Dave Ramsey

Well, stop your 401k for a little while and just build your bridge.

What split would you do?

I'd do 100% if you did that.

But here's the thing.

That scenario is not going to happen because you would have to have something pretty severe happen to cause you to have not had the house paid off and then start putting the house money aside.

Because if you start putting your whole house payment away, you start putting, what, $40,000 a year away, you're going to have $400,000 in about 20 minutes.

It goes really, really fast.

Yeah, just an S&P 500.

You want to put it in something that's called a low, like an S&P 500 index because it's a low turnover ratio.

If the mutual fund is not in a retirement account and they sell the stocks inside of it, it creates taxes every year.

But if it's in a low turnover mutual fund, meaning they don't sell the tax, sell the stocks inside of it very often, like hardly at all, like a 5% turnover ratio or less, which is what an S&P 500 index fund would be, they're not going to turn those stocks over.

They just sit on them.

And so that will grow without taxes until you sell it.

And so it grows, it grows at capital gains rate and not already income rate when you do sell it, if you keep it over a year and it grows without taxes.

Because see, if you buy a stock, if you buy a mutual fund or anything and it's not, you don't, you buy a stock in Home Depot and it's $55.

I made that up.

I don't even know what Home Depot is, but okay.

It's $55 and it goes to $155.

You don't pay taxes on the $100 in growth until you sell it.

And the same goes true of a mutual fund where they're not selling the stocks.