300k In Debt - What Should I Do?!
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IT right now was the moment I called and they said, bow has an audio and i'm like, that is crazy, but I think it's actually brilliant. So let's do IT. So I got tell you, this is an opportunity I wanted tell you also.

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So what happens when your big life priorities are competing?

And I am so excited to talk about this. This happens to all of us. We want to get different things done. We have different priorities in our life, and we try to figure out how do we prioritize them.

I that we can speak into that kind of stuff, and I love that we can speak into questions that you have is why every single toosday at ten a and we d like to do a live stream. We answer your question. So with that, i'm going to go over you, the creative director.

E, yeah, i've got a question about this very thing from dev to kick us off. He says my Fiona is graduating from medical in two years, and we will have three hundred k in loans before he starts residency at fifty eight year. To start, I make two hundred k year.

How do we handle this debt in this? Whats going on? Wow, saving for a home flash wedding at a lot of things. Meet, school, home wedding. What do you have to say to dev and his vision?

Say, well, let me first let me give you the good news. The good part IT sounds like you guys have a big shovel. If your income is two hundred thousand and your fiancee's income is gonna fifty thousand, that's a core of a million dollars a year you're gonna have coming in.

So it's OK to have a lot of competing financial priorities when you got a really big shovel to figure out how to tackle those. Now the one downside that, that said, oh, but in addition, as big show, we have we have three hundred thousand dollars of loans and we have other priorities. I'm sure we want to get rid of this dead and we want to pay IT off. We want to begin building for financial independence and retirement, but also we want to get married. And i'm guessing by the fact that you have to save for the west, that you have to shoulder some of the responsibility for that as we start our lives together, we want to buy a home.

And so the very first thing that I think that you and your phones, I need to do as if you've not yet had the financial conversation around, hey, water, our priorities, you should do that and you guys should sit down and talk about, hey, are we working towards being financial independent one day that we want to live a live where we get to do what we want to do on our terms, the way that we want to do IT? Or do we want to have like A A knock down, drag out, amazing blowout wedding, and you have to figure out how you prioritize those types of things. And based on how you prioritize your goals, will determine how you should begin funding said goals.

What kept ed popping in my mind was begin with the end of man. And I think that on paper, first of all, is all chaos. Because you've got three hundred thousand hours a student loan at sitting out there.

You got marriage, you know, coming up. You're asking about housing that is messy middle for a whole different reason. Typically it's kids and and other things.

But I still begin with the in demand because what's going to happen is right now, you feel the pressure, you feel the weight of that student loan that and it's in that differing building stage right now, but you still feel the weight of IT what i'm worried about, and this is why I want to change your mindset. There's going to come a time when your Fiona graduates from her residency. It's actually her first real big job, probably making three hundred thousand .

plus believe that.

I mean because that remember the whole thing, hopefully doing this for first sorry. And with medical, I know sometimes some weird to IT, but it's going to be a big shovel. You make two hundred thousand, which great income.

So you guys outside go from a situation, if you sentiment it's like, cna la, you know, you you run around an erratic I dress. And then over now, you ve got this big income coming in. You've just got to make sure when the clock strikes midnight, that IT all doesn't go back to you being and rags again in the way I would encourage you.

Instead of gone from these rags to Richard, let's so actually don't make the mistake. The most medical students do is I wouldn't go head encourage viewing your feelings. I go and have those difficult conversations right now and say, hey, what can we be doing right now to make sure we don't get out of hand on the wedding?

Second thing, what can we do right now to make sure that maybe the house we're trying to get into isn't the house that we're going to live in, in seven and ten years, but it's the house that we're going to start this relationship and maybe even start this family with. So I can check those boxes, but not be what I think everybody thinks a doctor and a successful professional should have. Because if you get that, your man, you're gonna ready to be in the head start because you ve got a lot of pressure.

And right now you you'll be in the faking IT until you make IT face just because you have on a potential. But you haven't actually met the opportunity to get out of debt, and everything else is coming your way. So those are the two big things that I see right now. And then after he gets her first real job, move on, boy, taking to account that he might get her first real job at a state, going that conversation .

to impact your job .

because you have a big shovel as well. So these are the bigger begin with the end in mind, bigger elements that need to be a, and then just navigate as you get more and more of the the pitch becomes clear. Think about how do we get ourself out of this.

And I would use the financial order of Operations to kind of be your navigator so that then you come out on the other side if you actually have your your dream job. SHE has her dream job. You'll know all the premiers of the debt, and you should look at the the financial order of Operations. Fear, how do we build this wealth in a great way and then have this life that is the fairy tale, just like into the other thing that .

I would encourage you to do, since you guys are thinking about home ownership as if you go to money guy that come slack resources, are, we have an entire home buying hub out there where you can walk through a home buying checklist. And can you affirmatives answer, hey, if we buy this home, we feel pretty confident we're going to be there for at least five to seven years because that's a great point. If he gets the jobs somewhere else, if you have to move home, ownership might not need to be one of the top priorities that you guys have right now. So make sure that the website use all of the home buying resources out there so that you can make a wise financial decision and live your happily over after.

No, that was great. You showed a lot of the nuances that is in this situation like this because personal finance is personal. So dev, thank you for asking that question.

Hopefully, that gives you some things to think about as you think through your financial situation moving forward. All right, next up we ve got a question from gamma's nineteen ninety nine. IT says, on the last video, you talked about parents helping kids.

Do you have any advice when it's the other way around? Currently, we are helping our parents on our internal country. However, this prevents us to get from getting all the way to the twenty five percent savings rate.

Since in our retirement, we will not be helping our parents. Do you think this is OK? Currently we are saving sixteen percent, were thirty and twenty five years old and were thinking, so double income, no kids.

So what would you have to say to this type of a situation? Because we honestly ly get this a lot. There are different family dynamics, different structures, where sometimes IT is the other way around.

So this, you said the thirty and twenty five. Yeah, right. This is, this is a hard one. I should say. This is a new st.

One, here's what were not gonna say to you, hey, you know what your parents, they are kind of on their own and just kick him to the curve, right? Because that's not that's not the way that we want approach, how we interact and how we handle this life. And you have to remember that money is nothing more then a tool that allows you to achieve the goals that you have.

And for you as the child, one of the goals you may have as I, I want to make sure my parents are OK. I want to make sure my parents are provided for. You know, we talk about how it's okay if you don't prioritize saving for your kids because when they get to college, they're going to be able to get student loans and they're gona be able to work and there going be able to do all of things when he comes to your parents is a little bit different because likely there's not government, uh, there's not retirement loans from the government.

They're going to be available to them. So you're force for a really difficult predicament terms of, okay, what are our financial priorities and water our goals. And if one of the goals is here, I want to be able to provide assistance to my parents.

There's nothing inherently wrong with that, but you need to have a very real understanding of the opportunity cost that exists there, if that is something that is going to be a goal that going to you may be giving something up in may be early retirement ter, or maybe a more fruitful retirement or maybe more flexibility or whatever those things be. And that's not necessarily a bad thing. You just need to go into IT with eyes wide open.

You need to figure out, okay, what are the things that we are? What's the way that we want our life to look later on? Can we still help our parents and be a resource for and show assistance to them, while not completely sacrificing our total financial future, but also recognizing hair? We only save sixteen percent from now until the time we get to retirement. That's going to be a very different looking retirement if we were to have twenty five percent.

And A T T, because I first went to take a little pressure off, and then I i'll come back IT with a tough love of part, but we pull up, and this might be something pull up right on the screen, but always called, what can twenty five percent do for you lot? If you pull that illustration up, you'll quickly see that one of the few places that are bright spots is IT within your below twenty five percent for people in their twenty years and even at the right at the early thirty part.

A little bit goes a long way. So I want to take a little pressure off of you in that aspect. And in the second homework I would give you, after you go to money, got out, come slice resources and look at that, that that resource is, you might want to go head and do the full know your number course to figure out how much you're actually hurting yourself.

Or is this just a reality of your life? But I think by actually modeling out your cash, follow your savings rate, anticipate rate of return, inflation and all the other things you're going to build to quickly see, is this changing your trajectory in a big way? Or is this just the course correction where you're off one or two degrees and you just need to make some lifestyle decisions right now, but you do the work? And then the good news is because you're also addressing this at such a Young age, I got now I have a case.

I'm helping figure this outward. It's a very similar situation. You have an adult parent that they know that in the next eight to nine years, they're going to have to really start providing a lot of the income. But i'm like that eight or nine years is actually a huge blessing because IT let you really do some planning to see if you can mitigate the actual impact of this.

The first thing is, are you in this alone? Meaning, are there any siblings? Because if you have eight and nine years or you have some period time, you could pull together the committee of all the loved ones that are involved in this. And because it's a group and you have time, maybe the solution is very small.

Can each one of you guys can we start putting fifty dollars a month into this account that we're going to be growing for the parents benefit? And you've shocked, just like we talk about the power of and growth, those small decisions, especially when you can get multiple people involved with IT, can have huge impact. Acs, so that's what I would.

I try to figure out their things that committin ate by knowing how much time you have, how many other loved ones are involved in this decision making. You just take the reins of leadership, but you got to do the homework. Don't skip out on fearing out how far, how far ahead but you are through the twenty five percent. Don't skip out on know your number course and then don't skip out on go ahead and attacking this right now. So every ounce of time that you have on your side can be going towards finding the solution fantastic.

Jm, max ninety nine, thank you for the question. If you want that resources that bryan talked about, you can go to money guy docomo, slash resources. Click on how much should you save.

It's going to show you exactly how much of your income you can replace in retirement based on your current savings rate, and you can see what twenty five percent can do for you. All right. Ryans question is up next .

ready for IT.

IT says, is IT Better to rent out your first home when you're ready to buy and move into a new home? Or should you sell IT and invest the equity in an index fund? I have two hundred k in equity with two point six percent interest on my first home. Thank you. What would you say to ryan?

IT depends. Next question wo just get going. Of course, IT depends, right. Sometimes, sometimes if you find yourself where maybe you got a steal of a deal, you got in an amazing first home, in a community that had not, maybe for you, develop, and you gotten that home, and now all the sun communities blow up.

And IT is a highly desired community where there are people who are desperate to write that community, and the whole values are continue into increases. In a lot of this in the metro national area where people bought homes that were not crazy expensive later ten years ago, those homes have balloon in value and there's still going up in value and there's an amazing robust little market. If that's the case, you may very well decimate i've got this mortgage ated like two and a half percent, and I know that I can fill rent renters in there.

And the rental income that I have coming in more than covers my creates free cash. Look for me, the net mathematically might suggest he is a great idea to keep the first home and keep IT as a rental and then move on to your next home, so long as you don't run a file of any money. Guy rules a meaning that on your second home you ve got to put at least twenty percent down.

Uh, you you want to make sure that you don't have all of your housing payments succeed. Twenty five percent of girls income. And for the new home, do you see yourself being there for at least five to seven years? Now the opposite could be true to you may have bought a home and IT went up in value, but maybe it's in a more suburban area, is not a robust market, you don't know the tents are a lot like, or maybe you don't even want to be a landlord. If that were the case, then perhaps selling the house makes us, in my mind, I think IT really does depend.

Well, I look at this is when I visualize, I think, if somebody who's in a beautiful picture with a fork in the road moment, meaning that blue is Sunny days, meaning this is a beautiful moment, have yourself in as words, really two great opportunities.

Because if you have two hundred thousand dollars of equity in this house, and you have this low interest state of two points, six percent, here is a part that I can here you ask about, which I said, you have two beautiful opportunities here on your primary resistance, as long you lived in at two of the last five years as a single individual, two hundred and fifty thousand dollars of tax free game mean the government just go let you take the proceeds, throwing your back pocket. You put them into the new house. You put them into your investments is your choice.

Choose your own adventure. That's incredible. By the way, you're married because I don't I can remember for unshared of your single or married is five hundred thousand dollars, half a million dollars, pretty incredible opportunity. Second thing is with good opportunities, the other four of the road is turn IT into a rental property. And look and I get IT, if you are interest rates two point six percent, that's like, wow, you hate to walk away.

You know that there is actual value just in that loan itself plus the fact that you have all this equity that in this house because of how much houses have appreciated, that can be a pretty good opportunity too. As long as and both have on all these things, you're not skipping the step of making sure on the second home you're putting down twenty percent. You don't get out of that just because you have this great opportunity with this this primary that you consider turn into a rino.

And then I would ask you to really do the gut check. Um I think I have a client who did outstanding and real estate in the fact that he bought a whole fleet of rune properties right after the great recession. There couldn't been a Better time to do rino property because that face the interest rates or super low, banks had more homes and they knew what to do with.

So they were literally selling homes for cheaper than the material that went to build these homes. This was a once in a lifetime. But even this client who struck gold with his rino real estate portfolio, he's gidding in his light fifties, and he told he's like, look, I love these houses.

They have created a lot of wealth from my family. However, I just don't want a headache anymore. You know, there is even good rental. Real estate is not going to be completely passive to do IT right to keep your tenants well um and make sure nobody's tearing and stuff up.

So I would do I get checking yourself, do you have the aptitude meaning you're actually would be able to keep up with the accounting of doing that, doing the rino property right? Where is supported on your tax return or you're doing all the repairs, right? You have somebody who's going to take away the stress of somebody calling you at three in the morning because they have a big league in the house and just make sure you have have that desire. I'm not going to get a mad you either way because I can said you were at the beautiful crossroads of two incredible opportunities, but just make sure you measure twice, cut once, and do what works in your life appropriately. What I don't want you to use is turning this beautiful situation, disregard the financial world of Operation, disregard the guard rails, algo KPI the financial ditch, and turn this beautiful thing into an actual nightmare that don't fall into that trap.

This is a prime example of where personal finance becomes incredible, personal, unique to your specific situation.

Love IT ryan. Good question. Thanks for being here. We always appreciate here once going on in your financial life.

brand new ze, we're recording. This is the time of year. And look, I know um you are a little bit more experimental at this stage in age of life and this is the time of year we going to talk about all the things that were thankful for and you are saying some stuff precise just, you know what that's prety good.

thanks. Pretty good. This thing that we're doing and is pretty good. And I just wanted to acknowledge, uh, what a heart of gratitude that you have and IT involuted ces all of us around here. And i'm thankful that you do that for us.

No, I I am very thankful for what we get to do. I mean, I I had a studio tour come back last week, joe and um SHE you sad he missed you really I think SHE was sad. I went hand cut her off at the past bow and told .

her that available a man I wish we here and .

I was meeting and there .

was no way .

I tell you, just because you guys have no idea how much the rocket feel for I meet you guys and you come in and you share how your life has been changed, or some piece of content that kind of helped you out. Even Megan, our count, one of our our main writers, who are shared something that her parents heard on our show. I mean, SHE pride doesn't realize that that little sidebar k comment really motivated me in ways.

And that's so I have a hard gratitude in in the fact that you guys have made this possible. We're already way beyond where ever thought this things not go. I think both still things were probably the sixty percent mark, but I am vivion wherever thought.

And I would be remiss if I can say thank you. Thank you. Thank you for for making all this possible. That means a lot to us. That's why we try to load you up if you get the money out, out come slashed resources there, literally as an entire library of free information to try to get you to be the Better version of yourself that much faster.

I'm thankful for every subscriber we have out there. And if you're not one of the subscribe right now to the channel, so that I can also be thankful for you hanging out and doing this with us every single week.

And the last thing i'd be crazy, twenty twenty four was the year of million emission I love. And what's funny, i'm still a car reading.

I is my little guilty pleasure.

Guys there are still super nice. I keep thinking at some point where could be done with all my financial mutants and will actually see what the public really things. But every there's still a lot of you guys that are still buy the book. The other thing is as every week and rb knows, every thursday, I get the sales numbers and I haven't said anything, but IT is crazy like clock work, hundreds of copies of this cell every week. And then, like last week.

double .

the number. Books, just so what I love that so many people have enjoyed the books. So twenty, twenty four forever will be the year of million. Nine mission.

I love IT to that good stuff. Well, speaking of loading people up with free advice, you want to do some more questions .

really unthankful for you? I don't, i'm thankful. Throw these questions and you keep us on track. And you heard the cats. So .

now unna T.

Get there on the base and start ripping some some I mean, what we can do here to make sure, but I can introduce themselves and how thankful for .

we are where to .

make that you .

are certain groups like the media you don't want to upset on, because they can just kill you with the unlimited publicity and other things as over a social media is happy. He, no, I tell when he's go put up.

right?

Oh my god is the money guy .

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