The Ramsey Show - App - It’s Not a Dream Car if You Have To Go Into Debt for It (Hour 3)

Episode Date: May 3, 2023

Dave Ramsey & Jade Warshaw answer your questions and discuss: "Is a 529 always the best option?" "Should I go into debt to buy a car?" "How can we catch up on investing?" Have a question for the show? Call 888-825-5225 Weekdays from 2-5pm ET Join a Personality-led FPU class. Click here! Enter The Ramsey Cash Giveaway for a chance at $3,000! https://bit.ly/TRSgvwy Shop our bestsellers during the $10 Sale! https://bit.ly/TRS10Sale Enter The Ramsey Cash Giveaway for a chance at $3,000! https://bit.ly/TRSgvwy Shop our bestsellers during the $10 Sale! https://bit.ly/TRS10Sale Want a plan for your money? Find out where to start: https://bit.ly/3cEP4n6 Listen to all The Ramsey Network podcasts: https://bit.ly/3GxiXm6 Interested in advertising on The Ramsey Show? https://ter.li/s64ye3 Learn more about your ad choices. https://www.megaphone.fm/adchoices Ramsey Solutions Privacy Policy

Live from the headquarters of Ramsey Solutions, broadcasting from the Pods Moving and Storage Studios, it's The Ramsey Show, where we help people build wealth, do work that they love, and create actual amazing relationships. The phone number is 888-825-5225. Thank you for joining us. My co-host today, Jade Barshaw, Ramsey Personality.

We're here to answer your questions about your life and your money. 888-825-5225. Colby's with us in Las Vegas. Hi, Colby. Welcome to the Ramsey Show. Hey, how you doing? Great, man.

What's up? So, I just recently graduated high school, got a job as a car salesman. I still have yet to buy a car. I'm just using like a hand-me-down my dad gave to my brother, gave it to me, that I'm going to give it to my sister in about eight months or so. So my dealership, if they'll pay, if you buy a car, they'll pay your payment. They'll pay $500 of your payment every month for 36 months. And I was planning on buying a car cash, but I was just

curious if I should, you know, take advantage of this and just put as much money down to get 500 bucks a month and obviously have the money to pay it off if I need to. But you know, free money, is that something I should do or shouldn't do? Have you asked them if they will give you money towards you buying a car in cash from them? No, it's just they just do a payment that the owner of the dealership I work at will give you the money. No, I'm not going to do it. Yeah, I have about $40,000 saved, and I was just planning on just buying some cash, and if not, doing the payment. Where did you get $40,000 while you were in high school?

I never spent it, really. I hustled. I've got as many jobs. Every year since I've started working, I've pretty much tripled how much I've made at every job. What was your best job? What's the thing you made the most money at? This one. I'm making about $7,000 to $10,000 a month, give or take.

Okay. So you're already selling some cars. Yes. Yeah, I've got a smiling face, I guess. And you graduated from high school last spring? Yeah, about, yeah. Good job. So you're 18 years old? Yeah, about, yeah. Good job. So you're 18 years old?

Yes, sir. Wow, very impressive. And I was just planning on buying something, like probably a truck, something nice, not too, and they give you crazy money off on trucks. Yeah. Well, here's, the way I ask these, we answer questions like this is which of the answers puts me in the best position giving, given anything can happen 10 years from today.

Okay. 10 minutes from today. If that's all you're thinking about, you do this deal, right? Cause it's really juicy. It really sounds appealing 10 years from today um you work there another year and a half and something bad happens to the dealership or whatever and they just decide they don't want you anymore and you get to leave for whatever reason you've still got 18 months of $500 payments left

because they're not going to pay these payments if you're gone. Yeah. Yeah, I was just planning on just saving the rest of the money I have and having them pay the payment, and I could pay it off cash or something like that, get fired or quit or find something better. Yeah, and I assume this needs to be a new car for this deal right it does yes yeah so you're going to lose your butt they go down they go down in value like a rock if they were really if they really wanted to help you now they're this they're

trying to get him to be a part of the what he's selling part of what you're selling so you can you can talk about you just bought the same thing the same way. And that's the reason for this. It's not necessarily to be a blessing. Um, the, uh, so now I,

I, I, if you were, uh, like one of my nephews or something, I would tell you not to do this. I, I,

I, I understand the appeal of it. It sounds kind of fun. It sounds kind of cool. It sounds like there's nothing could go wrong, but number one one we don't tell people to buy new cars unless they have a million dollar net worth because you can't absorb the loss you're going to lose your butt you buy a forty thousand dollar truck whatever it's going to be worth half of that in 36 to 48 months and so you need to be buying things that are going up in value, not down in value.

This is your largest asset, and it's going the wrong direction. And that's the problem with the scenario. So you're being tempted into something that you're not financially really ready for, even though you have the money to pay cash for it. But you don't have the net worth to absorb the loss of value that you're going to experience here. And so we tell folks not to buy a new car unless you got a million dollar net worth. So that would be the answer to the question. And in this case, you're signing up for car payments. I know they said they're going to pay them, but not if you're not there or they're not there.

That's true. And so you're on the hook and you're going to find out when things go sideways the way this stuff looks it's not good so no i i don't want that um you know at all if you were going to write a check and pay cash for the car today i would tell you not to do it too by the way same thing right brand new brand new truck you know and and i'm glad you're making money selling cars i'm glad you're helpful to people and there's nothing wrong with that. I appreciate that. I appreciate a good salesman. I really appreciate that you're doing this at 18 years old.

You're really pulling this off. Well done. That's good. Just go make yourself a big old pile of money, man. And don't get sucked into owning a new car. And that's exactly what I would do in this scenario. Now, if you want to get rid of the little dinky car and get you a $10,000 truck and you pay cash for it out of your money, that'll be fine.

That'll be fine. But if the only way you get to work there is you have to be a customer, that's a problem. That's a problem. I agree. Open phones at 888-825-5225. Alex is in Baltimore. Hey, Alex, how are you?

How are you doing, Dave? Good. Good. How can we help? My wife and I currently, we're taking your piece, University at our church, currently on step two, but we are kind of looking ahead at the college plans for our two children. We had a small savings account for each of them.

We moved our daughters over to a 529, but our son, he's six years old and he's autistic. And we're not quite certain about his college future, so we're very hesitant to set up a 529 for him and just kind of wanted to get your input about whether there's any other options or should we just kind of take the chance and go with the 529 for him uh i wouldn't decide for his future yeah i wouldn't i would just i would just have a mutual fund that's in your name and your wife's name and you just put a little label on that file with his name on it but he

doesn't own any of it he has no rights to it it's just your money you're saving for him the same amount you're saving for your daughter for college but we're going to help him with uh maybe he's able to maybe he's high functioning able to go going to help him with maybe he's high-functioning, he's able to go to school, higher education, or maybe he's going to go trade school, or maybe he's going to study code or whatever. I don't know. But you'll have some money earmarked for him,

but that has no constraints on it. The only disadvantage to that is you've got to pay taxes on it as it grows. But whoop-dee-doop-dee, you need the control of it. You don't need it dropping into his name um and he has legal rights to it and then uh you know make some bad decisions that's not good for him or you so this is just a taxable brokerage account it's just simple invest open a mutual fund open a mutual fund and that's yours yep but you just kind of write his name on the outside of the file in your file drawer so you know that that that's little Henry or whatever his name is, right?

That's his deal, right? And he's got access to it whenever he needs it. There's no penalty for that. No, none whatsoever. But you'll pay taxes on it as it grows. This is The Ramsey Show. Jade Warshaw, Ramsey personality personality is my co-host today thank you for joining us america we're so glad you are here uh austin is in atlanta georgia hey austin welcome to the ramsey show hey thanks for having me sure what's up hey me and my wife, we bought a home in 2020. It's not our forever

home, but it gets the job done. When we get the baby step six, should we continue to focus on paying down the home or build a nest egg to assist with our forever home? We plan on building about five to eight years from now. I mean, if I were you, Austin, I would continue paying down. I mean, well, let me find out. Where are you in the baby steps she says six okay i missed that maybe step four or five and six you said right yeah so we're we're uh we're on step two right now but we're we're looking to have all that done within the next eight to ten months uh i'm doing long-term planning okay how old are you i um 27 okay uh let me help you with this there's no such thing as a forever home except heaven forever home is just an excuse for people to spend more

and and do do the most yeah i mean you can do whatever you want to do buying a home and you're still going to move again i mean there's the last if you build it at 68 years old it might be your forever home but other than that your life's going to change and you're going to move again so that that's a concept that's just completely bogus so anyway aside from that just pay off your house because here's the deal if you're going to sell the house and move up in house which is really what you're saying that's fine i got no issue with that at all but when you sell your current home and it's paid off they're going to give you a check for the whole thing.

It's not like you're spending the money. It's not gone. You're just paying off the mortgage. It's still there in equity. Does that make sense? Yeah. Yeah. So pay it off.

And then that gives you more options. And then sell it. And they're going to give you a check at the closing. Use that check to buy the next house that's the upgrade home. Right. Because here's the upgrade home right because here's the other part of that people put a nest egg aside and they think i'm just gonna sit on top of this money for when the right time comes and then before you know it uncle boo-boo he's

he's he's having a uncle who uncle boo-boo is in everybody's life that's when the wedding in the caribbean comes boo-boo wedding in the caribbean Uncle Boo Boo. Wedding in the Caribbean comes. Uncle Boo Boo. I had an Uncle Bubba. Uncle Boo Boo has a real estate project he wants you to invest in. Uncle Boo Boo tells you to buy cryptocurrency. Everybody has one, Dave. Man, this guy's evil. He is.

He's got a horrible name, too. But everybody's got one. Everybody's got a horrible name, too. But everybody's got one. Everybody's got one. And he's the one that steals from that nest egg that you say, oh, I'm going to save this for my forever home. Something always pops up. So when you go ahead and pay off your mortgage. You find bass boats are on sale. Yes.

See, that's Uncle Boo Boo. Uncle Boo Boo buys bass boats, too. He tells you to go buy it. This guy gets around. He's like the boogeyman of finance. I love it. Uncle Boo Boo. Who knew?

Yeah. Another jadism. It's a jadism. Another jadism. It is. All right. Malachi's with us in Princeton, Kentucky. Hey, Malachi, what's up?

Yes. Thank you for having me on your show, Dave. Sure. How can we help? My question about it is is i finished baby step one now i'm on baby step two i'm actually moving away um i'm going back to uh my hometown and my ex-wife i co-signed with on her student loans and on her car. The student loans are $7,621. They have offered me, that's gone to collection. They've offered me a $5,000 payoff,

and if I were to do that first instead of taking care of my smaller loans, which I know that you say, you know, you pay your smallest loans off and you move on to the next and the next and the next but would you you have five thousand you have five thousand dollars say again you have five thousand dollars it's five i do not where you're gonna get it you're gonna have to pay it all at once okay because the offer is not payment i going to get it? You're going to have to pay it all at once. Okay. The offer's not payment. Because if I were to get that off... You don't have $5,000. Yeah.

These deals only work, and they're usually for a limited time. For a lump sum. For a lump sum. Yeah, because whenever I'm moving, I'm looking for my full-time job right now. But I've already got my part-time job lined up. I'm in the National Guard. I've been in there since 2018. I'm going to be pulling three jobs, getting my kids every weekend

because I'm paying $1,200 a month in child support. And we used to – I actually – I took their class in high school. I had $10,000. I had an 830 credit scores. So you must have not learned anything in my class. Yeah. Well, I got with a girl, and I got her pregnant. And now I have three kids.

And now we're divorced. I've actually been separated since July. It got finalized in February. I'm sorry. I got this new place in November, and I've had to ask for money from family members and stuff like that because all this debt that we had racked up for the life that she had wanted. In the divorce decree, was she supposed to pay the car and her student loan?

Actually, my lawyers and her negotiated because it was so much for the student loans, I'm responsible for half. For half of the $7,000. And her car would be refinanced after that got out of collection into her name completely and that would get the car out of your name okay yeah so yeah yes you do need yes you do need to pay the student loan and yes you do need to go shade a lump sum when you have a lump sum but right now Malachi you don't have any money yeah because i'm actually

i'm moving back into my parents home so right now what you're going to do is you're going to get on a detailed budget you're going to live on nothing you're not going to go out at night at all you're going to work all the time and you're going to start paying these debts off and when you can get enough debt paid off that you know you pay off the little ones and that'll get you more cash flow because you're paying payments on all this crap except her loan. You're not paying on her loan. Actually, I am, sir. I thought you said it was in delinquency.

It is. Here lately, I've been directly sending it to her. Yeah, so stop. Don't do that. Yeah, so stop sending her money and stop sending the student loan people money tell them where she lives yes sir they already know yeah tell them tell them to call her i'm the co-founder they're i know they're hounding me i know just tell them jump in the creek you're not paying it i'm broke okay i'm broke i'm divorced and i'm

broke i don't have any money i'm not paying it I'll pay it when I've got some money. How much other debt have you got, not counting this mess? I've gotten down from right now as of today, I have $410 in one credit card, $239 in another. The car that I originally bought for her that I got throughout the divorce is $13,354. So $20,000 makes you debt-free. I want you to go make $20,000 in the next six months extra and be 100% debt-free. And cut up the credit cards. Cut up your credit cards your car her student loans everything completely dead yeah i want you to work like a maniac right now

this is all happening to you and i'm trying to get you to happen to it there is not a technique that fixes this except money and you get money from working more yes sir and that's what i'm that's what i'm doing actually you're about to start but you don't have any money right now and you don't even have a job right now yes sir i've i've been on contact with phones i've already got one part time job there you go i'm going to be doing after my full-time job good i'm doing the national guard and i'm gonna i just got done with an interview today. As soon as all this money starts coming in, pay off those little credit cards,

and then save up $5,000 and call the student loan people and offer them $5,000 lump sum. Until then, don't give them any money. That offer is going to continue to be good. It's in collections now. Just call them up and go, I can give you $5,000 now. If it's two months from now, they'll take it. And then that clears that. Then all you've got left after that is your car.

And then I want you to pay that off in about three months. And really, you should be debt-free in six months. You're living at your parents' house. You've got no overhead. It only takes $20,000 to pay off everything. But all this crap has been happening to you. Divorce, kids, job loss, people calling you and hounding you everything's happening to you and it's time for you to stand up and happen to it and start telling this money

and these people what to do instead of doing what they say to do it's time for you to bust this thing in the nose and you're about ready to do it i can hear it but i'm telling you this is how you get after it. Get it. Get it. Jade Warshaw, Ramsey Personality, is my co-host today. Thank you for joining us, America. Open phones at 888-825-5225. In the lobby of Ramsey Solutions, on the debt-free stage, Craig is with us. Hey, Craig, how are you? Hi, Dave. Great to have you. Happy to be here.

We're honored to have you, sir. Where do you live? Phoenix, Arizona. Oh, fun. Very cool. How much debt have you paid off? $374,408. Whoa!

How long did this take? 1,638 days. 1,638 days. What's that come out to be? A little over four and a half years, but who's counting? Yeah. Okay. All right. Wow. All right, man. Oh man. And what was your range of income over 1,638 days? Started about 40,000, got up to about 200 at one point. Way to go. Cool. What do you do for a living?

I own a legal document delivery business. Okay. how'd you get your income up so far well um when i took everything over and did everything i could to drive businesses as much as i can um it worked yeah yeah it worked i i didn't hire anybody on i took the role of about four to five people i would say just worked all the all the time? Yeah. Like a lot of hours. A lot. You said when you took everything over, did you buy the business? I did. I bought the business. I worked for it for about, I want to say, five or six years before I took everything over.

Okay. Wow. Good for you. So what kind of debt was $374,000? It was a little bit of credit cards, a little bit of a car loan, and about $360,000 was the business loan. Oh, okay. Wow.

From buying the business. Correct. Okay. But now it makes $200,000 a year and you have no debt at all. Yeah. Yeah. Pretty close. I have a mortgage, but that's next.

Okay. All right. Well done, sir. Thank you. Very well done. Congratulations. What happened to make you go on this journey? Yeah.

You know, so many people would take on business debt and just go well it's it's the business it's not me they'd be wrong in that but what made you say i'm going to tackle this so i'd say it started about eight or nine years ago um i was renegotiating my lease with my apartment complex and they were making it to a point where it was i couldn't afford it at the time. And I was thinking to myself, man, it'd be a lot easier to deal with this if I didn't have a car payment. Or how great would it be if I didn't even have to pay rent? It was my biggest expense. What if that didn't exist? Fast forward a couple years and I'm delivering papers at night and listening to your show.

And I learned that those things are optional. I don't need to have a car payment. I don't need to have a car payment. I don't need to have a mortgage payment at some point in my time. That is optional. And so I started to get a little bit more serious about it, but not super into it. I stopped using credit cards, but for the most part, didn't really create a budget. And then things didn't get very serious until one night I had to fill a prescription for about $50 and I didn't have the a budget. Then things didn't get very serious until one night I had to fill a prescription for about $50 and I didn't have the money for it. And that was the point where I decided that was it.

This is never going to happen again. I'm never going to worry about filling a prescription. I'm never going to worry about going hungry. I'm never going to worry about my rent or, or, or a mortgage. This is over. And I resolved that I was going to get this completed as fast as I possibly could.

That's an interesting, well, I mean, you did perfectly, but it's an interesting process. I had never thought about it that way. First revelation was this is optional. It's not required that I stay a slave my whole life. And then you went from optional to pissed off and said, I'm not living like this. And that was the next step was this healthy anger. Yeah.

And so but in order for the anger to kick in, you first had to realize this. It doesn't have to be this way. Right. And then you're like, had to realize it doesn't have to be this way. Right. And then you're like, no, it really is not going to be this way. You know, it's like there was a progression there. You see what I'm talking about? That was interesting. Very, very insightful.

Very cool. Good for you, man. Thank you, sir. You have worked your butt off. Yeah, there were a lot of, I think 12-hour days was a minimum. Yeah. There was a solid six eight week period where there were 16 hour days yeah um i was it worth it yeah um to not have that hanging over my head anymore why did you not drag it out three more years and just take it easy i think you did right

by the way but i'm just curious for other. So I think that would be probably the natural or perhaps even instinctual option to go with. It'd be wrong, but I'm just wondering why you didn't. Yeah, I think it comes down to my why. It's a little bit selfish, but I want to walk the earth. I don't want to be beholden to any one person or something that I don't want to naturally be spending my time doing. After doing this, I'm so guarded about my time because it's so precious. Usually, I mean, the last four and a half years, I haven't had very much of it.

So I want to spend that how I want to do it. Amen. Ooh, I like it. I like it too. You're speaking my language right now, Craig. All of that. It's just, it's a different sort of freedom. And I love what you said about culture is telling you,

you need debt. You need this to survive. And you said, I don't think I do. And I don't think I want that. And I just love that. So for anybody watching, tell them what's the one thing that you've learned on this journey that you've taken into your life and it's like from now on, this is

that thing. What is it? Well, I think I wouldn't be doing it justice if I only said one. Hit me with a couple. Sure. Yeah. I think the budget was pretty critical to doing everything. I don't think there was a way to do it without a roadmap. I would tell people to find ways to stop trading your time for money and trade your work for money. I was able to double up on a lot of my work. It would have been impossible if I had a finite amount of time to trade for money. And then that why, I think that why was a big driving force. Yeah. Well done, sir. Who was your biggest cheerleaders? Well, my brother and sister were there the whole way.

I inspired both of them to get out of debt. My brother is still working on it. My sister actually graduated college debt-free. She paid all in cash Wow she just paid off her car so she's completely done Greg my my right-hand man at the office he was there for me the whole way Brie my girlfriend's with me here today all right very cool good job man thanks sir very very proud of you're impressive young dude well done well done well done 374 000 in 1638 days you gotta love it all right we've got

the live and give bundle for you the financial or the total money makeover book a financial peace university membership for a year and of course the baby steps millionaires book you're on your way to that one for sure and you'll have those to read and or give or whatever you want to do with them thank you for making the trip all the way to nashville and we appreciate getting to hang out with you all the way from phoenix it's fun thank you for having me very very well done all right craig from phoenix arizona 374 000 paid off in 163840,000 all the way to $200,000. 100% debt-free, except the house. Got his business paid off.

It's all about it now. Count it down. Let's hear a debt-free scream. Three, two, one. I'm debt-free! Yeah! Yeah! This is how it's done

Well done, well done, well done I love it, I love it He's a thoughtful guy He thinks differently and I love that Well, you know, if you don't think differently You're not going to be different And you don't want to be normal in this culture today I know, that's right

Normal is broke Yeah, normal is broke And we don't want to hang out with that We don't want to be normal in this culture today. I know that's right. Normal is broke. Yeah. Normal's broke and we don't want to hang out with that. We don't want to be that. And you know, you're going to be who you hang out with. So be careful about that because they'll tell you that is not optional. And he decided it's optional. That's a great word for that. I've not put that word on that. I wrote it down. I was like, that's good. Debt, debt is optional. You don't have to live like that. Very well played. You know, the other thing that's kind of going around right now is this idea that I don't want to work much.

So I'm going to, in air quotes, work from home, which means I don't plan to work much. Or I'm going to quiet quit. Or I'm going to do all that. You know, the laziness that has become popular is quite the opposite of old Craig over here. Yeah, it is. Craig's on fire, man. He's getting it. Yeah. He's getting it.

Meanwhile, what's being lazy getting you? Never met mediocrity turning into success yet. And this guy right here, he's successful. Well done, Craig. Proud of you, man. Very proud of you. This is the Ramsey Show. Our scripture of the day, Ephesians 6.10, finally be strong in the Lord and in his mighty power. Muhammad Ali said it this way, he who is not courageous enough to take risks

will accomplish nothing in life. Well, there you go. Jade Warshaw, Ramsey Personality is my co-host today. Justin is in Colorado Springs. Hey, Justin, what's up? Hey, Dave, how are you doing? Better than I deserve. How can I help? Well, hopefully you take it easy on me and I won't be a bad segment on a YouTube or something. So if you're ready, I'll go ahead. We'll try. Well, I'm basically, I'm looking to, I need to make some more money long-term wealth wise. And I have an idea of where to start, but I kind of want to get your advice on that. So if you need me to give you some just basics, I can. Well, what's your question?

I mean, what are you talking about? I'm looking to build a little bit more long-term wealth, and I feel like me and my wife are a little bit behind. How old are you? 32. Oh, yeah, you're never going to make it. You're so old. Oh, my gosh.

What's your household income? Household income, let's see, we're about 230,000. Oh, my gosh. What's your household income? Household income, let's see, we're about 230,000. Oh, my. Justin. Yes. If you're not going to make it, then I'm screwed. Well, that's mostly the wife. I'll have to give her most of the credit. But, yeah, we've just been saving, honestly, and I think it's getting time in our lives where we need to start making some more riskier moves

because I just looked at our statements on our savings account, and we're getting just, it's laughable, our interest rate on our savings account. How much do you have in that savings account? Liquid, we have in that savings account about $240,000. Okay. And it's making one percent or something yeah we got like 180 or 200 bucks every month and it's just i'm trying to tell my wife this is we got to do something else and uh together i do agree that needs to change yeah all right so what we teach folks justin to uh build wealth and to lay a foundation to build

that wealth with is a process called the baby steps. That's right. Okay. So do you guys currently have any debt? The only debt we have is a $27,000 truck loan. Okay. So when we walk through the baby steps, baby step one, which you have, this is $1,000 saved. You don't have to worry about that because you got that laying around. After that, we're going to pay off all of our debt except the mortgage using the debt snowball. You've only got the one debt, right? You can pay it off today. Pull it out of your savings. You're debt free today. The next thing after that is you're going to go to baby step three,

which is getting three to six months saved. Now, in you guys' situation, do both of you guys work? Yeah, we're both working. Okay. Solid type work, or are you seasonal? Is there any reason that you would want six months above three months? Of expense. No. We just had a little one, but other than that, she's still working.

I'm working, and she's a nurse practitioner, and I'm a power lineman. Okay. So for fun, let's call your emergency fund $50,000. Yeah. Now, the emergency fund, Justin, does not earn money. It's there for protection of the things that do earn money. Mm-hmm. So you said you had how much in savings, $200,000?

About $240,000 total. Okay, $240,000. In a liquid savings. Okay, $240,000. Okay, so we just spent $27,000 and paid off your car, and then I spent $50,000 for the emergency fund. I allocated some of that. So that's $75,000 out of that.

So we're around $140,000 right now left over. Okay? Are you with me? And you've got a little one. Now, what we do after that that after you've got the emergency fund in place and you're debt free but the house then we start working what we call baby steps four five and six simultaneously four is i want you to start investing 15 of your household income income into good mutual funds in retirement accounts 401ks roth roth iras with a match without a match whatever you've got that you can do up to 15 no more than 15 going into retirement

but i want that much going in there and so that's about out of your monthly budget that's not out of this in out of this savings but out of your monthly budget. That's not out of this savings, but out of your monthly budget, that's going to amount to about $30,000, $35,000 a year, okay? Okay. And you've got a really good income. That alone, if you do that in good mutual funds, will make you a multimillionaire when you are 65. If you just do that.

And we're not going to stop there, okay? But if you just do that, you're not going to stop there okay but if you just do that you're going to be a multi-millionaire then once you're doing that now we go on to baby step five which is kids college now i would sit down with an investment professional click smart investor pro at ramsey solutions.com and uh start a kid's college fund for your new little one, and you can throw $10,000 in there. So now we're down to $100,000. We've already got that established, and we've already put a good amount of funds to that as well, by the way.

So is that in good mutual funds? What is it called? $529,000. $529,000, but is it mutual funds? $529,000, yeah. Is it mutual funds? I'm not sure. I'll have to double-check that. You need. But is it mutual funds? 529, yeah. Is it mutual funds? I'm not sure. I'll have to double check that.

Okay, and you need to make sure it's in good mutual funds, just like the 15% in Baby Step 4 is. Then Baby Step 5 is we're going to concentrate on – or Baby Step 6 is we're going to concentrate on paying off the home next before we do additional investing beyond the 15% because when you don't have a house payment or anything, you got so much stinking money to build wealth with. It's unbelievable.

Okay. So I'm going to throw that other hundred, hundred and a quarter. If you don't need to buy a car or something else out of it that you may want to set back something if you got a purchase coming, but if you don't have a purchase coming, I'm throwing all of that at the house. What's your mortgage balance? We owe about 220, I'm throwing all of that at the house. What's your mortgage balance? We owe about $220, I believe, on it. Amazing.

I love this. So we throw $120 at it. We got $100 left, and you're going to be debt-free, house and everything, in two to three years when you're 35 years old. What's this house worth? I think it was just off just this is just off realtor.com it's probably not very accurate but about 450 460 okay so in three years when it's paid for it's worth 600 by then what i'm outlining you're going to have three or four hundred in your retirement

accounts i'm what we're outlining is going to have you have your first million-dollar net worth. You'll be a millionaire by 36 or 37. Oh, come on. Oh, boy. I thought this was going to go downhill. No, this is very good, Justin. I was worried that we weren't investing enough right now because we only have one. You're not. We don't do.

Okay. You're not. You need to be putting 15% aside, and this money doesn't need to be laying in savings. But it's not something you need to go the woodshed over.'re making a lot of money and you're not spending it all way to go yeah you know that's awesome to my wife oh that's awesome i mean she's awesome then you guys so the bottom line is you don't need money laying there like that 120 not working any harder than it is i'm going to throw it at the house so it works a little harder and then let's the next big thing. It doesn't mean we have to live on beans and rice because you're doing really well, but I just want you to be very intentional. Any money beyond retirement,

beyond that 15% that you can find in your budget that you don't need to have a reasonable life before you put it into a savings account again, let's just chunk it on the mortgage and finish that mortgage off. You got it. $33,000 a year finishes that mortgage off in three years. Okay. And you make $200,000 or something. That's right. Yeah. I mean, you guys could get.

You're just doing so good. Yeah. You're a YouTube cut, but it's a good one. Okay. I was a little worried because I just started getting into a little bit more and it's like if you're not investing when you're younger you know and well you are and all we did here is fine-tune the smart you already took you already had smart and we just added the icing on the cake to make it run just a little bit smoother okay yeah and i was worried you're gonna get mad

at me that we got we did just get it recently a nice decent truck but uh it was we call it the baby mobile yeah i'm not mad at you but never take out another car payment car payment is middle class thinking okay pay cash for your cars the rest of your life okay it'll make you it'll make you think about your cars different oh for sure okay Okay, awesome. Well, that's great then. I thought that's all good. You're going to pay it off today, right? Yes, I'm going to go to the wife right now and tell her what you said,

and then we'll see what she says. Okay, all right. Hang on. I'm going to send you a copy of the book Baby Steps Millionaires because you are on track to be one very soon, my friend. That's exciting. He's a good one. He's a good one, and I love that it's showing that it's not too late.

If you're in your 30s and you're just now getting around to investing, I think you're going to be all right. I think it's going to be okay. Well, and isn't it interesting how they were working together? Yeah. I'm not going to pay it off until I talk to her, but then we're going to pay it off. There we go. I like it.

Yeah, we're not yelling at you. Nope. Not a bit. You're a good one. Not a bit. That puts us out of the Ramsey Show and the books. We'll be back with you before you know it. Yeah, we're not yelling at you. Nope, not a bit. You're a good one. Not a bit. That puts us out of the Ramsey Show and the books. We'll be back with you before you know it. In the meantime, remember, there's ultimately only one way to financial peace, and that's

to walk daily with the Prince of Peace, Christ Jesus. Hey, what's up, guys? It's Jade. Look, if you like what you heard in this episode and want to know more about getting started on the Ramsey Baby Steps, go to rseySolutions.com and click the Get Started button. We'll help you figure out the best next step for you based on your specific situation. That's RamseySolutions.com and click Get Started.