Think you have to be stupid to put yourself in a situation like this: I would be pissed if any of my course members were in a situation like what I'm about to describe and you're going to learn a lot of tricks and lessons in this one if you watch to the end, especially some tax tricks that you could take advantage of to make sure you maximize your ability to do certain things in finance to become a millionaire and not have certain numbers show up where you don't want them to show up. So watch the whole video for tips and tricks to learn all my tips and tricks. Join the courses on building your wealth linked down below and use that coupon code I saw a uh there was a I think A with his name Caleb Caleb aged something? uh hammer, whatever. Anyway, someone on YouTube uh made this video and he was sort of responding to an email hey should I keep paying the minimum payment on my car and keep paying down my federal student loans or stop student loan payments and triple my car payment. Uh, to pay off the car before the interest starts back up again on on the student loan. The car payment is 540 dollars and it's got eighteen thousand dollars left and the student loan is eleven hundred dollars and has seventy nine thousand dollars left on it. Oh my Gosh. So the I think the first thing that I want to say I'm going to put this up on screen here so you can see it first thing I want to say is it is remarkable how people get themselves into these sorts of payments. How how how do you have a 540 dollar car payment is eighteen thousand dollars left. It's a lot of money and I understand interest rates have gone up substantially. But one of the worst things in my opinion for people building their wealth is people trapping themselves in monthly payments. The reason I say that is very simple I Come from a real estate background, You should always be thinking to yourself, every single dollar that you spend of monthly debt takes away two dollars and 34 cents of income for the purpose of buying a home. So think about it. In order for you to make a 540 car payment, you actually need to earn an additional 1263 dollars per month on an annual basis. That means you have to make an extra 15 grand just to be back to qualifying for the same amount you could have qualified for before. If if you add up 540 plus the eleven hundred dollars here for the Uh for the student loan, this individual just to have the same purchasing power for Real Estate as they would have had they had not had these loans would have to make an additional forty six thousand dollars. Let me put that another way. Let's say this: somebody goes to school. They get a job and they make a hundred grand and somebody else goes to school. They get a job, They make a hundred grand Okay, the person who went to the Community College and got grants and doesn't have student debt and and got a cheap car for you know, five to ten thousand bucks used that they could pay off or have a very low payment on that person at a hundred grand could qualify for with a hundred thousand dollars worth of purchasing power, right? Which is pretty good because a hundred thousand dollars of purchasing power uh is going to get us at Uh. Maybe a front end ratio of about 35 percent would let us have a monthly payment of close to three thousand dollars for a home. Okay, well. three thousand dollars a month for a home that you want to buy? Not necessarily terrible, right? The person who has eleven hundred dollars in student loans and a five hundred forty dollar car payment would actually only qualify for Uh based on about 64 four thousand dollars of income. So they would only qualify for about an eighteen hundred and fifty dollar payment. Eighteen fifty out of three thousand is about forty percent less home. That is insane. That's absolutely insane. So consider that for a moment if you were gonna buy a forty thousand dollar home because you had no debts and you could qualify for a a sorry four hundred thousand dollar home if you could buy a four hundred thousand dollar home, you had no debts. If you had an eleven hundred dollar student loan and a five hundred forty dollar car payment, you'd be able to qualify for about forty percent less. or only about two hundred and forty thousand dollars. That's that's like the difference between buying a home and not buying a home, right? It is such an insane difference. So when I see numbers like this and people are just getting started with their Finance I Just want to shake every human being who has not gotten into these sort of loans yet and tell them, Do Not take on debt Like this. It is so stupid because you are taking a gun and you're shooting yourself in both feet. To be able to buy real estate, you basically make it impossible to become a millionaire. I Think the easiest way for anyone to become a millionaire is buying real estate. and if you don't buy your own home because you can't qualify, then you're stuck. Instead of making payments on things that are actually increasing your net worth, you're making payments on stuff that really aren't helping you Because with the student loans, you could have gotten probably the same degree for a lot less the car payment you don't need that stupid dumb car. Cars are stupid. I Really, really dislike people spending money on cars. Now that rant out of the way. What do you do in this situation? Apparently the student loan has interest rates of about seven percent, but the interest isn't due yet. The cars got payments of uh or an interest rate of just 2.9 percent. Not great, but also a problem. Uh uh. Well, I mean it is great. I Should say the interest rate is great. don't get me wrong, but the 540 is not great. It's a lot of money. Uh, but the 2.9 is is nice. That sort of mitigates some of that payment. So should I keep making the minimum payment of my car and pay down. Keep paying down my student loans. Or will this, uh, or stop the student loan payments uh and and triple off my car payment before the interest starts back up on my student loans. So in in my opinion, once you get into this stupid Hole uh where now you're making choices between what debts to pay off and not the very first thing you should try to do is make more money now I Know that sounds easy uh to say because well, it is pretty easy to say but increase that Top Line and get something paid off ASAP Personally I would actually probably go for uh if you can go for forbearance on those student loans. uh, or at least the interest payments are still on pause. I'd be paying off that car payment as soon as possible I Know people like Kevin it's 2.9 You could make more money in that investing. Yeah, listen, if you're struggling between an eighteen thousand dollar payment on a car and and your student loans, you don't got lots of money anyway to invest. So don't talk to me about investing in the stock market. You're not even close to considering the stock market. Vti should be like 10 years down the road for you. Like go pay off the stupid debt first, then buy real estate. Buy real estate. Pay this crap off as soon as possible, Pay one of them off, take that extra money, throw it down on the other, take as much money as you can, and pay these suckers off as fast as possible both of them, and then get into buying real estate. But if I could just send out a warning like a bad signal to the world, please don't take all these stupid loans. I Believe that people watch my channel because they want to build wealth because eventually they want to become a millionaire. Or maybe you're already a millionaire. In which case, I'm I'm honored. You're watching. Whether you're not even millionaire, you are a millionaire. I'm honored you're here watching. But geez, why? Why are people in the mindset that in America when when you turn 18, you have to sync yourself up to your eyeballs in student loan debt or you have to sink yourself into car debt it It blows my mind when I was 18 and I applied I did I applied for a student loan to see if I could get one I look at the terms and I actually qualified myself because I had already built my credit score up because I got a car loan out and I paid off my car loan because guess what? wanted to buy real estate and I made sure to buy a car that I knew I could pay off I took advantage of some of the introductory financing and then I paid that sucker off within a year. Then I bought real estate with money that I made. but I didn't take out the student loans because even though I could qualify alone because at that time I'm like am I gonna pay seven percent on student loans, Hell no. I'll go buy real estate and I don't want it to affect my ability to qualify. That's what I did when I was 18 and I supported myself, worked at Jamba Juice at Red Robin then became a real real estate agent. Fortunately, being a real estate agent pays a lot more money than working at Jamba Juice and I started right at 18. Because my look, life is a lot easier if you can increase the top line of your income. So if your income's under 50K a year right now, you got to be thinking to yourself, how can I get a skill to add more and create more value So I could actually increase my top line? That makes it a lot easier to pay off this. but but don't get into That kind of stuff. It's it's like ah, it's so it just drives me nuts. Uh uh. so it doesn't make sense to me for people to get into sort of debt. Uh, and it also doesn't make so much sense for people to discourage themselves from buying real estate. Everyone watching this should be buying real estate I Hear the excuses all the time People that big CAD Housing is expensive now. Then buy something smaller, then then buy a two in one or or one bedroom condo or a studio. Go smaller. You don't need to buy your dream home. you're buying your first rental property, but you're gonna live there first for a year so you can Bank hack it and put three and a half to five percent down and potentially even get down payment assistance uh, granted to you from your local Community Development councils because that's what they do they hand money out to get people into Home Ownership so it just I I I don't know I it like the traditional Financial advice out there I like somebody I don't know who maybe was the same person. Somebody's like oh, your car payment should not be more than eight percent of your gross take home pay and I'm like who made this stupid ass rule that is um because listen, if you are making thirty thousand dollars and and let's say that is, that's your gross take-home pay. Okay, that means you're taking home 2500 bucks, you should not be looking at. uh, what is that? Eight percent a 200 a month car payment? I Know that sounds relatively low today because we're basing that off thirty thousand dollars. but 200 bucks a month if you're making bringing home 30k, that's a lot of a monthly payment you're not gonna get into. Home Ownership Now let's say you, you're taking home a little bit more. Let's say you're taking home nine thousand dollars a month. Why the hell do you need a 720 car payment? We should be focused on building your wealth. These percentages don't make sense I Think the correct car payment is until you make more than a hundred thousand dollars. Your car payment should be zero. Pay it off like he's cheap used car and pay the sucker off. Then once you start getting maybe to 100 to 200. okay, maybe have a car payment, but have it in a side hustle. make your car payment through like an S corporation. So that way it's not affecting your debt to income. You could personally guarantee it, but you don't want it to show up on your credit report because now you can qualify for a home and still have the monthly payment. It doesn't affect you. Boom Tax hacks. That's why people come I Think to my channel is to help you learn this kind of stuff and check out the programs on building your wealth. Link down below because today a coupon code expires it is. It's actually our last coupon code February 3rd I Forgot to mention that at the beginning of the video anyway sorry I got angry when I saw this because of like the person put themselves in a stupid situation. Now they're trying to make stupid choices and they're getting advice or that normalizes the idea that it's okay to have a car payment. I know a lot of people have car payments and I get it. I First when I was 18 at a car payment too. but I made it my job to pay that sucker off. so I could buy as much really real estate as possible with my income while focusing on increasing my income because that's how I became a millionaire and that is how I also became a multi-millionaire and a bit way before social media. Uh, and that is how every normal person can do it as well in my opinion. I really believe that? Uh, there's no there's no get rich quick with real estate. So I like the old saying and don't focus on getting rich quick Get Rich for sure. Uh, Anyway, this is just my thesis on real estate. so I had I had to get that out of the way because it just bothered me so much.