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What's up guys, George Camel here. And as you might expect, I get asked a lot of money questions on social media and here on YouTube. And it would be tough to respond to every single one. But darn it, I'm gonna try until my dying breath. And scene.
But today specifically, I've hand-selected the most fascinating, helpful, and introspective questions. And we've done this before, and you guys did not disappoint. You came through with some really great questions, some weird questions, and some that were straight-up intrusive. Okay? It's none of your business how many hours a day I spend playing Monopoly Go. It's a personal decision I make. It's a lot. It's a lot of hours. Why are you the way that you are? Let's get to it! But first, I've got a question for you. Will you do me a huge tiny favor and click those like, subscribe, and share buttons?
Okay, thanks. Bye. First question. Let's start with a juicy one. How do RSUs work? My job gives me restricted stock as a quote unquote bonus. Well, RSUs, for those of you that don't know, stands for Restricted Stock Units. And this is a pretty common thing. It's a way to reward employees while also incentivizing them to hang around longer and not quit. So here's what I would do if I was in your shoes. I would check with my company's HR department for details about when those restricted stocks are fully vested.
Now this could be time-based or it could be performance-based. Once they're fully vested, it means those company shares are 100% officially yours and they're worth whatever their market value is. But remember what this really is. This is a single stock in your company and I don't recommend investing in single stocks. So if you have these as a bonus, here's what you want to do. As soon as it's fully vested,
sell it off and take that money and use it toward your financial goals or invest it somewhere that's a little more diversified, like an index fund or mutual fund. Next question. How do I balance saving for a house with saving for retirement? This is an actual fantastic question. And it's interesting where this falls in the plan that I follow.
which is the Ramsey plan, the Ramsey baby steps. Once you're out of debt and you have a fully funded emergency fund, that's the time to start trying to save up for that down payment. And it's also the time to start investing. So which do you do first? Well, it's kind of a choose your own adventure. Some people choose to invest 15% into retirement and then whatever's left over, throw towards the down payment.
But if that's going to delay your home purchase by too long and you've got a more urgent goal to become a homeowner, you could scale down investing, maybe up to your employer match. Or some people even do 0% investing so that they can get that down payment saved up faster. Here's the key. If this is going to take longer than two to three years to save up this down payment, you don't want to be holding off investing for too long.
So I would begin investing something. I would prefer 15% personally, and I would try to find other ways to increase income through side hustles in order to hit that down payment goal. But it is a little bit of a dance depending on your life situation and your goals. Ricky asks, Ricky Fedoro, Fedoro?
Ricky Fedora? Ricky Fedora from high school? Is that you? Ricky Federo. I don't know. Here's his question. How much net worth should I have to stop working a formal job? This is another great question. Net worth is a great measuring stick of where you are financially. It's not a great measuring stick to figure out if you can retire. Think about it this way. You could have a net worth of $3 million because your home is worth $3 million, but you have nothing in retirement. Well, you can't retire if
with $3 million locked away in your house. So this is more about your assets and what those are generating versus your net worth. So the way to think about this is once my assets, maybe that's a cash flowing rental property, a retirement account, who knows what else. Once those are generating more income than I'm currently making or more than my expenses, then I can actually retire. So that's a good way to look at it. Once your investments are making more than you do, you're ready, my friend. I'm ready. I'm ready.
Another great question here. You guys are on it today. I love it. Here's my rule of thumb for emergency funds. You want to save six months of expenses if you fall into any of these categories. You're married with a single income, you're a single parent,
you're self-employed, you have irregular income like commission or seasonal jobs, or you have someone in your house or you that has chronic health issues. So that means you're going to have to weather a bigger storm and that's why six months is appropriate in those situations. Now you could scale that back down closer to three months if you fall into either of these categories. You're single and you have no dependents or kids with a stable income or you're married with two stable incomes. Like let's say you know you're it's a mailman and a teacher.
Those are two pretty stable jobs. They're not a regular income. You might be able to get away with three months of emergency fund. The key with this is agree. If you have a spouse, agree on that number. And if one spouse wants more for security, it's okay to lean towards six months. It's just gonna take a little longer to save up. And when you use it, restock it. Don't forget. Wendy Robinson has this question.
My 24-year-old doesn't want to tie up money in a 401k until she's 65. She's good with money otherwise, has savings, has zero debt. Advice. Here's the way I look at it. When I was 24, I probably had a similar mentality because when you think about a retirement account, it's not very exciting to think, well, I can't access this money until I'm 60.
Why would I put the money there? I need to live my life for the next, you know, 35, 40 years in the meantime. Well, here's the problem. You're going to be 60 at some point, and I'd rather have that money growing for you with compound interest so that when you get there, you have millions of dollars in that account and you're going to thank yourself at 24 for doing that. So here's a great little exercise to do with your kid or maybe you if you have the same mentality. Go pull up the Ramsey Investment Calculator and type in
If I put $100 away each month from 24 to 64, what would that turn into with an 8% return, a 10% return, an 11% return? That's the average we've seen from the S&P 500. That will give you some great encouragement to start early because compound interest is all about time. And you have time on your side at 24, so don't think of it as tying up your money. You're still going to have money to live your life and go on vacation and do other things. Think of it as setting your future self up for amazing financial success. You set me up.
Emergency funds are the hot topic today. Let's talk about it. Here's the question. Can the emergency fund change or be lessened in the final stretch of paying off the house? Here's what they're talking about. When you pay off your mortgage, you don't have that expense anymore. Let's say your mortgage is $2,000 and $1,400 of that was going to the principal and interest fund.
The rest was going to taxes and insurance. Well, you have freed up $1,400 that you don't have to pay anymore. So you can deduct that from your expenses, which means your emergency fund could technically go lower. So the answer is yes, you could scale down your emergency fund in order to pay off your house. But be careful here. Do not get too starry-eyed and excited and trigger happy and deplete your entire emergency fund to pay off the house. But if you want to scale it down a little bit because you soon won't have that expense, go for it. Cheering you on. You go, girl.
Before we get to the next question for me, let's talk about you for a second. How are you doing? How's your savings doing? What are you storing them these days? Let me tell you, if you're not storing them with a high-yield savings account, you're doing it wrong. Because with these accounts, like the one offered by our sponsor, Laurel Road, you're making money while you sleep, while you REM.
which is science for sleep good. Because your savings earns interest just for taking up residence in your account. And specifically with Laurel Road, your account balance earns 5.15% APY right now. Plus, there's a ton of other great perks. No minimum balance required to open an account, no minimum deposits, and your deposits are FDIC insured, plus no bogus maintenance fees. So start making money off your emergency fund by going to laurelroad.com slash george or by clicking the link in the description.
in the description below. And while you're hanging out in the description below, check out another sponsor of today's video, Delete Me. Listen...
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So go to join delete me dot com slash George and protect those little piggies from the big bad data wolves or click the link in the description below. Jackie in the box 22 asks, who comes up with the funny memes to include? They're amazing. I agree. They are amazing. And I wish I could take credit for it, but largely I cannot. It is a group effort. We have an amazing team here at Ramsey that is basically full of Internet and pop culture nerds. Nerd alert.
Nerd alert! So I want to give a quick shout out to our producers who help, the editors who do a lot of the work, the writers will sometimes be thinking of a meme and drop a link in there so the editors can put it in, and some guy named Chris. He helps too. You want to see how good they are? Watch this. Meme. Meme. Meme. They're going to put something in there. I don't know what. It's not my job.
All right? They're getting paid to do that, and I get paid to do this. Everyone's happy. MrPlaysWithSquirrels has this question. What a fun username for such a sad question coming up here, guys. We're going to prepare your heart. What should I do? I filed bankruptcy, chapter seven, and IDK, where to go next? Well, MrPlaysWithSquirrels, your username makes me think of Dinky, and I just want to encourage you that a little Dinky clip could change your day right now. Let's play a little Dinky clip. Dinky!
Okay, so first of all, I'm sorry that you went through bankruptcy. That's not a fun thing for anyone to go through regardless of the circumstances that led you there. This is going to have some lasting effects. I'm going to be honest. And here's the effects of what could happen. It's going to be harder for you to buy a house. It could take another one to four years to qualify for a mortgage. And this is going to sit on your credit report for 10 years with Chapter 7 bankruptcy.
So what to do next? You want to start the baby steps. You want to get out of debt if you have any. You want to stay out of debt and you want to build an emergency fund so you never have to go back into debt again. If you have six months there ready to protect you, nothing's going to cause you to turn back to those credit cards or loans that got you to the point of bankruptcy in the first place. Beyond that, once you have no debt,
the emergency fund, begin investing 15% for your future and start climbing out of this thing. Get your income up, get your expenses down, create margin. And I wish you the best in your financial future, my friend. Sam Tamimi asks, how tall are you?
Okay, you know what? I'm tired of this question, frankly. And every time we do one of these man on the streets where I'm in the street, I'm the man on the street. Should you be terrified? Oh my gosh. Thank you, guy. There he is. I'm terrified. People are always like, how short is that guy? Well, listen, everyone else is just really tall, okay? And to be totally frank with you, I'm 92% of the way to six feet tall. You do the math. But yes, I'm on the short side. And according to Business Insider, I'm above average height in at least 25 countries.
At least. And for scale, here's a photo of me next to Peyton Manning. I think he's got to be eight feet tall. And can I also give you guys a little hint here? When you ask someone how tall they are and they're not tall, what you're really asking is, how short are you? How tiny are you as a person? Because I'm bigger than you. Who cares?
Sorry, got real personal. I actually don't care. I don't know why I was so heated. Legitimately don't care. Very convincing. Jacob D. Gentry asks, should I stop investing in my 401k with my job while I'm working on baby step two? Here's what he's really asking. I'm working on paying off consumer debt, but I'm also trying to invest. Should I stop investing so that I can focus on debt payoff? And the answer is a resounding yes.
And this is controversial advice because people go, George, you always say investing early and consistently is the best thing to do. Correct, but there's a time and place for it. And that is when you're debt-free. You want to focus on one thing at a time. Getting rid of debt is going to create more margin for you to invest. More than a measly 3%, you're going to be investing 15% once you're debt-free with an emergency fund. So yes, absolutely pause investing. You'll be debt-free in 18 to 24 months on average, another 6 to 12 months to get the emergency fund. Then you'll be back to investing immediately.
way more. Next question. Is the 25% for mortgage based on take-home pay after taxes? Good question. So this is based on my parameters and recommendations for buying a house and getting a mortgage. You want to have a payment that's no more than 25% of your take-home pay.
Now take-home pay is a little squishy. What I see take-home pay as in this scenario is what you get after taxes, but before other deductions come out like healthcare or retirement. So you may have to do some manual math to undo some of that and figure out, okay, if I make $5,000 after taxes, but before other deductions, then I can really afford 1250 for my rent or mortgage.
All right, I think that's enough for today. We had some fun. We were hopefully helpful. And the winner of best username is MrPlaysWithSquirrels. I just love the mental imagery that conjures up. Just delightful. Who run the world? Squirrels. If you have a question we didn't cover today, please leave it in the comments and let us know what else you want to get answers to. We are here to be a blessing. As always, make sure to share this video with everyone you know who needs some wholesome squirrel content to get through their day. All right, thanks for watching. We'll see you next time.
