The Ramsey Show - App - Should I Be Discouraged by the Returns on My Investments? (Hour 1)

Episode Date: February 22, 2023

Kristina Ellis & George Kamel answer your questions and discuss: "I feel guilty being a working mom", "Should I be discouraged by the returns on my investments?" Student Loan Forgiveness updates, from the blog: Biden Plans to Forgive Up to $20,000 of Student Loan Debt for Borrowers: What Does It Mean for You? "Can we save up for a house and invest at the same time?" Have a question for the show? Call 888-825-5225 Weekdays from 2-5pm ET Want a plan for your money? Take our FREE 3 minute assessment: 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

🎵 Live from the headquarters of Ramsey Solutions, broadcasting from the Pod'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 your host, Christina Ellis, Ramsey personality, joined today by my co-host and, Ramsey Personality, joined today by my co-host and fellow Ramsey Personality, George Campbell. We're taking your calls at 888-825-5225.

Let's get to the phones. First up, we have Sam calling from Cleveland, Ohio. Hey, Sam, welcome to the show. Hey, hello. Thanks for having me. Hey, thanks for being here. How can we help? Yeah, so I have an 18-month-old baby that's in daycare, and I've been struggling with guilt for being a working mom. And I've been torn about leaving my job for the past year, and it's been kind of impacting my home life. And my primary fear is just

like, you know, I have a good income and if I pause some of our aggressive financial goals, is that going to be okay to like take that time, take a couple years to be a stay-at-home mom and cause those aggressive kind of financial goals we have? Well, I'm glad you called. That's a lot to process. I'm curious a little bit more about the bigger picture. You said we, so is your husband working? Yeah. Yeah, my husband works. He has a pretty good job as well. Okay. Tell us a little bit more about your financial goals.

So it sounds like you have debt that you're trying to get out of. Is that correct? Actually, well, we have a mortgage, but other than that, we're debt free. We paid off our student loans. We have no credit card debt. We recently paid off our car. And I think we have an aggressive financial goal of like paying off our house in five years. And I know it's like, it's not something we need to do, but we've like, after we pay off our debt, like we just want to pay off everything. And that's kind of that mindset has gotten into our heads. And now that like, I don't know if it's worth to kind of

give that up. And we're also like saving for college and for our 18-month-old. So it's just like, can those things pause and wait for me to take a couple years off? Well, Sam, I hear a lot of emotion in your voice. It sounds like, yes, those goals are important, but that being a stay-at-home mom also is important. How does it kind of weigh in your head? I don't want to miss the early years, but I'm also, I guess in my family, I've always seen working moms. So it's just, this is like a really hard thing to do for me. What do you want? I mean, what do you want? I want to stay at home, but I'm scared to do it. What are you afraid of? So if we take this whole bad mom thing off the

table, because either way you're going to get yelled at, right? If you're a working mom, if you're a stay-at-home mom. So let's just take that off the table and put down the shame and guilt and the baggage and say, what is right for Sam? Could you guys live off of your husband's income? Yeah, we could. And then how much longer would it take to pay off the house? Well, I mean, we're paying like times three right now, our mortgage payment. If I stopped working, it would probably take 10 years. 10 years instead of five. Yeah.

Okay. So let's walk through a worst case scenario. Worst case scenario, you get to have your dream of being a stay-at-home mom for a few years for as long as you'd like, and you have a mortgage for five years longer, and you will survive. That's a worst case scenario. How does that sound? Yeah. That's what I'm seeing on paper. Obviously, taking the emotion out of it, just on the facts on paper, it's a reasonable situation. There's people who stay at home who are in much worse financial situations, drowning in debt, and they still make it work. So the fact that you guys

have worked so hard to get to this point, you're allowed to do things like this without guilt. Yeah, I guess I'm worried though still about long-term. Like I have a really nice 401k plan with my job. We're pausing for a few years. How will that impact my retirement? It's not just the mortgage. It's just having that income. Well, crunch the numbers. Go, okay, if I left my job, my 401k sat there, we rolled it to an IRA, we continued to invest that money, what would it turn into? Okay, it's going to be a million five instead of two. Big whoop. You still get to have the retirement you want. You have those years with your kid. Because here's what the other side is. You don't do this.

You keep working and you live with regret for the rest of your life about the years you could have been with your child that you'll never have back. We can always get more money. We can't get time back. And you guys have put yourself in such an incredible financial position to be able to do this. Well, and my heart goes out to you because we've had this conversation in our house before where we're talking through, you know, the balance between being a working mom and just absolutely adoring our kids. And there have been times where we've made sacrifices and maybe pulled back on a project or not gone as hard at work because I asked myself that question, you know, when I'm 90 years old, when I'm on my deathbed and I look back am I going to look back and go man we didn't pay our

mortgage off five years earlier or am I going to be grateful that I took that time with my kids and it's like when you go really big picture of like death but I've seen so many studies of like people who were passing away when they were older and it's like they didn't miss you know the money we care about money here. That's important. We want you to be financially strong. But at the end of the day, those memories with your kids, this beautiful time where they're young,

like that's going to be the stuff you remember. Yeah. I guess the other fear is that, you know, I've worked really hard in my career to be where I'm at today. If I, you know, take a few years off, what is that going to be? What's the impact going to be to my career long term? I feel like I will be taking a couple steps backwards. Yes, it's worth it, but that's another thought I have.

Do you have any mentors? Yeah, I do. All working kind of mom mentors, yeah. Do you have anybody in your life who has done what you're thinking about doing, where they left the workforce for a period of time and then came back and they're crushing it? No, and it's kind of frowned upon in my family because no one had the opportunity to do it. I think that's my challenge to you today is to find that woman. Look for that woman who has left for a while and has come back and is now crushing it in their career. Because I know we have people at Ramsey who are directors and who are doing amazing things here in house

who were gone for 10 years to raise their kids. And now they went back in the workforce and they're doing amazing. And there are thousands, millions of women who have done that. I just think that right now your scope is a bit limited because like what you said, your family is against it. Women in your job aren't doing it. And it's kind of feeling like a unique path. But there have been tons of women who have done it and done it successfully. Sure, sure.

Don't believe this lie, Sam, that you are not going to have any, you know, economic worth if you stay at home for a few years with your kid. Like Christina said, the truth is a lot of people go back to work. And who knows, you might even find a better career when you come back, if you want to come back. Who knows? Either way, there's no wrong answers here. The only wrong way to do it is to put yourself in a financial pit that you can't crawl out of. And now you have financial stress on top of all of this. So you've got to deal with the opinions of family. But you know what? They worked hard to raise you so that you could live the life that you want. And this

is what that looks like. And it may not be the opinion you're looking for. And it's kind of a scary leap. I think a lot of people who've been through it will tell you that they had those fears too. And it's kind of nerve wracking. But I know that I've talked to a lot of the women here, and they didn't regret it. We're wishing you well, Sam. We'll be right back. This is The Ramsey Show. Thank you. we're taking your calls at triple eight, eight, two, five, five, two, two, five. You got something on your mind. You just want some friends to bounce it off of,

give us a call. We're excited to talk to you. Next up, we have Amy calling from Dallas, Texas. Hey, Amy, welcome to the show. Thank you. Hey, how can we help? I should be relatively quick, I think, but I've been investing now for about 13, maybe 12 years.

And I did my calculation. I have about an 8% return so far. Should I be discouraged by that or should I kind of think, you know, we're in kind of a downturn and overall it should end up still being 10? Well, good job with that. 13 years. Are you completely out of debt? Yeah. Maybe 7.

Awesome. That's awesome. So what is your net worth as of today? 2.2 million, I think. Amy, I think you're going to be fine. I think you're going to be, I wouldn't be discouraged with a 2.2 million. I asked George because 1% when I look, when I'm 65 is a huge amount of money. Oh, yeah. I mean, a 1% swing, you're saying under or over. If you get 9% instead of 8%, it changes the numbers drastically. Yeah, by like $15 million. And so you're worried, am I going to have enough? Is that really the heart of the question?

That's not really the question. Really, the question is, because Dave says numerous times, I should average 10 to 12. Well, it's not that you should. It's just if you look at the S&P 500 since the 1920s and 30s, the average return has been. Now, there's been times where it's been down 30%. There's been times where it's up 30%. And so I would not be discouraged by looking at a snapshot of even 12 years and looking at that because you're investing over more like a 30-year period, right? Sure. And even a 30-year period getting 8%, you're still going to be wildly wealthy comparatively to if you didn't invest. Sure. And so I don't look at it in

snapshots because you're right. If I looked at my 401k for the last year, I'm going to throw up when you see negative 16%, negative 18%. It hurts your heart when you're like, I'm dumping money into this and the number is going down. It's going the opposite way, right? Yes. And so I encourage you to, you can look at it every so often, but the fact that you're here with a 2.2 million net worth at what age are you? 33. At 33 years old is mind-boggling. My husband's 32, yes.

How did you guys get there? Because most people are going, is Amy crazy? Because she's saying, should she be discouraged? And here she is with $2 million at 33 years old. I mean, I'd like to say I did the baby steps, and I really did. It's okay if you didn't. I was never in baby step two. I never had any debt. Okay, so you just avoided debt completely.

And what age did you start investing? As soon as I got out of college, 2011. Okay, and that was 12 years ago. And beyond that, has anything else changed? Did you get an inheritance? No. This was all just 401k, your house, your cars? Yes, sir. What do y'all do for a living? Surprise, surprise. We're both engineers. Love it. Love it. Hey, how are you invested right now? What are you investing in? So right now it's a mix between personal residence, 401K, my company stock, which I am diversifying just gradually, and obviously Roth IRAs.

And are those in mutual funds, index funds? I mean, maybe mutual funds. Yeah, I mean, ETFs sometimes, but not for, I mean, it's still, I do 10%, you know, track record over 10 years and all those things. Do you have an advisor? A financial advisor? I do. I do.

That's why I'm like wondering, it's always my fault, right? I'm not going to blame him, but I'd like, should I make any changes? Well, I mean, it wouldn't hurt to get a second opinion. We've got great smart investors. If you want to sit down with them, you can find them on the Ramsey Solutions website. But it is nice to sit down just to double check to make sure that they're investing your money well. Have you thought about getting a second opinion? Yes. And, you know, obviously, I'm always learning, right? So I'm always, and it's, you know, as we said, it's him giving, him advising me and I make the final decision. So it's always my choice of what I'm investing in.

And obviously I don't ever invest in anything that I don't actually understand. So that's why I'm. Well, if you want some encouragement, just look at history. You can go look at charts of the S&P 500 over the last decades of years. And I'm looking at it right now and I'm saying, okay, actually out of the last 12 years, we were only down two years. And here's what you're looking at. 2022, we were down 18%, which is skewing your average number, isn't it? Exactly. I am an engineer.

And so 20 years from now, we're going to have way more up years than down years, if you just look at it historically, and that's going to change that average number. So I wouldn't focus on that average number and lose sleep over that specific number, because it's not really an accurate representation. What we're trying to tell people is, over the course of time, your entire career, your money is going to grow at a significantly higher rate than if you don't invest or you invest in something super volatile. Gosh, this is such a great question, though. Way to go, Amy. That's amazing. I love just the level of ownership you have over it and the fact that you're continuing to ask questions. I'll just anybody at 32 who has $2.2 million is just incredible. Those would be the people going, I'm a little discouraged by my 8% return. I'm like,

that's the kind of nerdery that will lead you to wealth and keep it. Way to go, Amy. All right. Up next, we have Brian calling from Boston. Hey, welcome to the show. Hi. Oh, is it Brynn? Brynn. Okay. We thought we lost a vowel there. We did. Good to have you. How can we help? So my husband and I are looking to see what we should do with saving up money, and we're trying to see if we should focus on paying our mortgage off or if we should put up a garage apartment on the property because that would create a rental income that would help us pay the mortgage faster. How much is this addition going to cost? So it would be roughly anywhere from $80,000, but probably closer to $100,000. What's left on the mortgage?

$265,000. Do you have the money right now to do the addition? No, we're saving towards that. We don't have that right now. Okay. About how far are you from that? We don't, we really just started doing everything about a month ago, starting January, 2023 is when we just sort of. Okay. Pass the vision. Yeah. We have right now in savings, we don't have a separate savings outside of our, we have a fully funded six-month emergency fund. Awesome.

And aside from that, then we also have savings of what the mortgage payments will be for this year in an account that we're going to use. Okay. So you have one year worth of mortgage payments sitting in another savings account? Yes. And what's that for? That is for the mortgage for this year because our income is really, it goes up and down. What do you guys do? Okay. Yeah, yeah, the bartender. Well, I'm from Boston. People drink year-round there. I've seen it. Yeah. It's not a very seasonal business. In the summer, it's when it's really busy where we live. Okay. Could he do something in the wintertime to supplement it? Yeah. So that's what we're looking to do this year. And then I have in November,

we'll probably make another $30,000. I have an Etsy shop. So usually I'll do about that in November. Okay. Well, Brynn, mathematically, I don't think it's wise to build this addition right now. I think if you look at it on paper and you take 80 to 100 grand and throw it at the mortgage, instead of putting it into an addition that you then need to ROI on, you need to get the return on this investment, which is going to take a long time in addition to helping you pay down the mortgage. So I'm taking what's in that account with those mortgage payments on top of this extra 30 on top of your income. And let's just focus on this house. And later on, once it's paid off, if we want to build that addition for some extra income, we do that and cashflow it. That's good. What do you think, Christina?

I'm with you. And there's just the factor of being a landlord and having somebody else live on your property. There's a lot that goes into it. And we've taken so many calls recently with people who are doing remodels that cost a lot more than they anticipated to begin with. So there's also just that factor of the unknown and the time it'll take. I say, lean into that momentum and keep going. We'll be you next time. welcome back to the ramsey show we're taking your calls at triple eight eight two five five two two five all right george i want to talk about something that is really hot in the news now, and it's going to keep going up in the next few weeks. Student loan forgiveness.

You've been keeping up with the latest, hottest, trending student loan forgiveness news. So spicy. Gosh. Well, I know a lot of you out there are feeling like it's pretty spicy because this really affects a lot of people. A lot of people have been having these questions for so long. This pause has been kicked down the road so many times for a while. Everybody was celebrating, you know, hitting pinatas, thinking their loans were going to be forgiven.

And then it's like the other direction. So I just talked to so many people who are confused and overwhelmed and just waiting to see how this case. This is a classic. Will they or won't they? What a tease. This is like Tom Brady's career. You know, are you going to retire or not, man? All right. So the updates to court cases will begin arguments with the Supreme Court or in the Supreme Court on February 28th. So next Tuesday, that's when things finally take center stage. And the courts should technically make a decision by the end of June. Now, OK, so this is kind of how it's supposed to play out. In each case, the suing party has to first establish standing, basically showing that somehow this program adversely affects them. So they have to prove that before the case moves forward. Now, these cases, one case is brought by several states and the other is by individuals. And I think the states are saying that it affects their

taxes negatively and the individuals are basically like, hey, we have loans too. So they're trying to strike the forgiveness down. And so they have to prove they have a case to do this. They have to prove they have a case over the next few months. So let's say they do that. It moves forward. Now, the Biden administration is trying to use the HEROES Act to justify moving forward with the forgiveness. Now, the HEROES Act, it basically says that the president has power to make changes during a crisis without congressional approval. That feels like a pretty squishy loophole. Right. And that's what a lot of experts are saying. That's kind of the argument. Authority to make changes versus like, here's a trillion dollars in student loan forgiveness

feels like a jump. Well, and that's part of the challenges is like they've declared that the pandemic is over. And yet they're saying that because of the pandemic, we're now going to use, we're going to do student loan forgiveness, which a lot of people are saying that feels political. It feels like a way to kind of push a political agenda forward when this doesn't really target people who had COVID, right? Like they're saying it's because of COVID, but it doesn't target people who have COVID. So anyways, it's just, it's interesting because we could have these arguments all day about like, is it right? Is it wrong? And what do we feel about forgiveness? Is it fair? All of those arguments, but that's not really the Supreme Court's job. Their job is to decide if this version of forgiveness is legal or not and whether or not this is an overreach of presidential power.

Juicy stuff. So they're not going like, does this pass the vibe check? They're going, does this pass like the constitutional vibe check? Right. Exactly. Well, and it's super important. I'm trying to really bring it down for Gen Z. OK, Christina. And really for me to understand it. That's the truth. Well, it's important because it also sets a precedence for future cases about what the president has power to do or not. I know a lot of people are rooting for it to go through. But it's also important to think about the long term impact about that, of that because it's like a future president could then decide something that you don't like. So

it's a little spicy, George. It'll be interesting to see how it plays out, especially with the future implications. OK, so what are the outcomes that could happen? There are three major possible outcomes. So one is that it shot down early. Basically, the parties can't establish standing and the cases are dismissed. And this would basically clear the way for the program to move forward. But it wouldn't prevent other cases from being filed. So technically, somebody else. Temporary win for the program to move forward but it wouldn't prevent other cases

from being filed so technically somebody else temporary win for the biden administration to go all right we got that one down now we gotta hope no one else comes after us exactly stop this thing somebody else could sue and then we could be back in this mess again of like waiting for the next trial date to see what happens okay another option is that the case moves forward and the program is deemed legal and this would clear the way for the Biden administration to move forward with full loan forgiveness. And then the third option is that the case moves forward and loan forgiveness is struck down. And then that would be back to the drawing board for Biden and forgiveness would likely not happen. Back to square one. Back to

square one. So basically, all this being said is that I think there's been a lot of hype about next week. The case is starting. You know, it's going before the Supreme Court on the 28th. But it could be a while before we really know what's going to happen. Like this is just the baby beginning phases. And I know that's hard to hear if you are sitting there waiting and have been waiting literally for years to figure out what's going to happen. Like that's kind of frustrating hearing that. But it is.

Hopefully we will have something by June 30th and basically if we don't have like an official set outcome by June 30th then student loan payments are supposed to begin 60 days after that so it's either the case is ruled and payments begin 60 days after the case is closed or 60 days after June 30th. But Biden could extend the pause again. Right. That's always a possibility. That's always kicking the can down the road. I mean, I have been shocked several times in this whole process.

Several times I'm like, surely not. There's no way it's going to be extended again. And I continue to be surprised. Don't you wish we could extend things in our life like the term papers do? I'm like, no, I'm going to need another extension teach. Right. Or like, hey, my taxes are due'm gonna i'm gonna kick that down another few months if you don't mind irs or a couple years it'll be nice you know so is this gonna

be televised like c-span level like can we watch this i mean for entertainment i don't know i don't know that many people want to watch every detail the court case but maybe we all watch the johnny depp amber heard trial okay and that took way longer than this. And that was a lot less money on the line. We're talking millions. This is billions and billions of dollars. Billions and billions of dollars. But I know we've been saying this all along with all this forgiveness stuff. There's so much anxiety around it.

There's so much frustration. And if you want to really get rid of some of that anxiety, start working on paying them off. Take control. Don't wait on Washington to figure out what they're doing, because we have seen it's been quite a hot mess the last few years. And that being said, I know I mentioned it last week. and wait to see if forgiveness is going to happen because it's right around the corner, then act like you're paying these loans off and start putting that money in a high yield savings account so that if for some reason it does or doesn't go through,

you are ready to pay off these loans regardless. But we've been preaching, keep your eyes focused on getting these loans completely done. That is a good word. Goodness gracious. Yeah, it's a lot, y'all. What a mess.

We are with you and hoping this passes soon. All right, let's go to the phones. Next up, we have Hamza calling from Washington, D.C. Hey, Hamza, welcome to the show. Hey, welcome. How can we help? Thank you. I just had a question.

I was hoping you guys could help me out. I just finished paying off my student loans. It was about 11K. So now all I have left is my car debt and my credit card debt. I have enough right now if I were to withdraw my savings and stocks to pay off my credit card debt. But I was wondering if that's the best choice or if I should just keep those in steady growth stocks. Right now I have them in VU. It's a Vanguard S&P 500 stock. And next one. Well, I love your heart for investing, but I want you to have a bigger heart for debt freedom right now. And we can get back to investing way more

once we free up those payments. Yeah, that's exactly what I was thinking. I was just... What's your credit card interest rate? Credit card interest rate, it is about, I believe it's between four different credit cards. I think it ranges from 15 up to 24. And you're thinking is I can invest and maybe make 8% instead of paying 24. The math isn't mathing on this. I'm using all the money. I'm cashing out in the stocks. Obviously, be aware of the tax implications of that. If you've had gains, make sure you have that set aside to pay that. Man, I'm paying all this off today. You're going to sleep differently tonight when you don't have payments in the world.

And that's what I've been contemplating all week. And then today I was writing out my financials and I was like, well, should I pay it off today? And then I figured why not call you guys to help me make that decision. I love it. Absolutely pay it off today. And, you know, I love that you have the investing muscle already there. That tells me you're going to build wealth so much faster once you don't have debt in your life. Cut up the cards. Don't look back. Don't worry about the credit score. There's all kinds of ways you can live life without the credit score. So if you're worried about that piece, don't be. We've got tons of resources on that.

My fine print episode all about the dirty truth behind the credit score and one on credit card rewards. There's just no reason to keep them around. You are going to breathe much easier tomorrow. We're excited for you. We'll be right back. This is The Ramsey Show. so welcome back to the ramsey show we're taking your calls at 888-825-5225 hey guys if you are wondering whether to buy or sell a home this year, here's what you need to know about the housing market.

There's still more demand for homes than there are homes to buy. And the median home price is expected to keep rising, just at a slower rate. It's just cooling off. And interest rates likely haven't stopped going up. So what does that mean for you? Well, if you're buying a home, you're still going to be facing some competition out there and big price tags. And if you want to sell your home, chances are you can still make a nice profit.

But you have to be patient for the right offer to come your way. So of course, that all depends on where you are. Every market's going to be different. And it's why you need to work with an experienced real estate agent when you're ready to start the home buying or selling process. You want someone who's done this hundreds of times before and knows exactly how to negotiate a strong deal based on the current market in your location. You can find agents like that who are Ramsey trusted through our endorsed local providers program. These are the top performing agents around the country who we trust to serve you well. If you want to get

connected with one today, just go to ramseysolutions.com slash agent. That's ramseysolutions.com slash agent. All right, let's go back to the phones. Up next, we have Michaela calling from Santa Rosa, California. Hey, Michaela, welcome to the show. Hi, Christina and George. Thanks for taking my call.

Hey, thanks for calling. How can we help? So my husband and I got married at the end of this last year, just a few months ago. Congratulations. Thank you. We're on Baby Step 3B slash 4. We both were investing debt-free with an emergency fund before we got married. Now we want to focus on saving up for a house.

Being in California, we want to at least have $100,000 for a down payment, which will take us at least two and a half to three years. Currently with our income, we make together about $125,000 a year, but are expecting for that to increase slightly in the next few years at least. And so we're just on the fence about whether we fully stop investing. And I know you guys say to do that if you're going to be buying a house in the next three years or saving for a down payment in the next three years, but just not sure if we should decrease it, stop it altogether. Missing out on interest in the next or compound interest in the next three years seems like a lot. We're both 31. So just wanted to keep that in mind. Awesome. Well, you guys are plenty young.

And here's the other side of that. If you pause investing, yes, you'll lose out on that compound interest. But if you keep investing and you sled on the home purchase, well, the home prices are a continual moving target in California. And so you might be now buying a house that is 50 grand more because you waited another year. So on either side, you feel like you're being crunched by time. Yeah, exactly. That's why we just wanted your advice. Yeah. So if either side, you feel like you're being crunched by time. Yeah, exactly. That's why we just wanted your advice. Yeah, so if I'm in your shoes, I mean, you could split the difference.

You might go, we're going to pause investing for a year or two, but then begin investing and keep saving for the down payment. Yeah, that's good. Have you kind of done, you said it's two and a half to three years at the current rate to get to your 100K.

Have you kind of mapped out what it would look like if you did with like what George said, where you kind of either do it, you know, one to two years of savings and then start investing or kind of played with different scenarios? Yeah, so we've already decreased our investing down to about 7% just to have more money to be stocking up on the side for a house. That's about $800 a month that we are investing. So that would be $800 a month. We can put more towards saving a house. So if you did that, then what would the time trajectory be? Like if you know that that would save another 25,000 in three years or just

under three years. So it would cut it down probably about a year. Well, that's it with three years of $800 if I'm doing the math correctly, but. Well, that's it with three years of $800, if I'm doing the math correctly. Man, it's... How much, do you have an employer match with your retirement plans? I don't, but my husband has a 3% match, so we'd keep that. Okay. So you'd invest up to the match on his end. Yeah, I mean, you could split the difference if you want to have a little bit of both have the cake and eat it, too.

You could invest, let's say, you know, five to 10 percent and still have a little bit more margin on the down payment side to get there faster. OK, there's not really a right or wrong answer here. It's kind of just running those numbers and saying, yeah, what's going to be the best scenario for you all? And there may even be like the option of so you make 125 total. Do you all is that just 40 hours a week full time for each of you? Yeah, I have the option for some overtime. He doesn't, but he's also more likely to get significant raises in the next few years where I'm not because I have a county job. Okay.

Well, I would focus on increasing the income. That would be my goal personally is to invest 15%, save up for the down payment and make up the difference by making more money. And that way you kind of have the best of both worlds where you're still investing, you've got the down payment, you still will hit your goal of two and a half to three years. So I would rather look at making more money first before pausing all investing. Yeah, that's such a good question though. I think a lot of people have that. And I know some of you are listening right now and you're like, baby step three B. There's a B? There's a B. I thought there was just seven. So if you're a new listener and you're kind of like, what are all these baby steps or what is three B? We've got

something set up on Ramsey Solutions called Get Started. So you just go to the website, ramsesolutions.com and click on the Get Started button and we'll help you figure out the best next step on your financial journey based on exactly where you are. That's ramsesolutions.com slash get started. All right, up next, we have Cameron calling from Charlotte, North Carolina. Hey, Cameron, welcome to the show. Hey, thanks so much. Hope you guys are doing well. We're doing well we're doing awesome awesome so baby step four active duty military uh what are the correct um were the best percentage allotments for the CS and iPhone and the TSP assuming that it was still the phone that you

guys looking in and then secondly um is it just set forget after that you guys recommended? And then secondly, is it just set and forget after that? I mean, that's why I set those percentages and maintained them throughout as I get promoted and get raises. Is it just set and forget? Can you talk directly on the phone? I missed the second half of the question. I think I caught it all, but we're getting a little Kermit on the line there. Well, first of all,

thank you for your service, Cameron. That's incredible. And you're talking about the TSP, which is the military's version of like a 401k. Cameron, do you have a Roth option with the TSP? Yes, that's the one I've chosen. Great. Okay. And you're spot on. So for those listening, you're going, what is he talking about? The CSI? So this is not a crime scene investigation. There are a bunch of different funds that you have within the TSP. There's G fund, F fund, C fund, S fund, and I fund. And Dave has recommended for years to stick to those last three, the C, S, and I. So that's common stock investment, small cap stock index

investment, and then international stock index investment. And so to get to the funds that mirror what Dave would recommend, four types of mutual funds, you want CS get to the funds that mirror what Dave would recommend, four types of mutual funds, you want CSI and the split that we now recommend and have for a while now is 80, 10, and 10. So 80 in the C fund, which is tied to the S&P 500. That's where you want the majority of your investing. 10% in the S fund, which includes stocks from these kind of small to mid-sized companies that have higher risk, but also higher return, a little more aggressive. And then finally that last 10% into the international fund, which has the overseas companies and is a good hedge against the US market taking a dip. And yes, Cameron, I would stick with that all the way through. I wouldn't slow it down. If you want to slow it down, you could do 60% in the C fund, 20 in the

S fund, 20 in the S fund, 20 in the I fund if you wanted a different split. But I think the 80-10-10 is going to get you a great retirement. Copy. Okay. Thank you guys so much. Yeah. My main question was, it just seems so simple. Am I just spreading this and forgetting it? So I guess that's the answer. I appreciate it. You guys are awesome. You're an instrument. Oh, thank you. You're an impact in my life and I'm so thankful for you all. Man, that means the world. Well, again, thank you for your sacrifice and your service. And it is that simple. A lot of people, they want to keep kind of moving their investments around.

And yes, as you get closer to retirement, a lot of the financial planning community says, hey, you should really shift these over to bonds. But the problem with that is if you retire for 30 years, Christina, and now you're shifted into bonds, you're going to see a much, much smaller return because of the less aggressive portfolio. So now I know I'm going to retire for potentially 10, 20, 30 years. I want to stay aggressive so that I continue to get those returns that got me here. That's so good. It's good to keep the full picture in mind. It's so easy to get laser focused on a small part of it, but I love that. And I just love the simplicity of it. I love that even his question was like, wow, it's that simple. Yeah. I think a lot of times with money, especially investing,

it feels overwhelming and overcomplicated. And I think especially now with everything in the market and everybody is a guru, there's just such an overwhelm. But a lot of times this money stuff, even if you've never invested before, a lot of it can be simple when you learn foundational principles. Absolutely. And that Roth option uses after-tax money that grows tax-free. And so if you have a million bucks in the Roth account, you have a million dollars and you don't have to give Uncle Sam any of it. It's amazing. You already did. There you go. That puts this hour of The Ramsey Show in the books. We'll be back soon. Until next time, this is The Ramsey Show. Hey, it's Christina Ellis.

If you like what you heard in this episode and want to know more about getting started on the Ramsey Baby Steps, go to RamseySolutions.com and click on 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.