I Make 6 Figures And Still Feel Behind Financially

Brought to you by the EveryDollar app. Start budgeting for free today. I'm 24 years old and my current income is about $120,000 a year. The reason I'm calling you guys today is it feels like my entire life people have always told me go to college, get a good job, make a lot of money, and everything else will follow. I think I've done a pretty good job at getting to that point now, but it seems like the more time goes on and the more money I make, the life I always imagine myself having keeps going further and further out of reach. The reason I say that is, as I said, I live in Southern California in San Diego. I look for houses in San Diego, too far out of my reach. I make a broader circle when I go further. No matter how far I go, it still feels like houses, a mortgage is going to cost me around $3,500 to $4,000 a month, which with my income doesn't sound so bad. I think I've finished most of the steps I want to in life. The next thing I want to do is start a family and have kids and focus on that. It just feels so out of reach for me to keep contributing to my savings accounts, to pay off a mortgage, to be able to support my wife while she stays home, and to take care of kids and make sure that they have some sort of support going into school. I don't really know if I'm doing something wrong or if there's something I could do differently. Here's what you've done wrong, Jordan. You've assumed that you have five years left to live and that you must accomplish all of this in the next five years or else. All you need is patience. You're doing so well at 24, far better than I was. Yes, you have a high-cost living area, but there's no rule book that says if you don't own a house in San Diego by 25, you screwed it up, man. Release yourself from the guilt and from the lies that you were told, that if you just do all of these things, your life's going to be great. Those people meant well for you, but they don't live your life. I would just be very patient, go, you're crushing it. Let's learn to live on less than we make, put money in savings, and then do this for the next six years, and then call us and see where you're at. Okay. I appreciate that. Something I did want to ask, I'm currently putting money into my work, TSP. I work for the government, so we have a savings plan. I put money into my personal investment account that I'm saving. I feel like, obviously, I'm extremely grateful for the job that I have, and I know a lot of people are in a much worse situation than me, but I feel there's a lot of things I don't do because I'm just so addicted to saving my money. I'm so afraid of bad debt. I think there's a lot of things- Do you have any debt? I have a $7,000 remaining on my car note. Other than that- Are you working on paying that off? Yeah, I just paid off. I think it's $290 a month, and it's easier for me to just- How much do you have in savings? I currently have, in my individual investment account, I have around $20,000 in savings. Liquid cash in my savings account, I have $5,000, and then I have personal Roth IRA with $25,000, and then, like I said, my TSP has another $25,000 in it. Great. Well, you're doing great on the investment side. I would just have some focus with your financial goals, and right now, my singular focus would be getting out of debt. The next focus is to have a liquid emergency fund of three to six months of expenses. As a young single guy, this is also the best time because you have no other responsibilities, no one else to answer to. It's just you and your own goals. You can actually make a lot of traction right now until you meet that wonderful person, start a family, maybe they'll be working too, your income's going to grow over that time. All you're seeing right now is this little tiny snapshot of your life right now, and then you see these very big goals far away, and I think you're closer than you realize. Yeah, and I don't think you're comparing your life to reality either, Jordan. You either have expectations that you should be where you should be at 34, and you're 24, or you're seeing people on social media, or your friends are talking, whatever it is, and what's being painted in front of you is probably not the full picture either. And so if you are in your early 20s making six figures, no debt, so I'm going to count that for you because I want you to pay off your car tonight with some of the savings, okay? Just be done with the car. And you have cash saved, you have investments, everything that you're doing, you are doing it well. And the hard thing about building wealth the right way is that it takes time and patience. It's not going to be as flashy as the people you see on TikTok that are like, I bought 18 VRBOs, or Vrbo, whatever they call it, or Airbnb's, and like, you know what I mean? Like you're going to see, and I make one million a month. They're like, all the crazy stuff you see, majority of the time, number one, is not even true, or number two, they've built their entire financial life on a house of cards. So slow and steady wins the race, and it's not going to be flashy, it's not going to be exciting, but it is going to be solid, and it's going to be all yours because you're not going to be borrowing money to do any wealth building. It's going to be you actually making decisions about your life. And so that's what I would encourage you, that I think what you're wanting is not bad or wrong, but I think feeling like a failure because you don't have it right now, to George's point, at 24, we just want to like be like, Jordan, you're good, you're doing great, you're doing great. Yeah, I think one of the reasons I'm so overwhelmed now is because I have, happy to say, I've already met the love of my life. We're talking about marriage, talking about kids, I don't have a ring, I don't have a wedding, I don't have a honeymoon, which is obviously, I'm not planning on spending an extravagant amount on it, right? I can't imagine bringing kids into the world until I feel ready, which the feeling of being ready is different. Not emotionally, not financially, the best thing you can do is be debt-free with an emergency fund and be aligned with your spouse on your goals, financially, spiritually, all of that. That's the best thing you can do to be ready. Other than that, don't wait until you have a certain amount in your investment account to have a kid. No. And go ahead and get married, Jordan, if you guys know, do it. What's holding you back right now? Is it finances? I'm so afraid of not having money. How did you grow up, Jordan? I grew up, so my dad is the hardest working guy I know. He doesn't have a retirement, he doesn't have anything. That's another thing. And I'm so worried. I love my dad, but I want the opposite of that. I want the idea where I know the bills are going to get paid. That's why I love my job. Everyone talks about owning a business. I love having a union. I love having a stable paycheck. I love having investments made into my account automatically. There's no other way to do it. The idea of me, you're telling me to pay off the $7,000, which I know is a great idea. But the idea of me losing $7,000 in cash and it goes into my car, I know it's a good idea, but it feels wrong. Because in my head, if I don't save, I feel like I'm failing. Right. Because at that point, from where your psychology is, is that saving is the only thing you should do with money. And out of good reason, because you're looking at your parents and like, holy crap, they work so hard, but now they have nothing to show for it at retirement. But here's the deal, Jordan. There's two other parts of money that you have to engage in to have a holistic, healthy financial picture. Giving and spending. Okay. So you may go through seasons where you're going to be saving more. Maybe you and your soon to be fiance, soon to be wife, you're saving up for that down payment on a home and you guys are ramping back on lifestyle to really get that down payment. That's great. But over the course of your life, Jordan, if you have this mentality the rest of your life, that's where money can become an idol. You will hold onto it so tightly and have this sense of security that this is going to be your answer. And then you're going to look up and realize, oh my gosh, I have wasted my whole life because fear has driven my financial decisions, not a healthy balance of all of this. I think the budget is your answer. Budget for the fun stuff, budget for some giving, and budget for the saving. And realize, I'm young, I got a lot of time on my hands, you're doing so good. And Jordan, go on ramsaysolutions.com and pull up the investment calculator and put in what you have right now with investments at 24. And just do the math, if you never put another dime in, what you'll have at retirement. 40 years from now with compound growth. You're going to be doing great. Even where you are now, you're doing great, Jordan. So chill, relax, enjoy the ride. Well, George, when it comes to investing, we were talking about just the previous segment of how powerful time is. And even if you just do the boring stuff, time is on your side. So the earlier you can start, the better off you're going to be. Yeah. And the first milestones are really hard. And then it's like a hockey stick with compound growth. So getting to that first hundred thousand invested is such a marathon. And then from a million to 2 million, you sort of blink and you're there if you do it the right way. So I want to take Jordan's numbers, who was on the call with us. He made 120 grand a year, and he felt like it just wasn't enough. He was behind, he can't accomplish his goals. So he was like hoarding money to invest and couldn't enjoy any of it. And I just wanted to show the audience at home, even if he never invested another dime, where his investments would be to help with the scarcity mindset that he was experiencing. So he's currently 24. We're watching on YouTube or Spotify or the Ramsey Network app. So 24 years old, let's go to 64. So that's a 40-year career. And he currently has, he said, 25K in a Roth, 25K in the TSP. So we'll call that 50K. And he's never going to add another dime. So how much will you contribute monthly? Zero. And I'm using the Ramsey Investment Calculator. We'll put a link in the show notes to plug your own numbers in. Annual return, I'm going to go with 10%. Now, since 1950, the S&P 500, which is the top 500 companies in America, have returned about 11.8%. So 10% is very realistic. Let's do both. Let's do both. We'll go conservative 10. And then Rachel will be the optimist, glass half full gal. Always more. All right. I'm going to calculate $2.68 million at 64, if he never adds a dime. Basically 2.7, see if we round it up again. Now at 12%, you're looking at $5.9 million. That's a two. That's pretty wild. $6 million, Jordan. 10% over 40 years really adds to it. I hope he hears this. But let's go back and let's say- If you never do another thing, isn't that wild? Never do another thing. That's compound growth. And look, the contributions, he didn't contribute anything but the 50. And it turned into that just by leaving it alone. That's right. So if you could imagine continuing to invest 15% of your income- Let's add in 15% of his 120 grand, that's 1,500 a month from 24 to 64. Let's see what happens if he continues this. $12 million at 10% rate of return, Jordan. There you go, Jordan. And that's if you never get a raise and your spouse never works. That's right. Yeah, that's a good point. So let us free you. Enjoy some of the money because you're going to get to 12 million and go, should have went on a vacation probably. That probably would have been a good idea. I got a lot of money now and don't have enough time to spend it. Some furniture that we actually enjoy and want to pick out. You know what I mean? It's okay. Well, that's what happens. We talk about this book, Die With Zero, which we don't agree with in the book, but the concept is do not wait until you're 70 or 80 or at the point where you pass away to then hand your kids a million bucks when they don't need it in their 60s. That's right. That's right. Use it. Enjoy it while you're alive. And even giving them some too, right? But while you're alive, actually be- Give people like Jordan a leg up to be able to buy a house in San Diego at 24 if you're that boomer. That's right. There you go. Some encouragement that you don't have to retire broke and the younger you are, the more every dollar counts because it has more time for compound growth. We hear that all the time. People are like, why did I not start this earlier? Why did I not get out of debt and start? You know what I mean? Start the whole baby step process earlier. Why didn't I start when I was four years old? I would have had an extra 20 years. Not George. But that's the idea. The best time to plant a tree was 20 years ago. The next best time is today. Start. Start where you are. We all wish we could have started earlier. That's right. Create your free every dollar budget today. The simplest way to budget for your life.