Technology
How Should We Invest If We Want to Retire Early?
In this episode, Dave Ramsey discusses strategies for early retirement with a listener, Jay, who seeks to retire in his mid-50s. They explore investment options, the importance of a paid-off home, and...
How Should We Invest If We Want to Retire Early?
Technology •
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Interactive Transcript
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This episode is brought to you by SmartVester.
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Connect with an investing pro near you at RamseySolutions.com slash SmartVester.
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Jay is in Alabama. Hi Jay, how are you?
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I'm better than I deserve Dave. How are you sir?
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Just the same. How can we help?
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All right. I got a lot done packed. It's a rather happy story.
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My wife and I have really kicked but I think we've done it good but I feel like we need
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to tweak it a little bit because we both have great jobs. We love them but we don't think
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we're going to be able to do this till we retire in our late 60s or 70s and we're trying
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to figure out how to expedite speeding up so we can retire maybe in our mid 50s.
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All right.
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So I don't know if that involves...
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How much have you got? How much have you got in investments?
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1.1 million.
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Okay. Good luck. Good for you and what's your household income today?
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475 thousand a year.
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Yeah. And how much of that's you? How much of that's her?
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She is about 350 and I'm the rest.
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So you're 175, okay?
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Yes, sir.
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All right. And what does she do for a living?
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We both work in medicine.
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I was going to guess. Okay. Cool. Good for you.
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But she didn't get Dr. Ritus.
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Well done. Yeah. Apparently you got a good net worth and a great, great income.
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How much of the 1.1 is in retirement accounts?
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About 800.
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Okay. What's the other 300 in?
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I got about 120 in the brokerage account that I invest in and then the rest is home equity.
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Okay. And what's your ages?
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I'm 45. She's 43.
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Okay. All right.
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So what you would do is to... Is your home paid off?
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No, sir. We are paying extra on it to knock it down.
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Yeah. What do you own it?
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We own about 600 on it.
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Okay. If you got a paid for home and you built some money in some non-retirement mutual funds,
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that's what people in the financial world call a bridge fund.
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It bridges from where the... From the time you want to quit to 59 and a half.
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Exactly. That's what I'm looking for.
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Yeah. Well, listen, you don't need as much if the house is paid for.
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Yes, sir. Well, our long current... We might have a kind of a strange long-term plan,
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but we both have very well traveled and we want to... Once we get to that age,
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we're going to... We'd like to sell the house, take the equity we get from selling the house
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by a smaller house with very, you know, place that we ain't got to cut the grass and stuff like that.
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And we actually want to spend about half the year in Southeast Asia,
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because we've been there many times in the love divide.
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So it's much cheaper to rent a place there.
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Yeah, let me ask you this.
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It occurs to me that you fairly easily could sleepwalk into half of this income,
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working part-time, even if you were doing some of it in Southeast Asia.
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My job currently is remote, but to be honest with you,
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we have no problem with this in our lifestyle.
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No, no, that's not what I'm saying. I'm just saying you have the ability to produce an incredible income,
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and you could probably do that with 10% of the strain you have now.
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You could probably... Between the two of you, pulling in a couple of hundred.
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It's possible.
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Oh, I think you know... You have to reimagine what you do, but yeah.
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Right, we're just both getting... We see the riding on the wall and we just want to...
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We want to do the right thing, pay off our house or at least knock it down a lot.
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I would get the house paid off and I would build some money in bridge.
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Is this 10 years that I hear 55? You guys want to be checked out?
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Top 55, 56. We're looking at, you know, say 20, 36.
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Well, the one point won't be almost $3 million by then if you leave it alone.
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Okay. All right.
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And you would have bridge on top of that, and you'd have the paid-for house.
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And you've got the potential to do something, not nothing, the rest of your life,
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and probably generate a couple of bills doing that.
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Right.
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There's a lot of different ways to roll into that 54 or 55-year-old point.
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And you're going to be in a really, really good shape.
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You have kicked butt. You're doing really well.
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The main place you've kicked butt though is your income.
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Well, also, I'm a very... We laughed, but on our very first day to ask her.
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I said, I need to know how much student loans you got.
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And she said, no, and I said, all right, that'll be a second date.
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Now hearing that story, we all knew you outkicked your coverage when you told us about your wife,
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but now this is a woman with poor judgment. Good for you, sir.
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You did well.
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You're a real romantic, buddy. I'm just saying.
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Yeah, you're a sweet girl. I'm sweet for a lot of over-feet.
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You got any student loans, maybe.
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And then he declares, there will be a second date.
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Okay, we'll go out again.
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You get the pleasure of my company one more time.
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I love the advice you gave there, David.
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I think there's a bigger lesson for our audience.
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We know from all kinds of data, you can go research this yourself,
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that when a person completely stops work altogether,
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there's got to be some purpose beyond just retiring from a job.
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And in this case, I love what you recommend here,
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where they can travel the globe, do whatever they want.
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Stay involved a little bit, just enough to maybe cash for all this,
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and not eat into that retirement.
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And I just think that's something to think about.
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This idea of, I'm going to stop cold turkey and just do nothing, but hang out.
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That's not what he was saying.
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But the data is really scary, but I'm in your dead in six months.
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It is. And so finding some purposeful work, even if it's volunteering.
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Doctors with that full.
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Yeah.
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I mean, you could go, you know, let's go medical doctors in Southeast Asia
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would be a premium.
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Oh, that's exactly right.
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So great, great point.
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I mean, that's what I was just thinking.
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You could do a lot of stuff you can do there.
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Yeah, this idea that I'm going fishing for the next 45 years is probably not a plan.
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Thanks for tuning in to Ramsey Everyday Millionaires.
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Need help with your investments?
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Connect with a smart investor pro at ramseysolutions.com slash smart investor
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