I'm 33 Years Old With Nearly $1,000,000 In Debt!

I'm 33 Years Old With Nearly $1,000,000 In Debt!
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[@travissteadman5435]

I listen to a variety of personal finance shows, and I gotta say, I greatly appreciate the calmness that the Money Guy Team brings to the personal finance space. A lot of the other people I listen to, love them to death, but they're yelling and screaming at people. It's usually done out of love and a desire to light a fire under you, but still. There's something special about the positive delivery that the Money Guy Team brings that speaks to me. Thank you guys.

[@michellmusso2009]

Lol *cough* Caleb and Dave Ramsey *cough* Totally agree though

[@ayannafit2441]

I like they learned from Caleb and remind people to subscribe just randomly like that 😂

[@BossMan_Jerm]

It’s funny to see what rubbed off on Caleb, and what rubbed off on money guys, now Caleb has a laminated print out he uses in his videos too 😂

[@txbiker15]

I would like to see a video weighing the pros/cons of using a target date fund vs S&P or Total market fund. Which is better to begin with vs the returns of each and how they all work. :)

[@carlr458]

They did one at some point. It seems that if you're able to hold it in place and keep funding in downturns, 500 makes sense, but for people who are timid about seeing big losses or are nearing retirement, target funds are better. I expect to put my funds in a target fund when I'm 20 yrs out from retirement (40-45 for most people) to allow it to maintain funds and have less volatility.

[@MoneyGuyFan]

I just preordered you book, Brian. Excited to read it IN MAY!

[@MrEscape314]

How are you going to read it next month? I thought it comes out in May.

[@MoneyGuyFan]

@@MrEscape314 I thought it was going to come out in November- my bad!

[@MrEscape314]

@@MoneyGuyFan we wish

[@putyourshirtbackon1658]

Money Guys, I really enjoyed y’all answering the first question. One aspect that I was hoping you could comment more on is when saving the 25% for retirement, does the math change at all when saving pretax dollars in a 401k vs post-tax dollars in an investment account. It seemed like you were just adding all the dollar amounts together to calculate the 25%, but due to tax implications seems like adding apples and oranges.

[@abramtreadwell722]

25% should be based off of your gross income. You should also get the Roth dollars before the pre tax dollars except for the employer match. They’ve mentioned this in previous shows.

[@Rew123]

I'm shocked they borrowed that much money and I'm shocked that the bank lent them that much money..

[@bobbasar6424]

Trying to let my 1 million dollar inheritance. No other funds and I don’t want to work anymore with some disability.

[@Lillith.]

I feel like I'm doing something wrong because I'm not stressing about money. I have goals, sure, but I know the timeline and I know what comes in and what goes out. I work for the government, so job security and benefits are great. I feel like I should have less freedom to do with my money than I do. I can pretty much spend how I want and I'm currently saving (just personal input) 33% of my gross (52% with employer). Where is it that other people who earn as much or more go wrong? I spent almost €1000 on a birthday present for my mom because she deserves it. I'm taking my family out of the country for Christmas because why not? It's stupid money that I could put elsewhere, but I want to enjoy my life and share it with people I love. How is it that I can do that, but when I tell other people my age they're acting like I can conjure up money out of the abyss? I know my parents went through the same things when they were young, so I guess their ways rubbed off on me a bit. But I'm convinced everyone can have stupid money to spend, most just don't have it and I can't figure out how.

[@La_sagne]

at 7.5 percent i would start paying off the mortgage a few steps earlier

[@s0sa1ty]

1 million in debt kinda crazy lol... I get antsy if im running a slightly higher CC balence in a statement pieod 😂😂

[@Giffycuh]

wait is it 25% gross for savings and investments? or just investments? I am doing 25% investments.. is that too much? I am 25

[@NoRegertsHere]

25% pre tax income to investing as an eventual goal to work towards. If not saving any money after that for a house deposit or something, increase income with side hustle or promotion or prioritise saving a little first

[@Al-xb9fo]

It’s disgusting what has become of the American education system but even more disgusting is people not reading the fine print and not understanding what interest is…… the government should absolutely stop the interest on the loans but every brain dead student that is in crazy debt due to an education should pay what they borrowed!!! This comes from someone who graduated college in 5 years because I had to work while going to school and completely understood what interest would do to me. I know people who are 100K+ in debt because they have an art degree from a fancy school.😂

[@carlr458]

I worked while going to school and still have $100k in loans I'm paying off. It depends when you went to school and what the average loan, interest rate, and average pay rate is during your time in school. Younger people, both of today and yesterday, generally won't get a good deal if they don't have extra benefits like scholarships or parental funds.

[@christinab9133]

❤❤❤

[@jamesmontague9277]

Depends what’s behind the debt tbh. I have 1.75mm in debt but it’s leveraging cashflowing real estate worth 3.5mm. Depends what the debts funding

[@MrEscape314]

My brother joked that we were racing to $1M. He wanted to get to $1M in profitable debt (rentals) faster than I could get to $1M in stocks/bonds. Neither of us has made it there yet.

[@jjred233]

If you are okay with high risk, then good for you.

[@jamesmontague9277]

@@jjred233mild risk at worst. Housing market and rental market aren’t going to plummet 50% simultaneously. And even if they do they’re still likely beating the s&p over the next 20 years

[@firefalcoln]

$1,000,000 of debt isn't as bad when you realize that $800,000 of it is for a home. I'd never tell anyone that I'm $385,000 in debt (even thought I technically am) because my house is worth more than $200,000 more than what I owe for it I still have a positive net worth of over $330,000. Having a significant amount of debt for a home is completed different than other debt (and it shouldn't be surprising if you live somewhere expensive).

[@DidacticToast]

I've just managed to pay off my $37k student loans this past July, and it feels like a huge achievement. The thought of grappling with a million dollars in debt is staggering, although my earnings are nowhere near hers.

[@jimh8080]

With an $800,000 mortgage there is know way she is keeping expenses to $2,000 a month. A more expensive house means higher utilities and maintenance costs.

[@X.MillennialResponder.X]

Unless you built passive or LEED

[@hannahwiz1]

10000%

[@Bexamous]

Depending on area 800k isnt a large house.

[@ryanpeterson3748]

@@X.MillennialResponder.X this is absolutely correct.

[@Adambomb942]

Is the 25% rule for gross or post tax?

[@teacupstory9816]

I just noticed the "so excited" sticker 😆

[@Kevin-fn1rn]

The first thing I would do after finishing school with 200k in debt is take out an 800k mortgage at 8% interest So at least she’s thinking logically

[@LaylaLover90]

If you are 1 MILLION DOLLARS in debt, hey, maybe not have a 800K mortgage????? Just saying. Sell then damn house and live within your means...sorry.

[@clooudgranny1300]

Just to clarify, the 800k mortgage is the majority of the 1M of debt. Also seems high to me, but they do make a good income!

[@carlgarrett5142]

I am a mortgage loan officer and have been since 2000.. It is a truism in our business that doctors love buying big houses. Not to mention fancy cars but that's someone else's department.

[@jaxxmelton]

I understand she's a doctor but why would you get an 800k mortgage when you are already knee deep on student loans and your current income doesn't justify having that big of a mortgage.

[@dacoolist]

Love these Live Streams!!!

[@blairkinsman3477]

Ok so the 800k mortgage doesn’t bother a Canadian 🇨🇦 - average selling price up here is around 700k for a house .. I’d consider the S-loan a high interest debt, and follow foo. We’re gna see more of the 7+ % mortgages .. it would be interesting to see the CASE STUDY of investing vs the S-loan & mortgage pay down in this situation at around an income of 200k, with tax effect .. maybe do 3 or 4 income levels and see if the outcome changes

[@charlesjoseph730]

Does anyone know why they aren't doing the longer live shows or uploading previous shows for the most part?

[@joelplatt2651]

Because Brian makes it so the editing team has their work cut out for them 😂

[@joelplatt2651]

But seriously I imagine they have to clear each video individually with their lawyer to make sure they aren’t stepping over the regulatory line

[@bogella2225]

Did you check the live tab?

[@scottwible1532]

I preordered the book on Kindle! Can’t wait!

[@DidacticToast]

Looking forward to your book!!

[@Lucky008aau]

46:00 Buy a raggedy car. You get to mooch a little easier. - Brian

[@BostonCycling_]

Here’s the thing though… they harp so much on financial safety but none of those savings matter if you drive a unsafe POS that crumples in an accident and you die. I think safety needs to be prioritized a lot higher even at the expense of a slightly more expensive vehicle. Safety features in newer cars could help prevent or lower the severity of an accident that will pay for themselves dozens of times over.

[@Lucky008aau]

@@BostonCycling_ I believe they would agree with you. Their 20/3/8 rule is more lenient than most influencing financial pundits who state only pay cash for all vehicles. Once you're commuting to a J-O-B, they want you to buy boring, safe, reliable transportation. The raggedy/mooch comments were when Brian was in college, when you drive whatever you can b/c you're still not supporting yourself.

[@M22Research]

Not mentioned with the encouragement to download “Know your number”… it costs $100. Knowing your number is not $100 complicated.

[@COMamaBear]

Thank you for your net worth worksheet! After years of investing and living on less than we make, we had never actually calculated this figure. I can't wait to track net worth over time. My wild card was our home's market value. The zestimate seems high, but we live in a rural area without a lot of comps. I'd love to know where others find their number.

[@johnmichael8748]

356,000 number is climbing and i like it! i hope these are from the younger generations

[@michaelswami]

That was very helpful conversation.

[@davisamills597]

Im surprised she doesn't have a car note

[@the_precariat]

Hmm the long-term disability question (around 28:10) is new info for me. My workplace is doing yearly open enrollment at end of the month and it includes similar coverage options-- could be beneficial to talk about what all ought to be taken into consideration during those yearly enrollment period types of offerings.

[@BoBandits]

Lucky! We haven't had an open enrollment since before c19. And we are still waiting for the results from the dreaded interview.

[@BG-qs6ii]

800k mortgage on making 270k gross is crazy. Sorry it is

[@NoRegertsHere]

It sounded like it got within 25-30% of take home didn’t it? Or did I misunderstand

[@kme06d]

A little misleading on the questioners part. Mortgage isnt traditional debt and it's designed to be paid long term. When you hear $1 million in debt, you're thinking medical bills, personal loans, credit cards. Stuff that has stupid high interest that has to be paid asap. The questioner only has 1 of those. Add in student loans to their credit card debt and they are only $213,000 in the hole. Seems like a lot, but when the household income is $250k, you can pay that off easy. This is a non-issue, and either clickbait by the questioner or money guy or both.

[@greenlantern1986]

Is this only a Q&A episode??

[@carlgarrett5142]

Most of their shows start with a certain topic then switch to Q&A after about 15 minutes, based on the ones I have watched.

[@LZ-gv6sv]

I am 32. 550k mortgage 470k student loan. 300k in retirement and kids 529. I think I am doing ok. I am working for the government so student loan will be forgiven in 5 years. 250k salary working 5 days for 48 hours.

[@BorisBidjanSaberi11]

470k student loan lmfao what the hell

[@Alex-cj7nc]

I've heard from almost every single financial channel to not solely rely on the government for forgiveness. I'd have a backup plan just in case the student loan is not forgiven. Hope it works out though!

[@LZ-gv6sv]

Borrowed 380k 5 years ago now is 470k with 3 years zero interest due to covoid. Interest accrue while at school. Talking about predatory loan

[@CarolinaCoalition]

​@LZ-gv6sv what did you spend 380k on to go work for the government?

[@clarkeysam]

​@@CarolinaCoalitionbecause he's earning $250k!!! Plus if his loan is forgiven then it won't have cost him anything.

[@beenokok529]

This 33 years old are making millionaire left and right. or just a billionaire richer.

[@MacD2029]

What are you trying to say LOLOL

[@Michael-uf1hz]

Don't mind him he's wasted.

[@nikitasmaglis9224]

I am in a similar situation to the first caller however without the mortgage debt (currently renting). According to the FOO and age > 30 both student loans and mortgage fall into step 3 (high interest debt) given the interest rate of 7.5%. Listened to an episode recently where high interest debt for a 30+ year old was defined as anything greater than 5%. I am currently working hard to aggressively pay of student loans debt since it falls in step 3 of FOO. (Most of my loans are at 5-7.6%). Thoughts?

[@reginaldsafety6090]

I don't know that I would necessarily prioritize that "Stay Wealthy" behavior, if you are not putting a significant chunk of your income into investments in your 30's to "Get Wealthy". Otherwise you will wake up one day with "no-debt" but also no wealth. If you are well into your 40's when that happens you really have very little time to plow money into investments, they just are not going to have any time to grow. Interest rates are going to come down, eventually. When you can re-finance that mortgage (and even the student loans!) in a few years to 4 or 5% then that debt becomes a lot more "digestible" as they say in this clip. There is a good reason that they didn't even consider accelerated debt payments until after they had maxed out the Backdoor Roth (6500 per person), 401k (22k per person), and even some less preferred individual investments accounts (where you gotta pay taxes twice!). They suggested that if you can live a lean lifestyle you can take some of THAT money and use it to clear up student loans faster, but not a mortgage. Hope this is some good food for thought!

[@Lucky008aau]

If it was me, I'd make sure to do steps 4-6 as well and aggressively paying down the student debt, and possibly also saving for down payment on a house.

[@tristanschmidt8784]

@moneyguys Hope this makes it in onto the money guys podcast, I just turned 27 in February and My income has changed drastically, went from making 40 to 50,000 a year on W-2 to becoming a salesman/1099 for the same company and making 78,000the first year, 220,000 the second, and 310,000 the third. I have a wife that’s 26 going to be 27 in November that quite her job in November of 2022, and have Ben living off one income. Since the beginning of 2023 till now we have been able to to put about 67,000 in a sep Ira at first then put it into a solo 401k as well as put 50,000 into and joint investments account, we have about 130,000 in retirement accounts, and 54,000 joint investments accounts, we have a 280,000 mortgage on a 360,000 house, mixed in with 31,000 of debt with student loans,car/truck payment,credit card payments. We want to build a house in a few years but don’t know if we should save more before that or pay off other debt before we do that. Would love to hear for you on that!