$100,000+ Private Student Loans, Yet Borrows For A Stupid Tesla | Financial Audit

my name is John I'm 24. I'm from. Massachusetts and this is financial. audit well thanks for coming down from. Massachusetts what do you do for a. living there uh I'm a site reliability. engineer I work remotely from the house. okay cool so I assume that comes with a. pretty delicious income right it's. pretty good yeah what is it. um I think I I into my account I get. about 8 100 a month. wow okay that is. a delicious income Massachusetts is.

pretty expensive though we're in. Massachusetts you know I'm on the south. coast near like Cape Cod okay it sounds. expensive is it expensive uh rent off. the bat what's your rent I live with my. parents actually really yeah so 97. 200 net. a year and we're living with parents. which means you. better have an amazing retirement. account and no debt but whoops you have. debts yeah yeah a little bit encounters.

okay. hmm interesting so what's your financial. situation what are we looking at today. um yeah I mean uh overall I'd say it's. it's pretty good much better than it was. like last year. um what was up with last year uh you. know so I started I started this uh or I. started doing uh engineering like jobs. right out of college I got a pretty. decent like internship and from there uh. I was actually really good with my money. because I was a college student got a. decent job and I was not spending any of.

it but then uh you know kind of. Lifestyle creep just hit me hard yeah. you still love the parents right yeah I. did end up moving out for like a couple. months but I had a really bad uh issue. with a with a neighbor. um in my apartment building so that's. why I moved back kind of issued to try. to shoot you no she was just uh the the. walls were very thin and and she was. like. um just always uh like yelling through. the walls to like keep it down even. though like I'm a pretty quiet person.

um and to the point where like there was. a there was a time where uh I called the. cops in her because she was she was. threatening to call the cops on me for. just talking in my apartment and then. break the lease uh they were pretty. understanding because they've actually. had quite a few people leave because of. that surprised they don't kick time yeah. literally within the week that I left. another pennant had already left because. of her. um so it was a pretty pretty rough. situation okay so then you went back. home so lifestyle inflation are you just. spending a lot of money on just fun food. and stuff yeah yeah basically um like I.

I mean I was looking at my bank account. but it kind of just felt like you know I. I was getting the the steady income and. I could buy whatever I wanted and you. know like as long as as long as I paid. off my credit card at the end of the. month I was good to go so which I mean. in general okay sure and if we're you. know if we're not in bad debts or. anything we can certainly spend like 30. percent of our money especially in your. age on you know net money on fun there's. nothing wrong with that but like.

I guess it depends the overall situation. so we need to get an entire picture of. what your situation looks like what. would you give yourself right now in. terms of your financial situation in. general not for your age but your. financial situation where you should be. in life zero out of ten. um yeah I'd probably give myself like a. four okay yeah mainly because of the. debts yeah. um that I have but yeah okay. well we're gonna hit the deaths first. so so 24 years old 79 623 a payoff.

amount for something what is this. something uh that is a private student. loan private student loan yeah. well it's on forbearance so they did. they did give you a for oh dang and then. it's at seven percent yeah so does this. start up when the federal ones start up. yeah yeah so that's enough for them to. do it because sometimes like sadly May. that.

um you know be it and make it pay all. the way through yeah yeah I'm surprised. that that they forbeared it until like. kind of you know with the Federal. yeah so I haven't paid a dollar of my. student loans and that's why I've been. trying to like kind of situate myself. yeah I wouldn't have okay. so my Logic on this. in terms of student loans in the. forbearance it's like okay. since there's zero percent on right now.

it makes no mathematical sense to pay it. even if it is higher interest later than. the seven percent we certainly want to. pay off. um but that's as long as the money we. would put towards it to pay it off. earlier Wells on forbearance is going. towards investing was all the money you. would normally put towards it going. towards investing every single Cent. absolutely not then you did it wrong so. yeah completely agree okay so what was. the logic behind not paying this off. then because clearly we've decided you. did it in the wrong way what was the. logic.

um there was absolutely no logic 100. like like I said last year like uh I I. think my my take home for the year was. like. 89.4 K and I spent 89k where'd you get. to school in the first place why did you. have to borrow so much private student. loan debt. um a private university uh freshman year. and I ended up losing my my. um scholarship because I had like a 2.99. GPA and you needed to maintain a three. or higher. um but because of that I switched to a.

state school but I ended up I lived on. campus there and um what private school. did you go to I want to take a brief. moment to thank today's episode sponsor. Sofi student loans are crazy we know. that we talk about them all the time on. the show and there needs to be a way to. get a better grasp on them we know that. many private student loans that people. take out well they're in college can. have insane predatory interest rates and. when you're stuck in a situation like. that you feel like you just cannot get. out of it you feel like you can't even.

picture what the future looks like. whether or not you can get a house or. retire but that's where so far can be a. helpful resource with Sofi refinancing. your student loans can be a step forward. in making your financial goals a reality. there are mobile first personal finance. company that's helping their members. Bank borrow and invest all in one app. their mission is to help help their. members Achieve Financial Independence. and realize their Ambitions they've. helped nearly half a million people. refinance their student loans by. offering competitive rates and no fees.

the process is fast easy and available. seven days a week with Live Customer. Support Plus student loans are eligible. for unemployment protection providing. the loans are in good standing so if you. want to see if their rates are. competitive for you just take 60 seconds. and go to sofi.com forward slash Caleb. or use the link at the top of the. description below it was a Wentworth. Institute of Technology in Boston yeah. it doesn't mean anything why don't you. just get certified or something well. dude I swear in Tech right now man.

um I know Tech is having you know a. little bit of a post. hiring everyone a layoffs type thing but. even still for the people that aren't. getting hired man experience first even. LinkedIn just came out with a thing. today saying so dating the episode. recording saying that they think the. future based on the application the. applicants and what uh hires are looking. for are going to be based on job. experience and not degrees man we could. have got you certified imagine if you.

went through something like the partners. we have course careers or any other. certification program and got certified. in something. and you made the same amount of money. each year and you didn't have eighty. thousand dollars of private student loan. debt yeah obviously okay I'm not gonna. bully you for something you've done in. the past so I don't want you to think of. that this is an example for those out. there especially those who want to get. into Tech or you know are graduating. high school and then trying to decide. what to do next man a lot do require a. college degree I highly doubt what you. did does.

um yeah I mean actually for for my. current career I don't even think they. have. um they have Majors for it. um it's kind of like software. engineering adjacent. um so yeah I completely agree like that. I'm not saying the degree is bad either. because you can get return on your. investment but I'd rather like two years. of Community College and two years at a. state school after that yeah yeah for. sure yeah I know when I was in high. school basically it was just like oh. everyone goes to college I'm a decent. student you go to college you know that. was kind of the thought process and I. uh basically just went to went to.

Wentworth without even like touring. other schools like seeing what else was. out there or uh yeah so I partnered with. course careers for a reason man for. other people to check them out because. avoid this crap. crazy. oh. I will say though I was lucky to to uh. you know come out basically I I. graduated in March 2020 like when kovid. like went crazy. um I got my internship like before my. senior year was over. um and from there I've had a pretty good.

I've had like stable income since so. let's calculate what this minimum. monthly payments gonna be. so would you say this was a mistake. uh I I wouldn't say for in I can't take. it back and I have a really good career. it was a mistake I wouldn't say it was a. mistake for me no okay well if you don't. want to make a mistake today you should. hit the Subscribe button because that'll. be the best decision you've made of the. day. terrible Segway but you should subscribe. because we're trying to get the 750 000. subscribers I'm very thankful for.

everyone who has subscribed so far thank. you. so at 79 623 seven percent interest it's. gonna probably it's probably the. traditional 10-year repayment I assume. um yeah I mean they have like a 30-year. payment but I'm not doing that but. you're on the 10. yeah yeah okay. okay I basically want to pay it off as. fast as possible. um and and since uh like the start of. this year I've like started budgeting. and everything so I have uh my spending. is is very low. um sure and it better because this is.

about to be this is going to be 924. dollars. a month repayment. death death. absolute stupidity death. oh my goodness just to get a degree and. I'm glad you're making good money with. it but again I'm not I'm not gonna bully. you on it too much but yeah I'm hoping. to pay it off a lot I'm hoping to put. I'm more. next sorry go ahead and continue and. then I'll go into mine yeah no this this. yeah okay uh I was just gonna say that.

I'm I'm hoping to pay that off a lot. faster to save on some of the interest. costs on a seven percent skew we're. paying it all right you're damn right. yeah absolutely. and then we immediately go to the next. one and we decided oh we're 24 we better. get a brand new awesome car. yeah gotta get a Tesla. where you owe 51 628 kill me now 98. death. stupid six percent so it's not the worst.

but if you consider a depreciation in. cars in a standard car market which. we're getting closer and closer and. closer to actually entering. oh again yeah they're 900 900 931. minimum monthly. so now with the minimum monthly payments. we're like close to 2 000 hours a month. yeah starting in August the car gets. worse too. um because uh so that that model 3 was. 51 or 56 000 when I bought it because it. has the full self-driving yeah um and.

the auto and the auto uh acceleration. boost. um because of the full self-driving I've. actually been trying to sell this car. um I can't find anyone to buy it because. no one wants to pay the 17 000 for the. software option so I'm basically like. negative 20K on it. um I've been trying to sell it for uh I. I'm I mean I just want to go get as. close to even on it you know but you're. gonna like I'm more than happy selling. it like I've accepted that that I may. want to do that to like kind of better.

my situation. um I work from home like I said I. literally don't need the car I'd be. happy with literally anything. um and my fiance and I are looking to. move in together soon she has a car yeah. so congratulations thank you appreciate. it so what oh what's like the lowest. you'll sell it for Let's get it on the. books yeah so um I I just recently. updated this loan to like auto pay the. max that I can to try and like eat you. know break down some of that debt. um on it so I can sell it and you know. not have to pay like the whatever it is.

out of pocket I'm not really sure that's. kind of what I'm worried about is with. all that negative equity like if I were. to sell it privately like like you know. if they bought it what is the lowest if. you determined. um I mean I'd be willing to sell it for. like 35 30. um. it's just I need to be the plan yeah. because even so like I'll save like I. think it was like 11k in interest if I. do that like right there alone it kind. of helps with that negative equity so it. does yeah man. because of Tesla it's like my dream car.

no and yet. I'm just investing everything right now. which is what you should be doing we. gotta take advantage of our age I'm. almost in those in that big scary 3-0 uh. but even still the compound growth that. we get to take advantage of our age dude. it should not 900 so more than 900. should not be going to a vehicle yeah at. where you are yeah make a good income. let's get an okay car sure absolutely. fantastic thirty thousand dollar car I. don't give it but are we doing this now.

and when we talk about card debt. in general and this is just again with. everything I say this is based on my own. past getting out of really bad debt and. getting in a good point and then you. know at a good point now and helping. people wanting to help people get out of. the situations that I was in there are. certain debts that I'm okay with if we. go about it a smart way because math. always wins math always wins where I. think about depreciation with a standard. car like if we use three percent.

leverage on a car which is very. difficult to get today. um that's where I'm okay with it if. everything we would normally put at it. I'm going to use an example I'll use. again so what was this what was the car. it's a Tesla Model three I don't know. what was the price of the car oh fifty. six thousand okay let's call it a 60 000. car for the example okay you're gonna. you have sixty thousand dollars saved up. to go get a 60 000 car you can buy in. cash or you could put ten thousand. dollars down and then borrow fifty. thousand dollars at a three percent. interest in this dream scenario then if.

you invest the other fifty thousand. dollars and S P 500 and it goes and. that's not an investment advice this is. an example of. okay the S P 500 with dividends. reinvested is going to do over 10 a year. annually with all the years and down. years combined based on historical. performance that's obviously going to. beat the three percent and the three. percent we're also taking into account. appreciation so maybe the interest rate. mathematically if we really stretch it. out looks like more four or five percent. maybe even close to six percent but. still you're beating it in the S P 500.

six percent with depreciation certainly. not going to be beating that now where. I'm against it is if people go ahead and. put the ten thousand dollars down and. instead of investing the fifty thousand. dollars they just go below the fifty. thousand dollars or even a part of the. fifty thousand dollars then there's no. mathematics it's no longer. mathematically making sense also when. people go and take out debt on a car. okay you have sixty thousand dollars. you're gonna get a sixty thousand dollar. car oh maybe we'll put ten thousand. dollars down but maybe since we're. putting ten thousand dollars down maybe. we get up 65 000 car maybe we get a. seventy thousand dollar car no you're.

gonna get a sixty thousand dollar card. because that's the cash you have it only. works in specific instances. you did not do it right oh yeah. absolutely not and I've actually had. three cars before this uh so like I said. my my spending was like unhinged last. year uh in the past couple years. um cars are one thing that I've really. been into like my whole life so I just. ended up just going like through car. after car. um yeah so like a lot of money was lost. just like paying down payments and on. say like selling the cars afterwards.

um and yeah this car was like the the. last one before I like got my act. together I bought this car at the end of. last year. um and realizing now like last year so. this is how bad it is yeah yeah. yeah because if you get a car even if. you sell it for like thirty thousand. dollars then you're you still have to. come up with the other 20. yeah yeah so. do you need a car or do you and your. fiance live together we don't live. together yet yeah okay but we will be. starting at the end of the summer yeah. end of the summer so pretty soon yep and. I live with my parents and they have. cars as well and then your fiance she.

has a car yep okay cool. okay. sorry I assume she she yeah okay she. yeah yeah I would borrow her car when. necessary if you're working from home. and then we just get rid of this car. dude yeah at that point I got all the. pictures taken for the for the posting. oh you're ready you're ready to go. um I was thinking of listening at like. 40. uh going down to 30. yeah yeah okay. like with with those options like. basically a Tesla Model 3 without those.

options are selling for like 28 30 like. same year with those options technically. it should be worth like a bit over 40. but just like going to a dealership they. just don't want to pay for these. software options no um so I'm hoping. someone out there wants full. self-driving it's pretty it's pretty. cool but uh sure. so. we also have. federal student loans yeah yep jeez it. just keeps going yeah the student loans. are are rough. you just wouldn't that that that for.

this so we're over a hundred thousand. dollars in student loans yeah I think. it's about 105 yeah that's insanity. so here we have 26 700 uh 270 6. I'm guessing that's gonna be about a. 250 minimum monthly payment. on the traditional 10-year. now typically when you see these again. it doesn't show the interest rate now. because they're under ferment I don't. know why they do that because it's. stupid but it's probably going to range. anywhere from four to six yeah I think.

it was 4.15 I I couldn't get it too. short yeah yeah I believe so well. usually they're different per. yeah I don't know I'm gonna say four to. six percent I saw it on a page uh like a. couple weeks ago and I couldn't find it. again. um okay but yeah it's somewhere around. there maybe that's the average across. all of them it could be and what is this. it's just a you spent money on a card. and then you cut it off yeah I think. that's the Best Buy card I you know I. wanted to bring that up Best Buy card. because uh you know more more awesome.

that's no longer the case the balance on. the best right because it's clear that's. why I sent that the other picture yeah. we paid off the Best Buy card. yeah it would have been 30 but I'm glad. we paid that off what was that what were. you doing on the Best Buy card you must. have bought some just idiotic purchases. I bought like a 2 500 graphics card and. then uh MacBook what is that a 40 90. it. was a 3090 TI okay yeah yeah to play. like Counter-Strike the playground. just yeah.

stupid. maybe for the new Counter-Strike oh yeah. you never know with all the smoke yeah. um. sorry I am too I have way too much time. on it my friend tries to coach me he's. very good he's in like a top zero one. percent of them he's crazy but we have. an American Express I don't so new. charges 100 uh no new charges 658 and. they're pretty much all both so like 600. 58 of bulls mostly there's a there's a.

few things like I'm oh okay ring monthly. I'm okay with that because it's good to. keep that stuff backed up. and. there's some things that are like. Services I'm thinking maybe some. utilities I'm not 100 sure and then. obviously uh super charging on the Tesla. you know that replaces yeah so I'm not. gonna beat you down for that but then. New York bagel and Speedwell coffee and. Shaw's empower.net and bird trick keys. and Ben and Jerry's and Blue Kangaroo.

and stop and shop for 15 bucks and. Wellies and Super Stop so I will say uh. like Shaw's Stop and Shop Speedwell. that's all groceries Speedwell is like. my coffee subscription. um well you don't need that well no like. like whole beans I do I do espresso at. home oh cool but that's an expensive way. to do coffee still and Taco Bell and I'm. a coffee dude I get it like I get fancy. beans I broom and I do espresso at home. as well uh I was just drinking a special. right before this but still when we're.

in bad debt do we need that I don't. think so and Taco Bell and parking in TJ. Maxx and Hulu Rick Hardy's and Hulu Bova. Bakery Dragon Bowl. and Panera Bread and Ichigo ubereats Red. Robin. don't think we need to be doing that. sure I will say I have I have a pretty. reasonable budget for like food spending. like going out to eat you don't have it. going out to eat spending thing if you. have a seven percent student loan thing.

that's starting in two months if you. have a Tesla at six percent with. depreciation included in that. that's true. and then seven dollars purchase which. was on Amazon for another card so you. pay off all the credit cards we don't. have a credit card debt which is good we. just have disgusting private student. loans and some federal student loans. that some of them won't be great and. then a Tesla that you're underwater in. yeah. lovely lovely lovely okay.

is this a checking account I think this. is a checking account oh yeah it looks. like my checks we have eight thousand. bucks and nine thousand bucks in there. roughly yeah okay so 9 000 in checking. nine thousand checking there wasn't. really much in here that was crazy I'm. paying for Rocket money which I'm you. know a rocket money proponent rocket. money is great that's what I use now. um and just paying off bills and cars. but this this is interesting Verizon. Wireless for 237 and that happens twice. that's my phone bill yeah what the [ __ ]. is it just your phone no no so I live.

with my parents and uh I don't pay I I. give them some money for rent but we. don't have like any like super hard like. lines but I basically just take over the. phone bill and the and the internet okay. well what happens when you move on in. three months then we're gonna split it. yeah okay yeah. so right now you take care of that. though yeah what was that again how much. was that it was it's two it's gonna be. two uh 11 because I just got rid of I. was paying for like protection and it. included like tech support which is like. an extra 30 a month and they didn't tell.

me so I called them up and I got that. sorted okay. uh then this is an other online banking. but money was in money was out I didn't. I don't know it says four but it's only. 100 that's the savings that's tied to. that checking I was like well you're. clearly what why is it a hundred dollars. we've had twelve thousand dollars in. there I need to go from 12 to zero I um. I opened up a high yield and that one. has like that one is like a point oh so. that's what the Marcus is from yeah. exactly you know honestly even better. this not the not to uh keep plugging but.

I only partner with companies because. it's even better. you get 4.15 it's only 0.15 better but. you could get 4.3 by using the high. yield that I use which I linked below. yeah plus a bonus you'd probably get a. 250 bonus as well if you transfer it. over there might be worth it a few extra. cents a year 50 depending but you have. 24 417 in there which I'm very happy to. see. yeah and I will say though and one of. the one of the reasons why I was uh. pretty happy to chat with you is um that.

24 000 right there is uh was my savings. for down payment on a house so it is in. savings but. I was very close to to I actually had an. accepted offer on a house the whole. thing went through and then it basically. got bought at foreclosure as well so. then I ended up pulling out of that. because it was like some crazy situation. and I didn't want to how much was the. house it was like 350. okay yeah. housing's cheap up there oh it needed it. needed some work it was a small ranch I.

needed some work. um compared to Austin 350 would be a. shed yeah well I'm not definitely not in. the city like nearby Boston is is. awesome but I figured by the coast it's. totally expensive but I got I don't. really know the area so yeah yeah it was. it was it seemed like a good deal but. which is why we kind of pulled the. trigger on it but okay um I'm glad that. I got out of that out of that deal. because it was a pretty sketchy gotcha. and then we have a Schwab. you don't have a Roth IRA no I don't. okay we got to get your Roth IRA here.

pretty soon uh and it's thirty thousand. dollars in a 2065 so index retirement. fund which I love those those are good. they're you know more aggressive at. first then they get more conservatives. if we get as we get close to that. retirement age that is uh the 2065. so. that's cool. that's it right no more dad. uh yeah yeah that's it yep scared me. so now it's gonna come down to what do.

we do about all this stuff yeah I had. like a couple months plan. um so basically like what was your plan. me and my my fiance were like gonna. re-attack trying to get a house um at. the start of next year no no no. go ahead continue okay um so my plan was. to like right now my monthly spending. with the car like insurance and. everything is around like 2 000 2300 or. something like that. um so I was planning on using basically. every other dollar to put towards uh.

first to pay down the car to get it like. Eve like not underwater anymore so I can. sell it once I sell the car I was gonna. like start paying off the student loans. like basically all that probably like. around five grand a month towards. student loans for a couple months. um. just to pay that down as much as I can. and then when we get the house I would. probably. bring it down more closer to like the uh. the minimum payments or double the. minimum payment something like that well. in most cities right now you can rent. for uh kind of under the value of homes.

and a lot of the major cities that. especially exploded during the pandemic. so I know when Austin you can rent. for a more affordable price than owning. right now compared to the values of the. homes so I might rent for a little. longer until interest rates start doing. a thing you know inflation also dating. inflation four percent today year over. year so you know we'll see how long they. hold if they go up maybe again just a. little and then at some point you know. they'll probably come down you know. maybe in a couple years that might be. the good time for you to get a house but.

no right now we're focused on paying off. a seven percent private student loans at. 80 000 of stupidity. we're not getting a house right now. thank you no mortgage so 211 to go into. your phone. debt we're getting rid of the Tesla. immediately so I'm not going to put your. minimum monthly payment of that in there. the 924 dollars of this private student. loans and the 250 dollars. of the public student federal student. loans will be.

a thousand one hundred seventy four. dollars a month. com. use credit cards So you you're an okay. credit card person so I'm gonna allow. you to do that but one thing you could. consider will use rocket money as well. so rock money is good never mind. you're good there sweet I'm just trying. to think of other things to recommend. you but I I think you you have good. programs right now. you're good programs right now.

so a thousand one hundred seventy four. dollars. is minimum debt payments. you know what your rent is going to be. in a few months. um if I were to get an apartment oh it's. not decided oh so I live with my parents. right now yeah but you said to move into. the theater she's moving in with us. oh that's completely different okay yeah. uh the internet is a hundred. to add some cheap internet okay yeah.

that's gigabit but it doesn't work too. well. not fiber no not fiber that sounds about. right okay. um now you don't pay for gas because. it's Tesla and we're getting rid of the. Tesla anyway so we're not even gonna do. the the charging you pay for any other. utilities like electricity at the home. or is that on the phone um I I give my. parents 150 a month. um for just the utilities what not now. how does the food situation work in the. house with groceries and all that uh I.

just I buy all my groceries and if my. parents I cook a meal like I'll you know. I'll eat with them sometimes but um I. handle my own food then I think you can. do kind of cheaper than most people. right like how can you eat what they. prepare. not too often like maybe once or twice a. week once or twice a week yeah I'm gonna. give you 200 for the dollars for. groceries yeah I will say like I've been. I've been kind of uh being a rat at the. house and uh I've been like living off. of like maybe 100 to 150 a month on. groceries like my budget I set to like. 400 but I haven't really hit even close.

to that now I'm gonna give you 250 and. then for like toothpaste face face care. all that stuff. uh I'm giving you. 75. any other minimum three payments that. you can think of that you have not. including the Tesla not including what. we've gone over so no car insurance. we're not thinking about that either. right now because Tesla's gone yeah. um. that being the case no I don't I don't. think so. okay cool. then your minimum monthly expenses in.

order to survive are actually incredible. meaning that you should be able to get. out of this situation we can get you. into owning a home with your future wife. in order for you to survive you need 1. 960 a month. compared to your 8100 I mean come on. you know 24 your needs are 24 that's. that's incredible but obviously we just. don't like the math around the debt so. what we're going to try to do is take it. take advantage of your income and that.

Gap there and you living at home now to. pay off aggressively the aggressively. stupid private student loan. Tesla we sell for 30. you owe 20. you. know cool that's great I have to pay. that like immediately though when I sell. it right you do because what you're. going to do is take twenty thousand. dollars from your savings and it's done. hurts that hurts but it's there for a. reason. it's okay I mean yeah and most if you. know where you are 4.5 or the savings.

account I use 4.3. that's not beating seven percent so. there's no point of it even being there. you know sure when we can just pay it. off like math it's just full math makes. no sense yeah so we're pulling out. twenty thousand dollars you have four. thousand four hundred Seventeen dollars. left in there. um and then you're paying off the the. Tesla's done today no more car insurance. well fantastic saves you some money. because we'd have about two thousand. dollars Less in uh in how much money you. have left over on a monthly basis in.

fact your needs would be 50 if we still. had the Tesla. yeah so. because that thing's ridiculous for you. you do not need that yet at some point. sure. no honestly not at some point it's just. a ridiculous car to own it is but I mean. at some point you can have it yeah yeah. so from there what do we have. Tesla's gone eight thousand one hundreds. coming in on a minute monthly basis. minus that by your 1960. Okay cool so you're.

ah okay there's four thousand dollars. left in your savings four thousand four. hundred. guess what you're taking out two. thousand four hundred. sorry. what's that for. eign. six thousand no you're taking out yeah. six thousand from your checking.

and two thousand four hundred from your. savings. into eight thousand four hundred and. you're putting that immediately towards. the private student loans okay. because you with where you are in your. age in your career field and leave it in. at home. Eve just with a one month emergency fund. which is what you can have on the side. that's perfect that's okay that's an. acceptable risk level for your situation. because if worse comes worse I don't. think your parents gonna are gonna allow.

you to starve on the street Something. tells me. yeah they're pretty good people. so we minus that by eight thousand four. hundred okay so private student loans is. now seven thousand seventy one thousand. two hundred twenty three. we're going to divide that by the six. thousand one hundred forty dollars. you're going to put towards it a month. you know actually because you live at. home because there is money to work with. I want to be a little more flexible. I I want to start being a little more.

flexible I will allow. 150 a month. and going out to eat money cool and yeah. that's what my budget is right now for. that. of course brings it down to 5990 of. what's left over because that's still a. good number that's why I'm allowing you. to have more flexibility if people are. cutting it close then I have no. flexibility but that seems reasonable. just so if if 150 a month on enjoying a. little bit of life gives you a higher.

success rate of completing this even if. it's a few months longer I would rather. that happen than a higher chance of it. just falling apart and you not. completing it so if that's what it takes. it's a little better so I want to be a. little more flexible on that going. forward but it also again it's situation. to situation so this is your situation. and that does not apply to everyone's. situation now we have 71 223 left to pay. off on the private student loans and we. have an additional 5990 on a minute. monthly basis so divide that by that. what are we looking at with you.

following that exact budget strictly a. year a year so a year from now. the private student loans are gone which. is actually incredible for an 80 000. student loan balance of seven percent. I mean a year from now they're gone. that's incredible yeah imagine what your. life looks like going forward it is yeah. and when I was like crazy using the. calculator for um like the student loan. repayment calculator you know if I were. to do like one of those like 15 30 or.

whatever like Flex income loan repayment. things I think the interest that I would. pay total was like over two hundred. thousand uh yeah so that's that's. horrendous now you have an additional. six thousand nine hundred twenty one. dollars a month left 12 years from now. because Tesla no longer exists one year. from now private student yeah one year. from now private student loans no longer. exist men of them say I'm gonna say. about half of those federal student. loans are about five percent or higher. so those are the ones we're gonna try to. pay off as quickly as possible. so.

of the 26 276 we're gonna say. about thirteen thousand one hundred. thirty eight dollars of them are. slightly higher interest so we're also. going to pay those off as soon as. possible and of course with 6921 left I. mean that's incredible you're gonna be. able to do that in two months so a year. and two months and uh your bad debts are. gone then your minimum monthly payment. those lower interest you know four or. five percent or less student loans until. they're paid off yeah television is gone.

and that'll take about 10 years but. that's fine because it doesn't matter. math wins. at that point it's going to be about 125. a month. going towards minimal monthly payments. at that point what I'm okay with. is 50 30 20. 50 our needs 40 of wants or 30 on wants. 20 on. uh savings so. we can go into the world of thinking.

about a home at that point in a year and. two months actually I lied so the 6921. dollars left. you don't need much for an emergency. fund yet we're going to do a basic. starting ten thousand dollars one so in. two months save up so a year in four. months all the bad debts are gone and. you have ten thousand dollars for an. emergency fund we'll want that to be. higher once you have a mortgage and. everything like that but that's going to. be your starter from there I want what's. the percentage of contributoring at. right now to your 401k.

um I knocked it down to like the minimum. match or like the maximum match I think. it's like uh three through four percent. okay yeah I always take the match. because that's 100 return on the. investment so it makes again no. mathematical sense not to. so we're taking the match from there I. want you to bump that to. about 10 let's say and then max out your. Roth IRA after that so at six thousand. five hundred dollars a month.

that's gonna be 541.66 on 67 cents on a. monthly basis that you're contributing. to it. and then. after that whatever is left. mathematically. to get to that 20 of your income it's. probably gonna be about. fifteen to sixteen percent is what. you're going to be putting into your. 401k and then you're maxing out your. Roth all right so I think that's what. it's going to be to hit that 20 Mark. that we're trying to do so that should. be good that should be fantastic so as.

long as we're maxing out the wrong fire. array and then putting whatever is. mathematically left into the 401K and. then try to make a Roth option if you. can because that's even better I don't. know if they offer that companies are. starting to offer that more and more. yeah I have no idea what they offer yeah. take a look into that if you can change. it to Roth I definitely would because. the benefits far outweigh uh any. benefits you'd get with traditional so. from there what I would personally do. or are we still living at home at that. point in a year and four months yeah.

that we are okay. so I would actually keep my needs at 25. and they'll actually be a little less of. that time but you can up the groceries. and stuff like that if you want but. needs it 25 I would have my wants at. about 20 then 20 are going to. uh investing. so that's 65. is allocated so from there I would have. the rest going towards stuffing up as.

much money as possible in a high yield. savings account for a down payment on a. home hmm. yeah. so I'm thinking. 835 a month you can stuff away to home. and what will be the home price range. you'll be looking for at the time for. you and your fiance. um yeah I mean we've been looking trying. to keep it around like 400 000. okay. yeah. this is just it shows the strength of. your income at only 28 months you know.

or 2.3 years two years and a quarter. you have your 20 down payment that's. incredible are you gonna live at home. that entire time so that's three and a. half years from now yeah yeah okay. parents yeah I don't plan on uh it's. okay with that. I think so yeah that's a conversation. with him yeah but with that um you know. how I think you allocated like 20 for. wants. um you know that's something that. totally comfortable like knocking that.

down to get the down payment cut it down. to 10. yeah cut this to a two-year or. you know one year three quarter type. yeah like as much as you want to that's. incredible and you're gonna retire a. multi-millionaire and you're gonna uh. have a nice house uh you know and then. at the end who knows what the interest. rates will be at that point but maybe. you'll be able to refinance it you know. at like three percent at a later date. which would be incredible yeah. um if it's not then you know maybe we. start paying a little bit towards it to. start paying it down but it just depends. depends on the situation who knows where.

we're going to be at in two three years. what matters most now let's get rid of. that Tesla this is stupid for your age. it makes no sense and you don't even use. it we're paying off like crazy by. keeping our budget pretty darn strict. these private student loans aggressively. hard now and then we're paying off. anything you everything that's about. five percent on your federal student. loans and then maybe anything that's. above yeah four to five percent as well. and mineral multi payments until those. are paid off and then we need to start.

and I want you I want this let's let's. do a little investing math real quick so. if we're doing 20 this is of course with. your income not even going up at all. over the years 24 but at the time we got. to wait a year before we can do it so. you'll have 35 years left of investing. if you wanna. uh retire 60. which is great. live the golden years. thirty thousand dollars in there. additional 1 620 on a minimum monthly.

basis. over the course of 35 years contributing. compound monthly beautiful following the. average stock market return of eight. percent would be 4.2 million dollars. which is pretty cool and that's not your. income even going up at all yeah so you. know we're being I'd say a little more. on the conservative side there after. inflation it'd feel like two million. dollars in today's money so with. following the four percent rule. you could walk with eighty thousand. dollars a year. and that's not including the 401K that's.

it's good in the foreign. K just hitting that 20 of your income. got you 20 of your income invested will. be that it actually be a little more. because uh. the income what I'm trying to think I. think 1 620 is a good number to go off. of you can amp that to 25 as well if you. want to do more than that but again it. should be higher than two million. dollars in today's money because your. income will go up over time but that's. just what it's looking like today.

so yeah. I think you're set up for Success it's. just the big thing right now is just cut. back a little make the budget what I. listed and then pay everything. aggressively towards this I haven't seen. any indication that you have so far. you've been putting a little bit into. Marcus but even Marcus is only up to 25. 000 hours with the money you've been. making like if you didn't both last year. the private student loans would be gone. like we've shown that so right now it. just depends what you're actually going. to do knowing yourself knowing you in.

the life you live tell me what is going. to happen when you leave this place and. you go home yeah I'm definitely getting. rid of the car uh it's something that's. been on my mind uh you know past couple. months I just have been worried about. um about the negative equity on it uh. and the fact that we've been looking at. a house as well so I was like you know I. have this savings but it's for down. payment on a house so I don't feel. comfortable selling the car and having. to pay that out of pocket. um but uh yeah definitely getting rid of.

the car using whatever from savings I. need to to offset that. um. and then yeah just aggressively down. paying down the uh those private student. loans well it's kind of been my plan but. I I like I did have in my plan getting. the house at the start of next year so. definitely gonna that makes no sense I'm. gonna gonna wait on that a bit longer. good good if you follow this dude you're. gonna be a multi-millionaire by the time. you retire and then of course we have a. combined household income at some point. what does she do for a living uh she's a.

teacher okay so with the combined. household income and you know the. benefits that teachers get like you guys. are going to be multi-millionaires by. the time you retire. in a pretty early retirement too you're. not going to be working in your 60s or. you can if you want but you're not. forced to not going to be working in. your 70s especially so you know right at. that 59 and a half when you can start. someone draws. dude you can start them and it's great. it's awesome. any final thoughts. um no I just want to say anyone else who. who's in my situation uh and you know.

sees themselves going down like a path. just spending a bunch of money and not. realizing it you know hope you find this. video helpful. um also shout out Beau and Sylvia for uh. finding Caleb and showing them to me. well when Sylvia let's go. for John obviously He piled up an insane. amount of stupid debt but unlike most. with his income situation being able to. get rid of the Tesla and living at home. I think he's gonna be the quickest out.

of anyone that's been on the show to get. to a 10 out of 10 from where he is today. when it comes to his hammer Financial. score at this point when it comes to. spending solid middle of the road 5 out. of 10. he was certainly spending money. he shouldn't have that should be going. towards the debt and was a little over. his budget of 150 dollars that he said. he was following clearly wasn't him but. 5 out of 10 pretty middle of the road. debt not good not the worst we've seen. the private student loans come on the. Tesla's Age come on 2 out of 10. retirement very happy where he is for. his age 5 out of 10 emergency fund it's.

fantastic he saved up twenty four. thousand dollars this is a 10 out of 10. I would have to take points away from. that but I'm not going to but I would. because it has to go to the student. loans but again he saved it up and. that's where it is today so I'm very. happy 10 out of 10 real estate that'll. be like a six seven out of ten maybe a. 10 out of 10 eventually but right now. it's a zero out of ten but that'll get. there soon Hammer Financial score four. and a half out of ten I have all the. resources in the description below that. I use or would use if I was in specific.

situations I've partnered with them. specifically for helping you. I don't partner with any company unless. it actually provides benefits so feel. free to check those out don't forget to. follow my Instagram and Twitter thanks. thanks to Sofi for sponsoring this. episode see if rates are competitive and. if you can save money on your student. loans by going to sofi.com forward slash. Caleb.