially or build something new? Or build something new next to it. Real simple. Okay. Are you working with a financial advisor right now or an investment professional? We have a financial advisor and she told us to do a home equity loan with a line of credit. You need to fire your financial advisor, Kathy.

Yeah. I don't like it. I want you to go on to RamseySolutions.com and I want you to click on the trusted services. And I want you to get with somebody who's going to, A, have the heart of a teacher and help you through this, because you've got the money to do this. You just need an investment advisor to kind of help you see how you can access that money without, you know, with the least amount of hit to you and make sure that you're okay in the future, since this is your big nest egg. And Kathy, the way I look at this, if you have 700 in retirement, let's say you $200 out for the cabin, that leaves you with $500 in retirement. So if you take a conservative withdrawal of 4%, that's $20,000 a year.

It's about $1,600 a month plus the $7 you guys are bringing in from Social Security and pension, right? Right. So the question becomes, are we okay for the rest of our lives living on $8,600? Does that sound good to you? Yeah, $8,600. Yeah, yeah. Well, it reduces your risk. You'll have no payment because you're not taking out any loans. And so that's the route I would go, but I would first consult with one of our SmartVestor pros to maximize the wealth that you guys have built before we jump into this dream of having the cabin. But I'm pulling for you guys.

I hope we can make the numbers work and hope you guys get to live that cabin dream real soon. Thanks for the call. This is The Ramsey Show. We'll be right back. This is The Ramsey Show. Hey, if you're a new listener to the show and you want a deeper dive on what we're all about, what are these Ramsey baby steps? What is my next step? Well, we have a great tool for you at ramseysolutions.com. Just click on the Get Started button, and we will figure out what the right next step for you is on that financial journey based on where you are today. That's ramseysolutions.com, and click on Get Started. Open phones at 888-825-5225. Kyle is up next in Baton Rouge. Kyle, welcome to the to the show hey how are y'all doing

doing great what's going on with you so uh two years ago my wife and i am 25 we bought our first home and a hurricane came through and we didn't have a good coverage for our roof because of it was the age of it so um we got an sBA loan. It's about $10,000, three years deferred payment, 1.5% interest. Right now, I'm contributing 20% to my 401k and we're saving. We have about 20 grand in savings. My question is, I just got a raise. We're making about $140,000 collectively. Should I increase how much I'm contributing to my 401k, lower my taxable income, we get more money in the long run, 7%, 10% stock market, or should I focus on paying down the SBA loan? Great question, Kyle. Well, we'll give you the short answer, which is I'm paying off that SBA

loan today. Me too. Okay. And then you'll still have, you know, what, half an emergency fund left over. And I would also lower the 401k contributions for now. And you guys are 25, you got plenty of time. There's other goals you guys need to save for, right? Are you, you're homeowners now? Yeah, yeah, we are homeowners now. First kid back in September. Awesome. That's great. What's left on the mortgage? $220,000. Cool.

Yeah, and I mean, we're maxing out both of our IRAs and we're trimming about 20% to the 401k, and she says that I saved too much. You're definitely doing great on the saving side. Really?

Do you guys have any other debt other than this $10,000 SBA loan? No, no student loans, no credit card. No car loan? She has a car loan that's like $3,000 that I could probably pay off today. Paid off. You got the money. Paid off today. I mean, wouldn't it feel good to free up the payments

regardless of what's going on with this interest rate? Yeah, that's true. It's just the mental jump of seeing the money go, I guess. Yeah. But, man, you make $140,000. For you to save up $13,000 with no payments in the world, you're going to do that in a heartbeat. Lickety split.

That's true. And so that's, I mean, that's the Ramsey plan. It's the same plan that Jade and I followed to build wealth. And there's just nothing like it. And on paper, you know, you can justify and argue and go, well, the market, well, the market lost like 18%. So there's no such thing as a guaranteed, I'm going to make seven to 10 and my loan's only 1.5. Man, when you get rid of that debt debt that's a guaranteed return right there that's right so and you have the money this isn't even a lot of work for you this is like a few clicks right yeah yeah all right no i appreciate that input and then i'd work on so if you if you

brought your investments down to 15 of your household income uh you'd still get close to maxing out the 401k. And do you have a Roth 401k? Yeah, I put five of the 20% into that. So it's really only 15 to traditional. Okay. Yeah, I would, for the future, I wouldn't convert anything, but for the future contributions, I would go all Roth at your age, man, with compound growth, withdrawing all that money tax-free in retirement. You see a million bucks in retirement, you actually get a million dollars tax-free. Right. And you don't have to worry about, you know, what are the tax implications going to be? What about my income tax bracket? You just, you pay the taxes today and you don't worry about it. And then focus on paying down that mortgage. How quickly could you pay off 220,

making 140 with no payments? Give me a year estimate. Probably. Two years? Two years, you think so? Dude, I'm telling you, if you bring your investing down to 15%, you make $140,000, could you not throw close to $100,000 a year if you don't have any payments and your income continues to go up? Yeah. That'd be a cool goal. Two or three years, the house is paid off. What's your mortgage? $130, yeah.

Right now it's $1,300, but I'm paying $15. Okay. Cool. Well, I would bring your investing down to 15% and then ratchet up the extra on the mortgage. By the time you're – you won't even be 30 yet. You'll have a paid for house and you'll be maxing out every retirement account you can get your hands on for the rest of your life. That's a dangerous man right there. Seriously.

That's dangerous right there. I like it. I'm proud of you, man. Thanks. Yeah, I appreciate it. Been listening. Y'all recommend it. Oh, well, we appreciate you listening in. Love just young people getting a hold of this stuff, Jade, going, I don't need to wait until I'm 50 or 60 to hopefully have a paid-off mortgage and hopefully do this stuff. Make a great income.

They're doing the right things. Once we get this debt gone, and you already have that savings muscle, that investing muscle. Right. That was his superpower right there. And I get it. He saw that 20K saved and it makes you think, oh, I have security here. But it's a false sense of security when you have savings, but you have debt that outweighs the savings, especially.

Absolutely. All right. Let's go to Miami, Florida. That sounds nice this time of year. Kevin, how's it going? Hey there. I'm doing real good. Thank you for having me. Sure. It's quite a surprise, really. You're surprised to get on the air? Yeah. I specifically said, hey, don't let any Kevins through, but Jenna was very kind to you today. What's going on? Thank you. Well, I'm calling because I'm kind of in a good, comfortable situation in my life. I I have some money saved. Um, I actually own the place that I live in now and I'm just trying to, you know, kind of ask, what do I do with the little money that I've saved up?

I have a couple, um, well, I have a couple of different like assets, but I have a little over 30 K, um, probably maybe 40. Um, and I'm just trying to ask you, I mean mean i'm 27 and i just really don't know what to do with the money because it's in a couple different assets what kind of assets um so i have about 19 000 in uh the stock market and that's just diversified in spy and like spy growth are these they're not single stocks? They're index funds or ETFs? Yeah, no.

I have a couple single stocks that I checked this morning and it's only about maybe $2,000 in single stocks. How much debt do you have? They're not even like small cap. So I actually am debt free with credit cards and everything like that. I've actually never missed a payment with that. But I have about $8,900 in the student loans I actually am debt-free with credit cards and everything like that. I've actually never missed a payment with that. But I have about $8,900 in the student loans,

and I do have a car lease that is expiring at the end of this year. Are you going to give it back or buy it out? No, I'm going to give it back. I have no interest in buying it out. They always rip you off. You already got ripped off, my man. They made their money. Oh, yeah. You're not coming out like a rose on this one yeah it was three it was 290 a month so i didn't feel like it was too bad considering the whole corona thing

okay so you're gonna need a car at the end of this do you have money to buy a car yeah so so um i also have um a little over i will i'm about to hit about $9,000 in the savings. Okay. And then I also have some assets in gold and silver that are actually up a little bit. How much could you sell that for? To be honest, I don't really want to sell it because it's like my second savings account almost. Like, I don't know, like I think of it as like my second savings account almost. I don't know.

I think of it as my second retirement account. I'd rather you... I mean, you're going to make way more money in the stock market than you are hanging on to the gold and silver. I mean, if you look at the return on these things over the years. I'm actually up over $1,000 now. I bought it last year when it was about $17-something on spot price. But George is talking about long-term. Man, I want you to build real wealth long-term.

So you got the student loans. Any other debt once this lease is out? No, and I am considering paying it. My struggle is that because I live in the place that I own and there's no interest occurring on the student loans, I have trouble rationaling paying any of it even at the moment until they reenact the interest on it. That doesn't make any sense. You want to take advantage of the fact that it's interest free. You don't want to wait until there's a fire for you to get

out of the house. You need to get out of that student loan house now. I'm cashing out of these stocks. Yes. And I'm cashing out of the silver and gold, honestly, and I'm getting rid of the student loans. We're going to buy a used car with cash. And that makes you completely debt free with some money in the bank. So that's that's you called this show. You're going to get our advice. That's our advice. We're sticking to it. You can build wealth a lot of ways. We just have chosen this path because it works every time, man. Thanks for the call. That puts this hour of The Ramsey Show in the books. My thanks to Jade Warshaw and all the folks in the booth and you, America. Thanks for tuning in. We'll be back real soon. Hey, what's up, guys?

It's Jade. If you love the show and want a deeper dive on your money journey, we have a weekly newsletter that gives you trending and helpful articles and tips on following the Ramsey way. Just go to ramseysolutions.com today to sign up for our newsletter. Again, that's ramseysolutions.com to sign up for our weekly newsletter.