Brought to you by CHM, a biblically-based alternative to health insurance. Learn more at chministries.org slash budget. I just got a question. My husband is concerned that we paused our investments for too long.
He's nearing the end of being able to, you know, wanting to retire, and we paused investing in, like, the beginning of December to jump on the baby steps. We've, since 2023, paid off about $42,000. All we have left is our house, and our emergency fund put together the three to six months. How long is too long to pause investing?
Three or four years, and you haven't gone over that. You got three or four years? Yeah, you've only done it for a few months. Correct.
Did you say you paid off all of your consumer debt already? Yeah, 2023 is when we took out the first stupid loan. When did you pause the investing? December.
Like three months ago? Yeah, I really wanted to. We were, like, paying on it, but then as soon as we paused the investing, we were able to start really chonking stuff away. And he invested probably about $1,500 a paycheck between the 457 and the Roth.
Yeah, good. So you've got some money in there, right? How old are you guys? 53 and 55.
Oh, you're fine. How much money is in your nest egg? About $420,000 total in the 457 and the Roth, and then about another $170,000 in the fire and police pension fund. Not counting the pension fund, is the other stuff invested in good mutual funds?
It is. Okay. Yep, very diversified. Again, let me help you with this.
Okay, let's walk through some math for a second. Oh, my God, I'm so honored to talk to you. Thank you. That's okay.
If you've got a pencil handy, you may want to write this down, or you can go back and watch it later, okay? So here's a rule of thumb. If an investment is earning 10%, the lump sum will double every seven years. So your mutual funds are earning in excess of that.
So your $420,000, if you're 53, when you're 60, will be $840,000. If you don't add anything to it. Okay, if you stop investing and never started again, okay? When you're 67, the $820,000 will be $1.7 million.
When you're 74, it'll be $3.4 million. This is if you never add anything to it and never take anything out of it. Okay. That's wild.
I'm saying those numbers because that gives your husband peace. He's okay. But on top of all that, we're going to have even more because we're going to restart investing in about September, aren't we? After we get our emergency fund.
Exactly. The way we've been chonking away, we've been chonking about $5,000 at the bill. We can have everything probably by July, I believe, or August. July, August, September, anywhere in there.
And then you're going to start putting good money into your investing again. And you're going to retire at 65 years old with close to $10 million. And do you say when we start investing again, I know that you always preach 15%. Until your house is paid off.
Until your house is paid off. Okay. Your house isn't paid off, right? No, no, I wish.
What's left? On a mortgage, how much do you owe on it? About $340,000. Okay, yeah, you need to clear that up.
Because when you get to 65, you want a paid-for house and a pile of money in your retirement. And that sets you up to be multi-millionaires and to retire with dignity and do anything you want. You've worked really hard and you've done a really good job. Thank you.
Yeah, very good. And here's the cool thing. You get that mortgage paid off. You don't need as much in retirement.
You just got rid of your biggest fixed expense. Yeah, no doubt. Yes, absolutely. The likelihood, here's what's going to happen in your alternate reality if you continue on the path that you're on.
If you start putting 15% away until you pay off your house, and you pay off your house in about six, seven years, which is what's going to happen here. Okay, so you're going to be in your early 60s and you're going to have several million dollars and a paid-for house that's worth a lot of money, too. Okay? And so you probably will never even touch the nest egg.
You probably won't even use all of the growth off of the nest egg because you're used to living fairly frugal, and even if you went, quote-unquote, hog-wild by your standards, you're still not even going to spend all the money that your money is making. That's how wonderful this is going to be. Because see, here's the deal. If you're 65 and you've got three- If you're 65, what do you all make a year?
Our taxes last year were about $196,000. Okay, so $200 a year. Okay, so if you're 65 and you have $3.5 million, it will generate more than $350,000 a year in income without touching the nest egg. Okay.
And if you live off $200,000, it's still growing by more than you're putting in now. You guys are going to have to really struggle to screw this up. You've done such a good job. It's good to know.
Okay, so tell husband to take a chill pill. And if he's got anxiety, let that anxiety turn into action and get this emergency fund funded so fast because he wants to get back to investing. Yeah. That's the second part of this.
Nothing wrong with using that as a driver, but sometimes it helps if you just look at the numbers and say, okay, we're talking about $840,000. We're talking about $1.7 million. You know, we're talking about $3.4 out there 21, 28 years out. Okay.
And so that just goes, oh, I'm going to be okay. Oh, this is all going to work. And you can kind of breathe again because if you run the math, sometimes it gives you peace or sometimes it lights you up. But in their case, it gives them peace.
You already have hundreds of thousands in that nest egg. And so compound growth finally has something to work with here if you just let it ride for the next 10 years of your career. You're going to be in good shape. Yeah.
And if you add to it, it's going to go zing, zing, zing, zing, zing, zing, zing. It's going to go crazy. It'll be amazing. Well done.
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