The Ramsey Show - App - When Homeowners Struggle With Their Mortgage Payments (Hour 2)

Episode Date: May 17, 2024

Live from the headquarters of Ramsey Solutions, it's The Ramsey Show, where we help people build wealth, do work that they love, and create amazing relationships. I am Rachel Cruz hosting this hour with my good friend, Ramsey Personality and Best Selling Author, Jade Warshaw, and we are here to answer your calls. So give us a call at 888-825-5225. We will be answering your questions about life, money, career, relationships, anything and everything, we are here to talk about it. So up first, we have Jason in Irvine, California. Hey, Jason. Welcome to the show.

Hey, how are you guys doing? We're doing great. How can we help? Yeah, so I'm a graduate student, and I'm really wondering how I should be spending my extra money. So what I take home is usually about $33,000 a year. And I already have a six-month emergency fund. I have no debt. And I've matched out my Roth IRA for this year already. And I'm just wondering, the extra money that I have, where should that be going?

What should I do with it? Wow, good for you, Jason. Very good. How are you paying for school? So it's fully funded. It's a PhD program in STEM, so they pay me to do it. Good for you. That's amazing.

Yeah, so you're making money through the school and getting it paid for. That's incredible. Yeah, that's great. When do you graduate? Probably 2026, maybe 2027. Okay. So two to three years. How old are you? I'm 25. Okay. And how much extra money are we talking a month? So you've maxed out your Roth, which is amazing. Yeah. How much money per month do you have that you're wondering what to do with? So typically in a typical month, I'll save between a thousand and a 1500 out of my stipend. Okay. And then I put away a big chunk of that to go into my Roth for the next year.

So I guess what I'm looking at is like 6,000 at the end of the year that I don't, you know, I don't know if I should just throw it in a high-yield savings or if I should be investing it or what do you think? Yeah. If I were you, I would just put that in a high-yield savings account and I would just let it sit there because, I mean, we're talking, you know, $12,000 to maybe $20,000 on the high end after three years of cash. And I would assume, Jason, after school, you'll probably be looking for a job, possibly be moving. And that could be a great down payment for a house. Yeah. What's your living situation now? Yeah. So I have student housing, which is subsidized, which is great because Irvine's

very expensive. Ideally, I think the next big purchase that I want to make in life would be a house, ideally here in Irvine, which would be quite expensive. So you think just renting for a few years after I graduate, saving up as much as I can,

and then the extra that I have now, just putting it into a high-yield savings would be good. Yeah, that's what I would do. And for a first-time homebuyer, you'll, the extra that I have now, just putting it into a high yield savings would be good. Yeah, that's what I would do. And for a first time home buyer, you'll look at putting anywhere from 5 to 20 percent down. I mean, more if you have it, but you probably won't considering California real estate. But I was going to ask about that. Irvine is expensive.

Do you plan on staying there? Is there a reason because your family's there or? Yeah. So I have lots of family nearby. My girlfriend's family is nearby. I just I love it here. I'm happy here. Yeah, happy here okay that's great you go that's enough for me yeah so i think it'll be um yeah you'll have to yeah have some good savings to be able to do that and remember when you do purchase your first home you know it doesn't have to be a single family it could be a

condo it could be a townhome i think just getting into the market is great and honestly jason you're in a really great position i'm like you have you have, you're maxing out, you know, one avenue of retirement, which is great. But I would hate for you to like have all retirement funded and then no cash, and then you're not able to buy a house. So I would put that extra. And some high yield savings right now, I mean, they're getting four to 5%. So it's really great. I mean, like you can really take advantage of that, which is awesome. So that's exactly what i would do my six month is right now oh perfect just keep adding to that awesome so great jason well well done we applaud you but yep just put in a high yield savings you probably have to rent maybe a year or two or three after school even um but i

think a down payment on a house is your next big step so great great job. Next, we have Alexis in, is that Lawrenceburg, Tennessee? Hey, Alexis, welcome to the show. Hello, ladies. My name is Alexis, obviously. I'm a baby step number two with 18,000 still to go. I'm a single mom. I was calling because I'm not sure if I should pause the baby steps to save up to move back to Ohio where I'm from. My dad has end-stage cancer, and when he passes, I will resume part of the training over my grandmother, who is in a memory care unit. She has dementia. I'm sorry.

I'm not really sure if I should do that or not. Oh, gosh, Alexis. I'm so sorry. Thank you. Okay. if I should do that or not. Oh, gosh, Alexis. I'm so sorry. Thank you. Okay, so you're looking at, you'll be wanting, you want to move to Ohio because your dad is sick.

And have they given him, I mean, I know a diagnosis. Do you know, have the doctor said anything with just like lifespan and stuff? Do you know? Is it aggressive? Well, yeah.

Well, it's slow, but they gave him six years and that was eight years ago. So he's been on borrowed time for the past couple of years. Wow. Okay. Okay. So yeah, have you looked into moving costs, what it'll take to move?

Have you looked at places to rent possibly up there? Have you looked into any of that? Yeah, I have. I have the option of staying with my dad and just kind of doing half of the bills there or finding my own place, which would kind of be equivalent to what I'm paying now in Tennessee. Okay. So it's kind of the same.

And I have a remote job that allows me to work from anywhere. Oh, good. So I can take my job with me. Okay. And you said you're a single mom. How many kids do you have? Only my son. Okay.

How old is he? He's homeschooled. He's 14. He's 14 and homeschooled. Okay. Yeah. Well, I think, yeah, I think this, this is one that I would say, yeah, pause your debt snowball and save up some money for sure to be able to cash flow

this move. I think this is an important move. This is one of the times I would probably say pause to be able to be close to your dad during this time, especially since this is, yeah, what's looking like in your future, even taking care of your grandmother. So I think it would just be up to you, Alexis, to run the numbers on what's best from you from a financial standpoint of staying with him or getting your own place. And just think of the emotional toll too, right? You'll have your son and for him, you know, is that a gift being there with him and his, you know, and his grandfather, or is it, we probably need some space, you know, from some of it, cause he from some of it because he will have his own thing? As a mom, I think you can make that call from an emotional standpoint.

But also don't forget about that financial standpoint, too, because I want you to be wise with that. Will you have a support system when you're there in Ohio? Because you're taking on a lot. I mean, my little brother is there. um so i'll have him and i have my like church family okay great like my home church from when i was in ohio okay i'll have that right now as far as the rest of my family know they'll bring me here in tennessee okay yeah that's that's a lot you know to go and you've got the situation with your mom, the situation with your dad, plus a move, plus a teenager. There's just a lot in that equation.

I just want to make sure you've got people around you that you can lean on and cry on their shoulder and let them hold you up and take care of you because you're going to need a little bit of care yourself. For sure, for sure. Yeah. So, again, this is one of the times we talk about for momentarily pausing the baby steps, but a move like this would be one of those. So to pause and save up and make sure you cashflow all of that. Yeah. But Alexis, I'm so sorry. That's a hard, this is a hard season. I know, but you're, you're doing a great job and hopefully, hopefully we helped give you a little bit of peace and guidance. This is The Ramsey Show.

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CHM programs start as low as $98 a month. So learn more today and join at chministries.org slash budget at chministries.org slash budget. Welcome back to the Ramsey Show. I am Rachel Cruz, hosting with Jade at Warshaw and taking your questions. Up next, we have Kaylee in San Diego. Hey, Kaylee. Welcome to the show. Hi. Thanks for having me. Absolutely.

How can we help? I just have a question. We're in kind of a unique situation. We're a military family out in San Diego. We bought a house a couple years ago, and we don't totally love the area. It's kind of a situation where I don't feel safe when he deploys in the area. We're in a position where we think we can make probably about $40,000 off of the house if we sell it right now just because of the market in San Diego. And we only have about $35,000 off of the house if we sell it right now, just because of the market in San Diego. And we only have about $35,000 in debt. So right now we're considering selling the house and then

taking the money we make off of the house and just moving on base, paying off all of our debt and being debt free. But I've just been wondering if that sounds like a good idea. I don't know. I feel like it's out of order on the steps almost. Yeah, well, we wouldn't normally tell somebody to sell their house to pay off debt. We'd normally just say, yeah, work extra, cut your expenses, and just do it that way. But if you're not happy with the home that you're in for some reason, then I think that's a separate conversation, right? So I would look at the house as one conversation,

the debt as another. And then if the finances overlap, then that's a pro. But I would kind of keep them separate because even if you didn't have debt, would you still sell? Yeah, I'd say so probably. The situation we're in,

I mean, we're going gonna have to move anyways in the next two years yep yeah because he's military and they're gonna make us move in two years and we've got a great house on base that we're interested in um okay of course that puts us back into like the rental people of course which that part i don't love but yeah i think we would sell the house anyways yeah well i would say you know because of career choice and being in the military rental people is where i would put you guys anyways because what you're experiencing now yeah you move so often and until you're in a place long term or you know his his time is up there um i would be i would tell you to rent anyways so yeah this feels like the right move kaylee i think so uh only question would be I'm always looking at the

behavior part of it so what kind of debt was the $35,000? $35,000 so only some of it is a student loan about $8,000 that's all I have left on that and we were actively paying that off but now I'm actually going back to school so we did pause on that just so I can bankroll school. Okay, great. Right now. Okay, great. Yeah. And then the other is a car payment, of course. A car payment. Okay. That's the other one. So it sounds like you've kind of learned your lesson. You're like, if I go to school this time, I'm cash flowing it, paying off the car from now on we buy cars in cash. I just like to check because I do think that sometimes when there is a convenient option to pay off debt, I'm happy that you have that. But I also like to check because I do think that sometimes when there is a convenient option to pay off debt, I'm happy that you have that. But I also want to make sure that the behavior

is in check too, so that you don't go back in debt again. Yeah, absolutely. Definitely. Yes. And I mean, the student loan the first time too is like lost the scholarship situation too. So we're definitely like on the same page. We want to be debt free. This definitely seems like kind of an easy way out, I guess, but we're just not really happy where we are. Yeah. Listen, I'm glad it's there for you. That's great. It might be a good idea. Yeah, for sure. Yeah. Awesome. Well, great. I'm glad to know that we're on the right track then. Thanks guys. Absolutely. Thanks, Kaylee. Yeah. Again, I would, I would separate those, right? Because I think,

like you said, it's easy to do something like sell a home and just have a sweeping pass over the debt and you keep on moving. But but those conversations are important and um again being in the rent being in the housing market right now if you're in and especially you know if there's a good rate and all of that that's such to your advantage but he's in the military you guys and it's like you're moving constantly and always when it comes to if you're in a job that you're not going to be somewhere for at least five years renting is usually the smartest option because by the time you know up and down of the market you know depending on what's going on uh you're less likely to to lose money in some capacity and so renting is usually just it's the easiest and honestly the safest way when you're in somewhere for less than five years consistently like a military family.

Okay, so Jade, there was a really interesting article here on hill.com that says almost half of recent homebuyers stretch to make on-time mortgage payments. Yeah. So it's about 50% of homeowners right now. Yeah, there are some really cool stats that were in that article that I think really just point to the madness of the time. Like it's just, we went from a time where people were paying $50,000 over asking and $100,000 over asking. And then to a point where like interest rates

have gone through the roof and it's like, am I ever gonna be able to buy? There's just been so many shifts in the market and people just trying to do the best they can and so a couple of the stats that I thought were interesting uh 43 percent of recent home buyers say that they're struggling to make on-time mortgage payments and that might be because they overbought or you know kind of overextended themselves um this one says roughly 47 percent said that they feel in over their heads financially, which we talk a lot about that. We want people to feel like their mortgage is a blessing and not a burden. Still 44% say that they have taken on additional non-mortgage debt since purchasing their home.

So I feel like, Rachel, that points to my mortgage is probably more than 25 of my take-home pay yeah and in order to make life feel comfortable and feel like what we're used to we're we're using credit cards or we're using debt for things that maybe we would have used cash for um here's another one it says 82 this is the one that gets me 82 said that they had regrets about their purchase or that it didn't improve their happiness oh and that, Rachel, I feel like that's right in your zone. Oh my gosh. It is. And like the housing idea, again, financially speaking, it's wise to own a home. Yeah. Right. Eventually it is because eventually you're going to pay it off. It's an asset to you. You're not having to worry about rents rising or whatever. Having a house in your

financial portfolio is something that we want for you. But at the same time, people believe and really do, oh my gosh, if I could just have a house, if I was just a homeowner, life would be better. Life would be okay. And again, it's another just thing, you guys. Again, a very smart financial move if you're in the position for it but it doesn't contribute to your happiness and your contentment and if anything with this article showing is half of americans are stretched when it comes to this and so it has become this thing of like oh my gosh we felt like we had to get in and we got in and especially if you bought gosh in 2000 you know 21 22 and everything like this at least it's kind of corrected itself to a degree. It's still higher, but it's not like it's going,

you know, bids aren't crazy over asking price like they were back, you know, two years ago. And, but I think people fell into kind of the hysteria of it to a degree of like, oh my gosh, I gotta get a house. I gotta get a house. I gotta get a house. 100%.

And I feel like where we're sitting, we're playing both sides of the fence on, okay, we're on one hand telling people, listen, if you have to rent for a little bit longer, it's okay. There's no stigma in renting so that you can get into a place and have peace about it. And if you do have the money, we know that interest rates are super high. And I think you and I were talking, doing a real estate thing. they're i mean six seven even eight percent for you know a interest rate we've seen that before but because houses are just so expensive that's right attached to it that's really so it's like yeah we've seen these interest rates before but

not at this price point and so people are feeling that and there's people who have the money and they're afraid to pull the trigger because they're like do i get in with these when these interest rates are so high and so both sides of that can be true we want if you can't afford we want you to go do it if you're not ready we want you to rent for a while and and so that's how this is and so i think rachel let's give them some input on if you're feeling tight in the mortgage that you're in what are some things that they can do? And if you're ready to buy, how do you know that you're ready to buy? So let's kind of tee that up. So I would say if you're ready to buy,

of course, here we teach that we don't want the payment to be any more than 25% of your take-home pay. I think a lot of you know that. I know for me, I kind of came up with an acronym to be prepared for this because the first time Sam and I purchased a house, it's new and there's like costs

that you don't know about. And it's like, okay, we have our three to six months of expenses, we have our down payment, but then sometimes other things pop up and you're like, oh, I didn't know that. And so, you know, the down payment, we always say if you're a first time buyer, five to 20%, and if you can do more, do more.

Be prepared for earnest cost, earnest money, especially if you're selling a house to get into another house. Earnest money is money you put up up front. So if you haven't cleared on the other house, you need that money. Then things like closing costs, inspections, appraisals, all of these things are coming out of your pocket

and you want to be prepared for that. And so that's how you know. Yeah, and I think there's a reality to you guys. If you just have too much house, I mean, if it's 50% of your income, it's gonna be hard to do much of anything, whether, you know, investing or paying down debt. So again, looking at the whole picture,

I think is really important, but be in a position, if you are ready to buy that you feel good, you feel good about it. This is The Ramsey Show. This show is sponsored by BetterHelp. All right, so I was born and raised in Texas, and I love the myth of the lone cowboy.

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The worst. We were about to embark on a Ramsey Live Like No One Else cruise. And right around that time when we were supposed to get onto a cruise ship, 2020 happened and the pandemic started to creep up. And I remember thinking, who's going to tell Dave that we are not getting on this cruise ship? Like there is no way that we're, but man, up until the last minute, and finally everything canceled.

The ports were closed. Everything shut down. So the cruise was officially canceled. And we have heard about it since then from people pretty continuously. And especially those that visit Ramsey Solutions are like, oh, we are signed up for the cruise. Are you going to bring it back? Are you going to bring it back? Well, are like, oh, we are signed up for the cruise. Are you going to bring it back?

Are you going to bring it back? Well, the answer is yes, we are. The Live Like No One Else Cruise is back. So you can join myself, Jade Warshaw, Dave Ramsey, Dr. John Deloney, Ken Coleman, George Camel, and some other special guests like Stephen Curtis Chapman, Deanna Carter, some famous chefs. We have a boatload, you could say, of some fun, entertaining people that are going to

be on this cruise ship. So we're taking over the entire cruise ship, and it's stopping at Turks and Caicos, St. Thomas, San Juan, the Bahamas. It's going to be a fun week. Seven whole days. Seven whole days. We will be on this ship. It's a beautiful ship, actually.

Really, really beautiful. And here's the thing. VIP upgrades. They're already sold out. Most of the suites are almost sold out, but there are a few cabins remaining. So if you want to make sure to check it out, if you want one with an ocean view and all of that, you want to make sure to check it out if you want one like with an ocean

view and all of that you need to put your deposits down soon because it's actually out selling the one in 2020 it's selling faster wow than that one did so this one um what do you call it jade take sale yeah set sail yeah march 22nd through the 29th okay so here in about nine months and again these are for people that are on baby steps four, five, six, or seven. So if you're getting out of debt, pause, we may do another one. If you're building up that emergency, pause, don't come on the ship, continue down your financial plan. Or I should say, don't pause your plan, keep going. But for those of you that have lived like no one else, we are here to celebrate you. So go to RamseySolutions.com slash cruise to check it out and sign up and come hang out for a week with us as we celebrate you guys.

All right. Up next, we have Nicole in St. Louis. Hi, Nicole. Welcome to the show. Thank you. So I have a unique situation. I'm getting an insurance payout of approximately estimated around 60,000 next year from a victim's fund. What happened, Nicole? My son was killed in an accident last March. Oh, I'm so sorry. Oh, how old was he? He was 18 years, eight months and four days.

I'm so sorry. Oh, so sorry, Nicole. It's been very rough and I've not been able to return to work full time. So that kind of plays into my equation too, because obviously I've just been trying to survive, but I'm worried about like my 401k. I haven't, I just recently started making contributions to it again, but I'm only working part time. So I don't know like what the best use of that money is. I want to be smart and honor my son and my choices. For sure. Absolutely. Um, are you able working part-time? Are you still able to keep everything afloat with, you know, rent or mortgage or food bills, all of that? Have you gotten behind on anything? No, I'm not behind on anything. I actually have a very decent hourly rate. I work

in the human resources world. And so I'm specialized in one aspect of that. And so I make a decent amount, even though I'm only part-time. Okay. And do you have any other kids that you're supporting? I have an older daughter. I'm not supporting her. Okay. But I'd like to factor her into the equation also. Okay. Oh, man, Nicole, I'm so sorry.

Do you have any debt right now? I have about $12,000 in credit card debt. And I have a mortgage that's, I've got about $128,000. On it, okay. Do you have any money saved? I only have like a couple thousand dollars saved. I went through a lot of savings. Okay.

And what, can I ask, caused the $12,000 of credit card debt? What was that on? Some of it was grief, honestly. Some of it was's still left it's just poor spending looking for something to occupy my mind yeah sure sure which is which is understandable um oh i'm so sorry um are you are you in grief counseling are you working through that I am I have an amazing counselor um so I'm so appreciative of that but it's it's just a lifelong wound that I have to figure out how to yeah live with so Rachel and I could give you some thoughts I mean obviously we would say okay yeah let's clear out this debt. Let's, you know,

make sure you've got a good footing and, you know, you've got three to six months of expenses, but what do you think, you know, you said you want to do something that honors your son. What do you think that might be? I started a nonprofit in his name, and I've been contributing to that. So part of me was thinking of putting some resources into that, and the other part was just providing for my daughter. She's a college graduate. She works in the medical field. So she's, you know, she is making her own way, but I mean, that was her only sibling.

Yeah. Yeah. You know, I, for this, Nicole, I think it would, I think it would feel right to say this amount of money. We always say to do with three, you know, money can do three things. You can give it, you can save it, you can spend it. And I think that would be a beautiful, you know, way to kind of divvy up this, if that's what you want to do. I think it would be honoring to him, you know, for to pay off this credit card debt. I really do. I don't think that that doesn't feel off to me. That feels like a really wise way to set yourself up and continuing your healing. I can see you saving some on the side for your daughter. Maybe she may not need it, and I don't want you to do it out of a guilt or a pity necessarily, but maybe you kind of keep

some on the side that if something comes up in the future, you're able to bless her in that, whatever that looks like for her. And then give some of it to that nonprofit that you started. I think that divvying it up three ways feels right in this. And then I would have a plan to for the 60,000 for next year, just to know ahead of time what you're going to do kind of like a budget that we know, you know, before the month begins, if you will, of where your money's going to go. And I would I would do that same with the 60. And maybe it looks different. That's 60. Maybe, you know, a year from now, you could say, okay, this, this amount of money feels right to, you know, maybe, again, save some for your daughter if you want to do that. Maybe put some at the house if you want to do that. I mean, whatever feels right to you in that moment. But I think staying within those guidelines is a way to, I think, to honor your son. I agree. I agree. I do like that a lot. If I pay my credit cards off,

should I put that money towards my house payment as an additional principal payment? Yes, if you had, yeah, if there was more that you were divvying in that category, then yes, yeah, if there was more there, yeah, put it towards the principal. Yep. And maybe you just do all that now with the 40. And then maybe when you get the 60, that's when you say, I'll give some of this to charity to get yourself. I think there's something to Nicole about, you know, having that solid financial foundation under you that maybe can

give a level of clear headedness to when you get this next sum of money. So maybe using some of this for your benefit to set you up well is beautiful. But I know both of us sitting here as moms, we can't even imagine. Our heart goes out to you. Yep, I know. You're doing a fantastic job, Nicole. Thanks for calling.

Welcome back to The Ramsey Show. We're taking your calls at 888-825-5225. So give us a call. Up next, we have Chris in Roanoke. Hey, Chris, welcome to the show. Hey, y'all. How are you doing today? We're doing great. How can we help? So I have a question after reading a little bit from Breaking Free from Broke. In the investing section, it said that we should avoid index funds and instead go for mutual funds. But I know mutual funds have more fees and sometimes they don't beat the index.

There's a lot of them out there that don't. So I was wondering if there was a situation where you would choose an index fund over a mutual fund. Yeah, I didn't know George's words for that. I'm not sure. Well, I can't say yay or nay to that. There are times where we would say choose mutual funds, like when you're investing for your retirement. We just know that over time, because they're actively managed, they're switching out those funds in an attempt to beat the index right and so of course we want you to have the best rate of return and you're right there are a lot out there that don't hold up their end of the bargain but there are a lot that do and i know i'm invested in some and rachel you are too for sure

so that's why we would say that now to your point index funds are not bad they're passively managed and the whole point is they follow whatever index it is so if it's s&p 500 or if it's um in dow industrial whatever it is there's different ones that they follow and so that is a little bit of um um if you're let's say you were saving for a down payment for a house and you're like listen i'm not going to buy for another seven or eight years. I'm just going to park this money here. You could do that and you could kind of know here's the return that I'm going to get. It's kind of like just a place that I'm parking this money in a brokerage account. There's nothing wrong with that, but that wouldn't be my long-term, necessarily my long-term investment strategy to just park in index funds. Because if you invest the way that we say over those four

different areas, growth, aggressive growth, international, all those, then you're going to get that four times mix of a better rate of return. And so that's kind of the thinking there. Yeah. And again, I think more so for the long-term approach, especially when you're thinking about retirements, mutual funds, it is a great place to park your money when you're thinking about retirements. Mutual funds are, it's a great, it is a great place to park your money when you're doing all of that because it is spreading it out so much. But again, like Jade said, and you know, for a short term,

we know people, you know, a Vanguard account and they put some money in, but I think you want to be careful with what you're doing because a lot with index funds, you're doing it yourself. And I think there is something to be said. If you don't know it well enough

and you're not diversified well enough, you know, that's where some red flags can be raised. But yeah, I wouldn't say it's that we're completely against it by any means. Yeah. Honestly, if you're investing and you're not investing in single stocks, in many ways, I'm just happy that you're doing the muscle of investing. But to Rachel's point, I think we're in the era of TikTok and Instagram, do it yourself. And there's some validity to that. But if you really want the best rate of return, you're working with a professional and you're choosing really great mutual funds. Okay. I guess my question was more because I don't have a lot of margin. And I guess I'm technically in step seven, but I don't own property. So that's kind of what I'm working for in the longterm. So is there a situation?

So would that be one of those situations where you might go index funds? I mean, how close are you for a down payment on a house? How many years do you think? Oh, at my current pay rate, which i'm hoping to improve it might be 10 to 15 years until you have a down payment yeah yeah i don't have a lot of margin each month so what do you make a year i make about uh 37k okay how old are you i'm 25 okay and what's the market like in roanoke because for first--time homebuyers, we're saying, you know, 5% to 20% down. I haven't really looked around that much because I've been, I've got Ken Coleman's book at home. I'm trying to get my income up right now.

Okay. And I just got out of Baby Step 3, so. Yeah, that's great. I figured thinking 10 to 15 years down the road might work out best for me. Okay. I would probably say to 15 years down the road might work out best for me. Okay. I would probably say to be a little bit more aggressive. I think when you get your income up and depending on, yeah, which part of the country you're looking at, you know, a 5% down is great. And I would get into the market as soon as possible with that, with the parameters that it's no more than 25% of your take-home pay and all that.

But, yeah, I would want to get in more aggressively, Chris, especially if you're going to be somewhere long term, because the faster you can get in, again, reasonably and responsibly, the better off that you're going to be. And in that case, you know, you could, yeah, you could look into an index fund, you know, Vanguard or something like that, or even just high yield savings. But again, that would be, I mean, if you're saying 10 to 15 years and you're being for real about that, which again, I'm going to challenge you on it, then yeah, I mean, a mutual fund or index fund, I mean, any of those would be fine. But if you do it sooner, which I would hope that you did. Well, that's assuming that your income doesn't change and it is going to change. You're 25, your income is going to go up. You've got the right resources. You're already digging into King Coleman's material. So I can tell you your income is going to go up. And I don't know if you have debt or not, but you knock that debt out, that clears up more margin. And so there are definitely things to make that go faster

for you. Picking up a side hustle. There's a lot that you can do there. So the 10 to 15 window, I'm with Rachel. I challenge that, but that's just our opinion. Yeah, that's great. Thanks, Chris. Up next, we have Court in Lubbock, Texas. Hey, Court. Welcome to the show. Hey, how are y'all? Doing great.

How can we help? So I have a question, and I'm sure you'll get some people ask this, but what are y'all's thoughts on vacation help? That's kind of what we're thinking about next. Yeah, I think it's a great goal. Okay, we've owned a couple of, you know, rentals, and they, I mean, we kind of made money when we sold. We don't technically make money, you know, because the insurance now is going crazy. Every time we go to Florida, they're like, you know, I talk to owners that live there, and they're talking about how they're making double their mortgage or triple. I know that's subjective, but it just seems like a lot more than what you would expect from the tenant landlord type situation. Yeah. Vacation rentals are the most volatile. So when the things, when times are good

is real good. And when times are bad, they're real bad. So, so no, I mean, I think it's the same rule with any investment property, regardless of its vacation or just down the road. It would be paying cash for it. So that volatility isn't there. Golly. Yep. Because here's the thing, Court. I'm like, you know, yes.

Again, when times are good and, you know, are people doing this? Yes, they are. But you look back and I'm like, I don't know if I'm just cursed from 2007, 2008 and everything. I'm like, they were giving houses away and people were getting foreclosed on left and right. Do what? Yeah. I said I was still in middle school. I don't really remember the terror from that.

Yes. I'll remember for you. Because those are the first places that people stop when the economy turns. And again, we pray that never happens. But again, it's a it's a risky business and again when it does well yes i i agree there's places in florida for sure they're you're renting out like yeah probably double the mortgage um but you're being a long distance landlord you're gonna pay management and um and again i think it sounds um it sounds romantic to

say oh my gosh we have a beach house in flor. And then when you go in and there's been eight other families that have slept in your bed, you know, it just, it changes the mindset a little bit too. So there's a... No, I'm just trying to think of another, I mean, another income where I don't need extra income, but I need to figure out where to put this. Yeah, I would get, I mean, do you have, how much money do you have? I mean, I probably like between how much money do you have? I mean, I probably, like, between everything, like, $300,000, $400,000. Like, liquid?

Liquid or in investments? Yeah, yeah. Liquid. Yeah, all liquid, yeah. Yeah, so maybe, yeah, so I would look for a spot. I mean, if you want the vacation side of it, yeah, look for somewhere. Look remote. Don't go to the hot spots because you're going to pay four times that.

Yeah, they're like $1 to $3 million just for the just for the starters yeah so or what you could do court if you want to get into real estate in lubbock go buy you know we've owned a few houses there we just didn't really make money until we sold so right now we're living in a super nice uh lease that we're in a five-year lease right now because i'm so scared to buy a house um you're leasing a house we are but you're I'm so scared to buy a house. You're leasing a house? I don't know why I just am. We are. But you feel okay going and buying a house in Florida? I do, just because we've talked about it for four years. We go four times.

Like, I'm leaving tomorrow to go, and I'm talking to another person. But you're living in your house 350 days a year. I know. I know. You are right. So that's the deal where it's like I just, I run a business. We have six locations. So I kind of travel everywhere.

Okay. Okay. I hear you. Well, what I would say, Court, is I think for you and your family, owning your main property is going to be key long-term to have equity and that you don't have to worry about a house payment later down the road because you're going to have everything paid off. You'll be self-insured. It'll be great.

And then from there, let's look at investment properties, paying cash for them local so that you can keep an eye on them, I think is where I would start. But I appreciate the enthusiasm and all of it because one day you could own a house in Florida and pay for it. So that could be a great goal. That's right. Thanks for calling in. Thank you, America. This is The Ramsey Show. So