Alright, Michael’s question is up next. It says, “My wife, who’s 25, and I, who’s 28, are nurses and going to graduate school. Our employer will be paying tuition. However, my wife, and maybe myself, can’t work for the last year of classes. Is it okay to pause investing while saving so–” and saving so we do not go into debt, or while saving, I think he means to say, “pause investing while saving?” Okay, so walk me through it again. So, 25 and 28, they’re both nurses but they’re in graduate school. Yeah, and so, that last year, it looks like with the course responsibilities, it’s going to be hard to, like, work for her, for sure, and for him to be hard to generate income. So, is it okay to not be saving, to not be investing? To not be investing. So, they’re still going to save, and I think that’s a really, um, interesting thing that I kind of messed up there that Rebie corrected on me.
Here’s what I think really matters at all stages of life: are you living below your means? Like, are you, if you’re making X dollars, is the amount that you’re spending, the amount that’s going out the door, some number less than X dollars? That’s the important part of wealth creation, one of the three ingredients that we call discipline. If you’ve got that down, I would argue that you’re doing pretty good. Now, if it is not uncommon through stages or seasons of life for things to get a little bit leaner, or maybe there’s a requirement that we have to build up cash for some reason, or maybe we’re just not quite as frothy in the income. I would say in this situation specifically, if you absolutely cannot save, if there or if you cannot invest and there’s no opportunity for employer match, there’s no free money out there, and you’re still working on building that emergency reserve, I’m going to say, “Okay, you got to do what you got to do.” But I would encourage you to really, like, look at it hard: are you certain, are you certain I can’t do $20 a month to a Roth, $50 a month to a Roth, maybe $100 is a C? Are you sure that there’s no way that you can be investing? Because at 25 and 28, even just a small amount of money, it may not be as much as you were wanting to save, it may not be 25% of your gross income, but if you can just save a little bit even through your leanest times, you’re going to build up some muscle memory that when you do graduate, when you do get to the other side of your education, when you do start making money, you will have built that muscle memory that allows you to go into full-on wealth-building mode. My notes that I wrote and I love what you just did because I’m going to mend mine a little bit. I wrote, “Yes, it’s okay in this temporary season as long as you have a healthy level of fear,” meaning that you know you’re doing something less than ideal, meaning that you’re in this season of life where you’re investing for your future by making sure your shovel of your career and your income potential is maximized and increased.
So I love what you just said though. You said, “How about you still keep something going? I don’t care if it’s $20 a month or so because what that’s going to do is a whisper in your ear every month, ‘Hey, you’re not doing everything you’re supposed to, but you’re at least doing something.’ How about a nudge towards, ‘Are you at the point now where we can take this back up to full speed ahead?’ And so I love that, yes, with fear is my, it’s okay that you have to pull back, but put a little reminder there, something that’s going to be a teaser. So $20 a month, $50 a month, whatever you feel like you can do that doesn’t jeopardize your financial household, do it. The second thing is you have to ask yourself, and I already kind of know the answer, but I’m just going to give you the context so you can put yourself through this entire exercise: Will there be a benefit and a positive result from this sacrifice or this moment in time? Well, obviously, if you are making a sacrifice, you and your spouse, y’all are both in nursing school getting the graduate work, so you will have a bigger earning potential down the road. That’s a solid yes. But there is a second part of this question because I see people all the time and I see–I’m going to pick on your co-workers, the doctors, because they have the exact same problem. They go through medical school, then they go through their residency, and they’re getting paid nothing during the residency. And then they get the floodgates of income open up after they kind of get out there. And what is the first thing they do? A lot of times, you would think the ideal thing is, ‘Go, man, what a blessing. I have all this money coming up. Now I have to think, what was the opportunity cost or what was left behind while I was focusing on my education instead of investments? How do I go rectify that and bring it forward?’ That is what should be thought of. But a lot of times, what is, ‘Man, I’ve been in school. It’s time to reward myself, and let’s go. I’ve earned this. Let’s go get that BMW. Let’s go get the luxury vehicle. Let’s go get the nicer apartment or house.’ Don’t fall into that trap. I want you to think about in terms of, how do I catch back up? I turn this positive into a true positive versus just increasing my lifestyle drift to the point that you’ve now not only hurt your future self, you’ve actually increased what your expenses are necessary to even cover the basics. So don’t fall into that trap. Will there be a positive benefit and positive result? That only happens if you actually take that higher income and turn it into higher savings and investments in the future. Make sure you stay on the positive side of this. For more information, check out our free resources.
