you're listening to Ramsey everyday millionaires where we talk retirement building wealth and outrageous generosity

Mark is in Springfield Illinois. Hey Mark welcome to the Ramsey show.

Hi Dave, thanks for taking my call. Sure, what's up? I've got a good situation to be in where family income is around 600,000 and trying to figure out the baby step 4.

Our retirement accounts don't equal up to 15%. Last year what I had done was put some of it in an index fund to make up the rest of it.

But I was trying to figure out if it would be more appropriate to just put the rest of it straight onto the house instead of putting it into an index to try to equal 15%.

What a wonderful problem to have. What do you do for a living dude? I'm a ER doc and wife still in residence.

Oh okay, so both of you are going to be MD's. Okay. Yeah, so it's not going to get anything but better hopefully.

I took a bit of a hit last year with the COVID stuff but it's still in just fine. Yeah, but nothing. Yeah, wow. Okay. How much do you owe on your home?

Down to around the hundred we just kind of got a little starter home to begin with. Well, what I would do is you know you can you can play with this back and forth if you want.

The point being that you should be at baby step seven instantaneously and then you should save and pay cash for your next home which keeps you at baby step seven. Would you agree with that?

Yes, yeah, that would actually what we were thinking for the index fund was that was going to be.

Yeah, much is in the index for about 2029 now 24 of that was pretty full. We put it in last year. Yeah, I mean I don't mind cleaning all of that out and other cash you can lay your hands on just knocking the hundred out.

And then what you need to do is you need to budget and say I'm going to save. I'm going to invest systematically X percent.

And the rest I'm going to pile up to pay cash for the move up house. Once I paid cash for that house and there's nothing left to do but invest and be generous to enjoy some of it. But there's no way you're going to consume what's going to end up being close to a million dollar income.

Correct. Yeah, that is. Right over looking out for it. Yeah, you know she's doing full time or not when she gets out because we're in a very good spot. But yeah, you're going to be able to do whatever you want to do.

But my point is you know you at baby step seven you just invest. You know, and so you can invest more than 15% less than 15% or whatever. And so you know you don't you're not like I've got a friend that makes a million six a year.

Okay, and we were looking at his stuff the other day who's asking me similar questions and I said, well, number one year baby step seven so the 15% doesn't apply anymore. It's invest. And so then you just start saying, okay, what are my investment goals because your consumption goals unless you're just a weird.

You know, like you're some kind of rock star or something, you know, and you're just spending out your ears like dysfunctionally, you're not going to consume much of one million six, you know, or one million. You're going to consume some of it, but you're going to enjoy it.

But then you're going to be highly generous and highly investing. And that's the only three things you can do with it is consumption. Enjoy it. And invest and be generous. So it doesn't matter if it's 8% because I still $80,000 a year.

You know, so you just lay out some percentages and say how much how quickly do we want to have a 10 million dollar net worth and having a million dollar income y'all have 10 million dollar net worth.

Yeah, this is a 600 and a new development for us and I just got out of residence the couple years ago. So yeah, but what I'm doing it. What I'm saying is I laid the baby steps out to extrapolate 25 years into the future for you.

And all I'm telling you to do is whatever percentages you put on consumption investment and generosity, just make sure they extrapolate with a million dollar income out 10 years from now and you got 10 million dollar net worth.

...